Chapter 9
Performance Ranking 101


While it is expected in most companies to “pay for performance”, the issue becomes what does one use as an equitable measurement standard? I first encountered the scheme of staff ranking at General Dynamics. In those days, we successfully merged the rankings of a two thousand-person Engineering group. I am particularly comfortable with both its equity and effectiveness. The key is that each person is assessed with respect to what is expected of someone of that specialty in his∕her labor grade.

As a slight aside, ranking first became critical in academia during the Vietnam era. Until then, the median grade point average (GPA) for undergraduates at most colleges was in the 2.7–2.8 range with the top ten percent having a GPA above, say 3.2. Vietnam-era grades became substantially inflated, probably to keep students out of the draft, such that post-Vietnam the median GPAs were in the 3.2 range with the top 10% above a 4.0. So, how did you decide whom to accept into graduate programs when you had candidates that were both pre-and post-Vietnam? You ignored GPAs and looked at their class rank. Rank does not change with grade inflation.

The analogy to grades in personnel matters is ratings: exceptional, outstanding, typical, whatever your particular Human Resources department has called them. These have a tendency to inflate as well. It is worthwhile to note that we now have at least two generations of staff that have all been told their entire life that they were above average. You can see that is going to create a problem, even with engineers who intellectually know that half of any group must be below average by definition. I once had an Engineering manager tell me that something was wrong with any system that required you to tell half your staff that they were below average.

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