Rank Everyone Against Everyone, No Threes Allowed

"business is structured for stability, not performance. Once you structure for performance, it becomes immediately clear that a way must be found to discover which employees per- form best. Sure, most companies go through a rote, ubiquitous employee evaluation, where on a_ one-to-five continuum everyone turns out to be a three. Great, but how do you know which threes are the best threes? You don’t. At CA, employees are ranked: she is number one in this group; he is number two; he is number three, and on down. At CA, em- ployees are ranked against each other. There can be no other meaning for best. Charles: “And always be bluntly, brutally"

"vated. In most U.S. companies, the motivation is threefold: sta- tus, perks, and cash—usually in that order. But if this works, it probably only manages to avert an even worse situation, in which, as under communism, no one is motivated at all. In a company where the best have as much chance to rocket ahead as the next-best, what advantage can there possibly be in doing any more than your job passingly well, kowtowing to your boss, and watching your ass? Only by ranking personnel can the best be assured of moving ahead."

"ments about other people. Charles: ““I rank them, I tell them. Yeah, and if you screw up, I'll put you in the penalty box for a while. I’ll tell you you screwed up and that’s why you're there. Now, learn something while you’re there. And if you don’t like it, leave—because CA doesn’t need you and you don’t need CA. You’re talented, go somewhere else where you love it. You don’t think we love you, but I’m going to tell you exactly where you stand. I don’t think there’s anything wrong with that. I tell people to treat their people the same way. But here’s where even we get wishy-washy, back and forth. Someone says, ‘This person is the worst person I ever had.’ Then he says, “He is probably the best employee I ever had.’ Come on, you said he’s bad—he’s bad. But now sud- denly he’s the best? Come on, these cancel each other out. This is a meaningless piece of bull, this report. “Why’d you bother putting anything down there in the first place? Oh yeah, you've got to check off because you have to fill out the form, but that’s not the purpose of that form. The form wasn’t meant to be filled out so that everybody’s file has this form signed by a manager. That’s not the purpose of it. The pur- pose was for you to face the issue of telling your person where he stands in your organization.’ This is a long story at CA. We"