What Is Stack Ranking? (With Alternatives and Benefits)

By Indeed Editorial Team

Published June 10, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Managers develop a set of metrics when they want to evaluate employees' performance. You can use different methods to perform this evaluation, such as stack ranking, to help ensure growth and development for a company. Understanding the importance of this concept can help you find areas where to make improvements. In this article, we define this process, provide alternatives to it, explore its benefits, and review some frequently asked questions about the topic.

What is stack ranking?

Stack ranking is a process of evaluating and measuring employees in a company and grouping them into categories based on their abilities and expertise. Managers may classify them as top-, middle-, and bottom-level performers. Most companies create improvement plans for employees in the bottom category. Managers also refer to this process as forced ranking or distribution. They can classify employees using percentile ranking and distribute their performance along a bell curve.

This ranking system may promote an unfriendly environment in an office, especially for employees with low self-esteem. There are alternatives that can create healthy competition in an office to improve productivity and prevent this environment from developing. This ranking aims at encouraging employees to work towards reaching the top level and enhancing their efficiency and productivity.

Related: What Is a Job Evaluation? Definition, Methods, and Process

What are the alternatives to stack ranking?

There are 10 main alternatives that managers can use to evaluate employees, including:

Instigate open communication

The ability of team leaders and their members to communicate effectively and express pressing concerns can help to create an atmosphere that promotes efficiency. Encouraging communication in a company is essential because it allows employees to share potential problems or challenges to their managers so that they can quickly resolve the matter. This can promote a positive work environment, as employees usually feel that their managers value their opinions when they address matters quickly. A positive work environment can help improve employee satisfaction and increase a company's overall productivity.

Related: Communication in Organizations (With Benefits and Types)

Develop a peer review structure

Managers can introduce a peer review system where employees can give feedback on each other's performance. Employees are likely to understand their colleagues' duties and the factors that can influence their productivity, so they can recognize strengths and weaknesses. The reviews can guide managers on improvements or further training for their employees. For example, if an employee notices that a team member lacks marketing skills, the employee can suggest training for that person. This training can improve the company's overall performance.

Related: What Is a Performance Review? (Definition and Examples)

Consider employee values

When significant stakeholders in a company pay attention to employees' values, they know what to encourage and how to evaluate their performance. Managers can motivate employees to improve their productivity. For example, team leaders may learn that team members prefer projects with flexible schedules. In that case, they can allow the team to create a comfortable deadline for themselves before they agree on a deadline with clients. Employees are usually more dedicated to their jobs when their duties match their values.

Introduce informal check-ins

Companies that want to experience growth in productivity can conduct regular employee assessments. Most companies conduct these assessments every six to 12 months. Another way companies can monitor the activities of employees and offer them support is by introducing informal check-ins. Major stakeholders can send periodic e-mails, conduct frequent meetings, or have quick interactions with employees to see how they're doing. Employees are more likely to feel that the company cares about their well-being when regularly checked on. Through check-ins, managers can quickly discover potential problems and resolve them before they become an issue.

Related: 11 Opportunities for Development to Improve Your Professionalism

Provide opportunities for career development

When managers introduce opportunities for career development, employees who utilize these opportunities can improve their professional skills and qualifications. With this initiative, employees can advance their careers and learn new skills, which can also help the company grow. Stakeholders keep employees who have developed their careers for longer periods and spend fewer resources to recruit new employees. Managers can assign experts in a department to teach bottom-level team members professional skills to help them improve.

Assign objectives to different teams

Managers can divide a company into different departments or units to perform specific tasks. Usually, these units comprise professionals who specialize in similar fields. For example, software engineers and developers can be in the technical department, while marketing experts may work in the marketing department. Working together in the same field, they can collaborate to find unique solutions to problems and develop innovative ideas to create quality products.

Establish a rewards system

As a manager, you can establish a system to reward employees for their hard work and dedication to their jobs. The reward can be monetary or non-monetary. The monetary reward refers to cash payments given to employees. Recognition is an example of a non-monetary award. When team leaders recognize dedicated employees, they encourage them to continue their hard work and motivate other employees to match their efforts.

Create smaller goals

When team leaders set smaller goals or divide large projects into smaller parts, they help team members complete their tasks quickly and more efficiently. Employees can easily understand the project plan and the steps to achieve it when managers divide it into more manageable tasks. For example, a project manager can first assign a research or public opinion task for a customer outreach project.

Ask for reviews from customers

Asking customers for reviews on the service employees provide also is an effective alternative. This helps managers discover the skills that employees can improve to help them provide better service to customers. After collecting several customer reviews, they can introduce training for employees to develop their professional and soft skills.

Reviews from managers

Executive stakeholders can introduce an effective review system when they allow managers of different departments to review the performances of their team members. These managers are in good positions to provide fair and accurate assessments. Stakeholders can then understand how each department works and discover areas for development. Managers can review their team members first before reviewing other departments. Stakeholders can compare the reviews to make necessary decisions for a company.

What are the benefits of stack ranking?

There are many reasons managers try this evaluation process. Some benefits include:

Increased employee motivation

Managers use this process to reward employees who regularly perform well. Rewarding team members can motivate them to continue their hard work. It also inspires other team members to improve their performance to get the reward or recognition next time.

Enhances efficient recruitment decisions

With this process, managers can evaluate employees to discover their skills and expertise. They can keep good performers and provide them with opportunities to improve. It also helps managers to discover low-level performers. If they're unhappy with their performances after training, they can assign them to another department where they may have the opportunity to perform better.

Encourages a strong company culture

This process can help encourage a culture of increased productivity in a company. When managers categorize employees based on their performance and award those who perform well, it helps them nurture a culture of success in a company. This can also encourage low and average-performing employees to strive to improve.

Stack ranking FAQ

Here's a list of some frequently asked questions and answers about this evaluation process:

Can managers of large companies use this process?

Some criticize this process because it works well in large companies with a well-structured workforce. It might be disadvantageous for large companies with less hierarchical structures. Managers of large companies may use alternative methods to help ensure productivity.

Can managers use a hybrid approach?

Managers can apply this process totally or partially to evaluate employee performance. As a manager, you can use the process with alternative measures to improve productivity. Employees may appreciate other less contentious approaches.

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