Laptop Note-Taking leads to “Shallower Cognitive Processing” than Manual Notes

Pam Mueller

Taking notes by hand was associated with better factual and conceptual understanding and recall than capturing content on a laptop computer, reported Princeton’s Pam Mueller and Daniel Oppenheimer of UCLA.

Mueller and Oppenheimer differentiated two types of note-taking:

Kenneth Kiewra

Generative Note-taking, characterized by summarizing and paraphrasing.
This approach enables deeper information processing and greater information encoding, according to University of Nebraska’s Kenneth Kiewra.

G Michael Pressley

Nongenerative Note-taking, identified by verbatim copying from dictated content.
This strategy is associated with “shallow cognitive processing,” explained Penn State University’s Peggy Van Meter, Linda Yokoi of University of Maryland, and G Michael Pressley, then of Michigan State University.

Virpi Slotte

More “superficial” information processing is linked to less accurate text comprehension, found University of Helsinki’s Virpi Slotte and Kirsti Lonka.
Shallow processing also is associated with less integrative and conceptual understanding, reported Clemson University’s Brent Igo, Roger Bruning of University of Nebraska, and Victoria University’s Matthew McCrudden.

Kirsti Lonka

Participants viewed 15-minute TED Talks or recorded lectures.
Meanwhile, volunteers recorded notes on a laptop computer or in handwriting.
Volunteers then completed two 5-minute distracter tasks and a reading span task to assess working memory.

Roger Bruning

Thirty minutes after the lecture, participants answered questions about the content:

Factual-recall, such as “Approximately how many years ago did the Indus civilization exist?”
Conceptual-application, like “How do Japan and Sweden differ in their approaches to equality within their societies?”

Volunteers who took notes on a laptop were more likely to record verbatim notes and showed poorer performance on factual-recall questions and conceptual-application questions.

Even when participants were told to “take notes in your own words and don’t just write down word-for-word what the speaker is saying,” laptop users recorded more verbatim notes than manual note-takers, and their comprehension performance did not improve.

Matthew McCrudden

Daniel Oppenheimer

Findings in a similar study confirmed that people who paraphrase content demonstrate greater content comprehension, enabled by slower processing with manual note-taking.

Taking notes on a laptop computer enables users to transcribe information at higher speeds, and drawbacks include:

Shallower information processing,
Decreased conceptual understanding,
Reduced factual recall,
Distraction in multi-tasking on email or social media.

-*How do you maintain increase comprehension and retention when taking notes using a laptop computer?

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©Kathryn Welds

Anxiety Linked to Risk of Behaving Unethically

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Sreedhari Desai

Anxious people were more likely to act with self-interested unethical behavior in studies by University of North Carolina’s Sreedhari Desai and Maryam Kouchaki of Northwestern.

Maryam Kou

Anxiety was also associated with increased threat perception and decreased concern about personal unethical actions in simulated subordinate–supervisor pairs.

Desai noted that “individuals who feel anxious and threatened can take on self-defensive behaviors and focus narrowly on their own basic needs and self-interest.
This can cause them to be less mindful of principles that guide ethical and moral reasoning – and make them rationalize their own actions as acceptable.”

Charles Carver

Engaging in unethical behaviors may offer more options and greater control over outcomes, found University of Miami’s Charles Carver and Michael Scheier of Carnegie Mellon.
Unethical behavior was also associated with feelings of greater autonomy and influence, particularly in ambiguous situations, according to Ohio State’s Roy Lewicki.

Michael Scheier

People who violate ethical norms can experience a ‘cheater’s high‘ instead of guilt, found University of Washington’s Nicole E. Ruedy and Celia Moore of London Business School.

Roy Lewicki

Cheaters in Ruedy’s research reported emotional uplift and self-satisfaction instead of guilt, and Paul Ekman of University of California, San Francisco referred to this exuberance among some cheaters as “duping delight.”

Nicole Ruedy

In Ruedy’s studies, nearly 180 people completed a four-minute anagram task to earn $1 for every correctly unscrambled word.
Participants then rated current feelings from positive to negative, both before and after the task.

Celia Moore

Volunteers’ actual answers on the task were compared from imprints between their answer sheets to determine which participants reported inaccurate results.

More than 40% of these volunteers wrote in additional answers to increase their earnings, and reported significantly positive feelings after cheating on the task.

Even when Ruedy’s team told volunteers that researchers knew participants may be providing inaccurate reports in an insoluble anagram task, more than half the participants reported implausibly high scores.

Cheaters had higher levels of positive affect even when confronted with the team’s awareness of their potential deceit.
They also showed higher levels of self-satisfaction and feeling clever, capable, accomplished, satisfied, and superior.

Earning more money didn’t add to the “cheater’s high,” suggesting a top threshold for positive feelings associated with cheating.

Maurice Schweitzer

These findings suggest that organizational leaders can increase employee quality-of-life and diminish unethical workplace behaviors by clarifying roles, which reduces anxiety.

Leaders also can reduce employees’ anxiety by:

Paul Ekman:

Setting realistic expectations for employee workload,
Adopting Results Only Work Environment (ROWE) and flex time,
Emphasizing the value of experimentation, flexibility, and innovation.

-*How have you seen high-anxiety workplaces affect employees’ ethical judgment?

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©Kathryn Welds

Ethnic Diversity Reduces “Groupthink,” Economic “Bubbles”

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Most people are unlikely to trust recommendations and evaluations from people of different ethnic groups.

Sheen Levine

However, this bias may reduce the “herd mentality” that characterized price “bubbles” in U.S. housing and global financial markets, reported Columbia’s Sheen S. Levine, Evan P. Apfelbaum of MIT, Goethe University’s Mark Bernard, Texas A&M’s Valerie L. Bartelt, Edward J. Zajac of Northwestern, and University of Warwick’s David Stark.
They concluded that, “Diversity facilitates friction that enhances deliberation and upends conformity.”

Economic “bubbles” occur when the majority of traders set inaccurate prices, probably influenced by a type of “groupthink.”
This cognitive error results in a mismatch between market prices and true asset values.

Irving Janis

Groupthink can occur when three conditions interact, according to Yale’s Irving Janis:

Group Cohesiveness
- “Deindividuation” occurs when group belonging becomes more important than individual dissenting views,
Group Structure
- Homogeneity of group’s social backgrounds and ideology,
- Group insulation from feedback,
- Lack of impartial leadership,
- Lack of norms to conduct systematic analysis and clearly structured decision procedures,
Context
- Stressful external threats,
- Recent failures,
- Decision-making difficulties,
- Moral dilemmas.
  Scott E. Page

A wider range of viewpoints leads to less groupthink and more balanced decisions in a mathematical model developed by University of Michigan’s Scott E. Page and Lu Hong of Loyola University.

Diverse groups ran into fewer “dead ends” when they developed solutions than did groups comprised of individuals who tended to think similarly.

David A. Thomas

Likewise, Georgetown’s David A Thomas and Robin J. Ely of Harvard confirmed that identity-diverse groups can outperform homogeneous groups
summarized in a formula:

Collective Accuracy = Average Accuracy + Diversity.

To test the impact of group diversity on market “bubbles,” Levine’s group constructed experimental markets in Singapore and Texas, USA, in which participants traded stocks to earn money.

Evan Apfelbaum

More than 175 volunteers with backgrounds in business or finance were randomly-assigned to groups of six ethnically-homogeneous or ethnically- diverse participants.

Traders knew the ethnic composition of their groups, but they couldn’t communicate with each other.
In addition, their “trades” of dividend-paying stock were anonymous.

Homogeneous groups set inflated selling prices, yet traders in those groups bought the stock, resulting in increasing stock prices.

Mark Bernard

In contrast, traders in diverse groups refused inflated selling prices, so the stock price fell to approximately the price in an “ideal” market with “rational” traders.

When traders and other decision-makers come from similar ethnic, social, and attitudinal backgrounds, they tend to place undue confidence in others’ opinions, and tend not to subject them to rigorous analysis.

Valerie Bartelt

As a result, people in homogeneous may be more likely to accept prices and deals that deviate from actual underlying values.
Levine’s group concluded that “homogeneity…imbues people with false confidence in the judgment of coethnics, discouraging them from scrutinizing behavior.”

How do you mitigate “groupthink” in organizational decision-making?

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©Kathryn Welds

“Evolved” Leaders in an Era of Self-Interested Leadership

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Jim Collins

Organizations that are “built to last” are guided by “Level 5 Executives,” argued Jim Collins in Good to Great: Why Some Companies Make the Leap… and Others Don’t.

This style of leadership requires both personal humility and personal will, a combination not favored in the current US national leadership.

Collins proposed a developmental leadership hierarchy including:

Level 1: Highly Capable Individual, who applies knowledge, skills, abilities, and commitment to achieve team goal,
Level 2: Contributing Team Member, who contributes to team goal achievement through effective collaboration,
Level 3: Capable Manager, who sets plans and organizes others to achieve goals,
Level 4: Effective Executive, who inspires others to act toward the shared vision,
Level 5: Level 5 Executive combines personal will to achieve the organizational improvement goal, tempered with personal humility.

Modesto Maidique

Drawing on developmental psychology theories by Jean Piaget as well as Harvard’s Lawrence Kohlberg, and Robert Kegan, Florida International University’s former President, Modesto A. Maidique proposed a six-level Purpose-Driven Model of Leadership,

Jean Piaget

Leadership is service to others, organizations, and ideals, and follows a related developmental path:

Level One: Sociopath, who serves no one, exhibits low empathy, and destroys value and undermines others.
Well-known examples are Muammar Gaddafi, Adolf Hitler, and Saddam Hussein.

Lawrence Kohlberg

Level Two: Opportunist, who serves himself or herself, often at others’ expense by focusing on “What’s in it for me?”
Examples include Bernie Madoff and Jeffrey Skilling.
Level Three: Chameleon, who “flip-flop” and cater to as many people as possible.
Examples include Senator John Kerry, former Florida governor Charlie Crist, and former Massachusetts governor Mitt Romney.

Robert Kegan

- Level Four: Achiever, who often achieves business goals through energetic focus.
  Peter Drucker
  
  Peter Drucker characterized this leader as “monomaniac with a mission,” driving toward a goal without fully considering the broader mission.
  Examples include former H-P CEO Mark Hurd.
- Level Five: Builder, who seeks to build an institution, not just to achieve a goal.
  Examples include IBM’s Tom Watson Jr., GM’s Alfred P. Sloan, and Harpo’s Oprah Winfrey.
  They have a clear vision, energize others, manage for the long term, and not swayed by short-term profit or stock market valuations.
Level Six: Transcendent, who focus on broader social benefit beyond their personal affiliations.

Examples include Nelson Mandela, Martin Luther King Jr., and the Dalai Lama.

These frameworks provide a structure to evaluate the words and actions of current political and business leaders, and suggest potential leadership vulnerabilities.

-*What level of leader do you observe in the highest levels of your work organization?
-*What practices are you implementing to develop your next level of leadership skill

©Kathryn Welds

Managing Workplace Interruptions

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Edward Sykes

Most office workers spend an average of two hours a day doing unplanned tasks, according to Sheridan Institute’s Edward Sykes.
These work interruptions are associated with:

Disrupted progress toward tasks completion,
Reduced task focus,
Longer task completion time,
Increased errors, according to Rutgers’ Quintus Jett and Jennifer George of Rice University.

Quintus Jett

Unplanned tasks decrease productivity and are characterized by:

Intrusions – Unplanned interactions initiated by others: Synchronous communication including instant message, phone call, or a coworkers visiting to talk,

Distractions – Unplanned focus change from a task to environmental conditions like other conversations,

Breaks – Unscheduled task stoppage to rest, visit the restroom, have a meal,

Discrepancy Detection – Unplanned task stoppage to correct errors or redirect work effort toward a revised objective.

Jennifer George

Unplanned workplace interruptions are increasingly prevalent due to rising incidence of:

Open and collaborative workspaces,
Technological interruptions,
Meetings.

Sheldon Cohen

Open space floor plans increase unplanned interruptions, perceived stress, and “cognitive fatigue,” due to greater noise levels and reduced privacy for employees.
These factors also reduce employees’ job satisfaction, found Carnegie Mellon’s Sheldon Cohen and E. M. De Croon and team of University of Amsterdam.

Julie Renneker

Synchronous communications are more disruptive than asynchronous communications, which allow response at a convenient time and mitigate the negative impact of task-shifting on cognitive load and stress level, noted University of Texas’s Julie Rennecker and Lindsey Godwin, now of Champlain College.

Greg Oldham

Strategies to mitigate the impact of work disruptions include time management and boundary setting, according to Tulane’s Greg Oldham, Carol Kulik of University of South Australia and Florida State University’s Lee Stepina.
They suggested that employees:

Carol Kulik

-“Batch” communication to check email and returning phone calls at specified intervals,

-Block technology pop-ups, alerts, sounds to avoid startling interruptions,

James Tyler

-Organize tasks around energy peaks, with tasks requiring the most effort and concentration earlier in the workday and after a break, also advocated by Purdue’s James Tyler and Kathleen Burns of University of Wisconsin,

Kathleen Burns

-Take active breaks, such as walking outside to breathe outdoor air,

John Aiello

-Schedule interruption-free intervals, to increase perceived control over interruptions and reduce stress, also cited by Duke’s Andrew Carton and John Aiello of Rutgers,

-Create “work-arounds” for open space floor plans by:
.Installing higher cubicle dividers,
.Providing noise-cancelling headphones,
.Offering white noise machines to reduce ambient notice,
.Designating reservable private work rooms for audio privacy,

-Reduce meeting frequency to focus on issues that require group discussion, consensus, commitment.

A counterpoint argument is that task interruptions provide benefits, proposed by Jett and George.
The argued that unplanned and planned interruptions :

Prevent widespread rework when employees alert colleagues to a work discrepancy or error,
Increase productivity during repetitive or well-learned tasks that may lead to boredom, errors, or lost task focus.

-*How do you reduce the negative impact of workplace interruptions?

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©Kathryn Welds

Women Board Members + Strong Shareholder Protections = Higher Financial Performance

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Kris Byron

The relationship between women on corporate Boards of Directors and company positive financial results is mixed, according to Syracuse University’s Kris Byron and Corinne Post of Lehigh University.

Corinne Post

They conducted a meta-analysis of 140 existing studies and found that women on corporate boards was related to positive financial outcomes in countries with stronger shareholder protections.

Richard Gentry

Companies with women on Boards and subject to rigorous shareholder protections reported higher accounting returns or firm profitability, noted University of Mississippi’s Richard Gentry and Wei Shen of Arizona State University.

Wei Shen

Women on Boards of Directors provide “diversity of thought and experience” and tolerate less financial risk.
As a result, they made stronger efforts to monitor the firms and to ensure strategy execution, leading to superior financial results,according to Byron and Post.

Kathleen Eisenhardt

The team drew on Agency Theory, proposed by Stanford’s Kathleen Eisenhardt, suggesting that Boards of Directors are “information systems” used by key stakeholders to verify organizational behavior.

Amy Hillman

Directors’ individual cognitive frames, derived from their diverse values and experiences, influence these systems, according to Arizona State’s Amy Hillman and Thomas Dalziel of University of Cincinnati.

However, diverse cognitive frames yield more favorable organizational outcomes only when teams “engage in mutual and collective interaction [and] share information, resources, and decisions.”

This means that women Board members affect group decision-making and financial performance when other Board members are willing to consider their diverse perspectives and experiences.

Thomas Dalziel

Strong shareholder protections provide “an information-processing stimulus that motivates (Boards) to leverage the decision-making resources (i.e., knowledge, experience and values) that women bring,” asserted Byron and Post.
They concluded that strong financial outcomes occur in companies with women on their Boards of Directors in countries with strong shareholder protections.

Byron and Post’s analysis illustrates that diverse perspectives provide benefit only when they are solicited and considered in a context of regulatory oversight.

-*When have you observed diverse perspectives associated with increased profitability and performance?

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©Kathryn Welds

Do Women Advance in Careers More Slowly than Men?

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Herminia Ibarra

Men received 15% more promotions than women, according to a Catalyst Benchmarking Survey.

Similar numbers of “high potential” women and men were selected for lateral moves to other parts of the business.
However, men but not women, received promotions after the career-developing lateral moves.

Nancy M. Carter

Women’s developmental lateral moves were substitutes for actual career advancement, suggested INSEAD’s Hermina Ibarra with Nancy M. Carter and Christine Silva of Catalyst.
Similarly, women receive social accounts – or explanations – as substitutes for salary increases.

Virginia Valian

Hunter College’s Virginia Valian suggested that implicit bias may explain men’s performance is consistently overrated while women’s accomplishments are underrated by coworkers, bosses and themselves, .
Resulting discrepancies in opportunity accrue over time to create large gaps in advancement, she asserted.

In addition, women are typically evaluated in relation to a “masculine” standard of leadership, reported Catalyst’s earlier research.
Three consequences of this rating standard undermine leadership and advancement opportunities:

Extreme Perceptions, in which women are attributed behavioral excesses, such as “toughness” or “niceness,”
High Competence Threshold, when women leaders are held to higher standards and receive lower and fewer rewards than men,
Competent but Disliked, when women may be perceived either as “competent” or “likeable” but not both.

Phyllis Tharenou

Family structure can accelerate or slow career progress in unexpected ways.
Both “post traditional” mothers who have employed spouses, and “traditional” fathers whose wives are engaged in childcare only, more rapidly advanced in private sector careers than women and men with other family configurations, reported Phyllis Tharenou of Flinders University.
Somewhat surprisingly, non-parent women and men, and unmarried fathers advanced more slowly in their careers.

Employment disruption, such as maternity leave or layoff, did not impair career advancement for women and men, but the industry sector was associated with differing rates of career advancement.

Alice Eagly

In a separate analysis, Tharenou noted that the strongest predictors of advancing in management were managerial aspirations and masculinity.
Women were more likely to advance when they received career encouragement and when organizational hierarchies included both women and men.

To explain these career advancement rate discrepancies, University of Massachusetts’ Alice H. Eagly and Linda L. Carli of Wellesley suggested that women encounter a career labyrinth rather than a glass ceiling.

Linda Carli

Differences in career advancement rates may be narrowed by sponsorship rather than mentorship, argued Catalyst and Center for Talent Innovation.
Male advocates can support female sponsees by focusing attention on the challenges women face at work and can advocate for organizational processes and structures that normalize equivalent competence in women and men.

What type of “career encouragement” enable women to advance in careers at a rate similar to men?

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©Kathryn Welds

Motherhood Pay Penalty, Fatherhood Bonus

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Michelle Budig

Having children increases men’s salaries by more than 6% and decreases women’s earnings by more than 4%, according to University of Massachusetts’ Michelle Budig.

Low-income women were most affected by the “motherhood pay penalty,” whereas low-income men were least affected.
In the U.S., this trend has massive impact because more than 70% of mothers are employed, according to the U.S. Bureau of Labor Statistics, and more than 40% of these mothers are the primary wage earner, reported the Pew Research Center.

Marital status and parenting situation significantly affect average salaries: Married mothers in the U.S. earn 76 cents – 82 cents for every $1.00 earned by men.
In contrast, unmarried women with no children earn salaries more similar to men: 96 cents for every dollar a man earns, according to the U.S. Bureau of Labor Statistics’ 1979 – 2006 National Longitudinal Surveys of Youth.
Low-income women fared worse: They lost 6 percent in wages per child, significantly higher penalty than average-income women experience.

Melissa J. Hodges

Highly educated white and Latino men in professional jobs benefitted most from having children whereas less educated, unmarried African-American men working in manual labor jobs received less salary advantage, noted Boston University’s Melissa Hodges and Budig of UMASS.

Sara Harkness

In the U.S., the average gender pay gap has been decreasing, but the parenthood pay gap is increasing, reported University of Connecticut’s Sara Harkness and Jane Waldfogel of Columbia University.

Jane Waldfogel

Their findings confirmed the impact of marital status on parents’ salaries: Single mothers earned just over 83 cents compared to a single father’s US salary dollar.
Married mothers with at least one child under age 18 fared worse: They earned 76 cents for each dollar earned by a married father.

One source of this wage difference may be hiring discrimination against mothers, argued Stanford’s Shelley J. Correll and Stephen Benard of Indiana University, when they sent identical fictitious résumés to hundreds of employers.

Shelley Correll

Half the male and female “candidates” indicated membership in a parent-teacher association, whereas the remaining male and female credentials indicated no community involvement with a school.

Female résumés that included PTA membership were half as likely to be contacted for an interview, compared with female qualifications without this involvement.
In contrast, male résumés with this volunteer activity were contacted for interviews slightly more frequently than those that did not.

Stephen Benard

Correll and Benard also asked volunteers to act as “employers” and determine the salary for “job applicants.”
On average, participants offered mothers an average of $11,000 less than childless women and $13,000 less than fathers.

However, socioeconomic strata can buffer the motherhood penalty: Women in the top 10 percent of earners lost no income when they had children, and those in the top 5 percent received bonuses, similar to men.

Kate Krause

Women least able to afford salary decreases experience the largest pay penalty for motherhood.
This inequity can be minimized with measures suggested Deborah J. Anderson, then of University of Arizona with Melissa Binder and Kate Krause of University of New Mexico:

-Flexible work arrangements (ROWE), although some research indicates that this type of flexibility can result in lower salaries,

-Widely-available, affordable, high-quality childcare.

These recommendations remain aspirational goals in many organizations, and until these structures are available to most employees, this pay differential may persist.

- To what extent have you seen men’s careers benefit from becoming a parent?

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Comparative Rankings May Reduce Gender Bias in Career Advancement

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Iris Bohnet

An “evaluation nudge” is a decision framing aid that may reduce biased judgments in hiring, promotion, and job assignments, according to Harvard’s Iris Bohnet, Alexandra van Geen, and Max H. Bazerman.

Alexandra van Geen

They recommended that organizations evaluate multiple employees simultaneously rather than each person independently.
This approach differs from “Stack Ranking” (“Rank and Yank”), advocated by GE’s Jack Welch and critiqued by many.

Multiple simultaneous evaluations are frequently used for hiring decisions, but less frequently when considering employee candidates for developmental job assignments and promotions.

Max Bazerman

Bazerman and Sally B. White, then of Northwestern with George F. Loewenstein of Carnegie Mellon demonstrated preference reversals between joint and separate evaluation.

George F. Loewenstein

Lack of comparison information in separate evaluation typically leads people to rely on internal referents as decision norms. These internal criteria may be biased preferences, according to Princeton’s Nobel laureate Daniel Kahneman and Dale T. Miller of Stanford.

Dale T. Miller

Lack of comparative referents also can lead evaluators to rely on easily calibrated attributes, found University of Chicago’s Christopher K. Hsee.
Both of these mental shortcuts can systematically exclude members of under-represented groups.

Christopher K. Hsee

Another problem is the “want/should” battle of emotions and preferences, outlined by Bazerman and Ann E. Tenbrunsel of Notre Dame, with Duke’s Kimberly A. Wade-Benzoni in their provocatively titled article, “Negotiating with Yourself and Losing.”

Ann E. Tenbrunsel

They argue that the “want self” tends to dominate when deciding on a single option because there’s less information and less need to justify the decision.
In contrast, the more analytic “should self” is activated by the need to explain decision rationales.

Kimberly Wade-Benzoni

Bohnet’s team asked more than 175 volunteer “employees” to perform a math task or a verbal task, then 554 “employer” evaluators (44% male, 56% female) received information on “employees’” past performance, gender, and the average past performance for all “employees.”

“Employers” were paid based on their “employees’’” performance in future tasks, similar to managerial incentives in many organizations.
Consequently, “employers” were rewarded for selecting people they considered effective performers.
Based on information about “employee” performance, evaluators decided to:

“Hire” the “employees,” or
Recommend the “employees” to perform the task in future, or
Return “employees” to the pool for random assignment to an employer.

Keith E. Stanovich

The Harvard team found that “employers” who evaluated “employees” in relation to each other’s performance were more likely to select employees based on past performance, rather than relying on irrelevant criteria like gender.

Richard F. West

In contrast, more than 50% of “employers” evaluated each candidate separately without reference to other “employees,” selected under-performing people for advancement.
Only 8% of employers selected under-performers when comparing “employees” to each other, and multiple raters for multiple candidates also tended to select the higher performing “employees.”

Team Bohnet suggested that people have two distinct and situation-specific modes of thinking, “System 1” and “System 2,” illustrated by University of Toronto’s Keith E. Stanovich and Richard F. West of James Mason University.

These cognitive patterns can lead evaluators to select incorrect decision norms, leading to biased outcomes.

Decision tools like the “evaluative nudge” decision-framing can reduce bias in hiring and promotion decisions, leading to a more equitable workplace opportunity across demographic groups.

-*What other evaluation procedures can reduce unconscious bias in performance appraisal and career advancement selection processes?

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©Kathryn Welds

Do Unintended Consequences of Forced-Ranking of Employee Performance Outweigh their Short-Term Benefits?

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Kurt Eichenwald

Forced ranking (“stack ranking” or “rank and yank”) of employee performance was one contribution to MSFT’s loss of momentum, according to Kurt Eichenwald’s article on How Microsoft lost its Mojo.

His extensive interviews with current and past Microsoft employees point to forced rankings leading to:

Competitive sabotage and undermining of peers
Focus on short-term results that coincide with twice-yearly rankings
Undermined intrinsic motivation in face of “impossible”-seeming odds
Reduced innovation
Lack of collaboration
Focus on “visibility” to managers’ peers instead of improving performance
Misguided decisions
Mistrust of management and colleagues
Unwanted attrition
Stress for all.Forced ranking systems, used by a substantial number of Fortune 500 companies, is the eighth most-frequently used appraisal technique in the U.S.

It requires management teams to evaluate employees’ performance against other employees, rather against pre-determined standards.
The goal is to create a meritocracy in which superior performance is recognized and under-performance is “managed.”

Steve Scullen

Steve Scullen evaluated “forced distribution rating system” (FDRS) in a simulation study of 100 companies of 100 employees each over a three year period.
He reported in Personnel Journal that forced ranking and hypothetically firing of the bottom 5% or 10%, resulted in a 16% productivity improvement.
Productivity gains increase when more low performers were removed.

He acknowledged the negative consequences of forced rankings for employee morale, teamwork, collaboration, recruitment, shareholder perception, and brand image.
Nevertheless, Scullen found that the potential problems were counterbalanced by benefits.

Scullen determined that most benefit from forced ranking comes in the first few years of implementation: “…each time a company improves its workforce by replacing an employee with a new hire, it becomes more difficult to do so again… the better the workforce is, the more difficult it must be to hire applicants who are superior to the current employees who would be fired.”

Dick Grote’s Forced Ranking: Making Performance Management Work, argues that most companies achieve benefits of forced ranking systems in “a few years” and are advised to replace
forced ranking with other talent management initiatives after the organization has implemented a refined selection process to ensure hiring top talent.

Peter Capelli

Peter Cappelli of The Wharton School and author of Talent on Demand: Managing Talent in an Age of Uncertainty, quantified the benefit of removing low performers: This group contributes about five times less to organizations than high performers, according to his research.

In contrast, Alys Woodward of IDC challenged these arguments in her article on misunderstanding and misuse of statistics in stack ranking.

Alys Woodward

She concluded that “stack ranking assumes the statistics dictate reality, rather than reflect reality.”

Likewise, W. Edwards Deming opposed ranking because he thought that it destroys pride in workmanship, and opined that “the only way to improve a product or service is for management to improve the system that creates that product or service. Rewarding or punishing individuals trapped in the system is pointless and counterproductive.”

W. Edwards Deming

Robert Mathis and John Jackson pointed out potential legal challenges to stack-ranking.
They note that the practice may be difficult to defend in a court test because it does not comply with the following legal criteria:

Criteria based on job analysis
Absence of disparate impact and evidence of validity
Formal evaluation criteria that limit managerial discretion
Rating linked to job duties and responsibilities
Documentation of appraisal activities
Prevents action from controlling employee’s career
Counseling to help poor performers improve

Though most employees do not seek out employers who use stack ranking, organizations may realize a short-term benefit in streamlining the workforce.
However, the practice may have unintended “soft” consequences, legal challenges, and time-limited value.

-*What positive and negative impacts have you observed related to forced-ranking appraisal systems?

Twitter: @kathrynwelds
Facebook Notes:

Kathryn Welds, PhD | Curated Research + Commentary

Consulting Organizational Psychologist | Change Consultant | Leadership+Career Master Coach | Coach Supervisor+Mentor Coach |

Laptop Note-Taking leads to “Shallower Cognitive Processing” than Manual Notes

Anxiety Linked to Risk of Behaving Unethically

Ethnic Diversity Reduces “Groupthink,” Economic “Bubbles”

“Evolved” Leaders in an Era of Self-Interested Leadership

Managing Workplace Interruptions

Women Board Members + Strong Shareholder Protections = Higher Financial Performance

Motherhood Pay Penalty, Fatherhood Bonus

Comparative Rankings May Reduce Gender Bias in Career Advancement

Do Unintended Consequences of Forced-Ranking of Employee Performance Outweigh their Short-Term Benefits?

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