Yahoo CEO Marisssa Mayer has again hit on HR controversy with a new policy that forces managers to rank their employees on a bell curve, with those at the end heading for the chop. The story was reported by website AllThingsD.com, who said that Yahoo employees were increasingly venting their frustration at the policy on internal message boards.
According to the Institute of Corporate Productivity (i4cp), quoted in BusinessWeek, the number of companies using these types of forced ranking systems is down significantly on previous years. Just over 5% of high-performing companies used a forced ranking system in 2011, down from close to 20% two years’ earlier.
i4cp's Cliff Stevenson told BusinessWeek that when employees worry about being ranked at the bottom of the pile, they take fewer risks, which stifles innovation. This should be a particular worry for Yahoo who have steadily been losing market share. The company went through several periods of layoffs, starting in 2008.
The latest HR controversy from the search giant echoes Mayer’s first gaffe back in February, when she essentially banned flexible working across Yahoo. Jackie Rees, Yahoo’s HR head, sent the following memo to staff:
"To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices.
"Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.
"For the rest of us who occasionally have to stay home for the cable guy, please use your best judgment in the spirit of collaboration. Being a Yahoo isn’t just about your day-to-day job, it is about the interactions and experiences that are only possible in our offices."
The decision was criticised against widely-held views on the benefits of flexible working and an end to the dominance of 9-to-5 working, as well as the disadvantages the new policy would give to carers and working parents.
With the latest research suggesting employees respond better to positive messages and very gentle feedback, it’s unsurprising Yahoo’s latest move to ramp up competition in the workplace will not be well-received.