Category: Archive

Here, from Appendix A to the book, is a CEO’s memo to executives who would serve as assessors in the company’s forced ranking process. This memo, like the one in the first part of this series, was changed only to conceal the name of the company, and was sent by the company’s CEO to all company employees at the vice president level and above who would be involved in the forced ranking assessment meetings.

The objective was to communicate the importance he placed on the procedure for building the company’s future.

---

To: All Vice Presidents

From: [Name of CEO]

Date: February 19, 2002

Subject: Acme Leadership Assessment Program

We have just announced a new forced ranking procedure that will help us better identify Acme talent. In this Leadership Assessment Program, Acme’s senior managers will use a forced ranking process to identify:

• the top 20 percent of all Acme managers so that their career development can be accelerated;

  
  

• the vital 70 percent — the great majority whose strong performance is essential to keep Acme competitive;

  
  

• the bottom 10 percent whose talents and skills will be best used in other jobs or in other organizations

As a vice president of Acme Services Company, you will be participating in one or more of the ranking sessions. A schedule of all sessions is attached.

The criteria to be used for this ranking procedure will be based on three of the most critical Acme Values (Execute with excellence, Passion for results, and Succeed with people) as well as the individual’s ability to make tough decisions. In the forced ranking discussions, consideration will also be given to such important aspects as the individual’s past performance, promotability, and intellectual strength.

Before you will be able to participate in any of the ranking sessions, you must complete the three-hour training program that is scheduled for [dates and times]. If you are unable to attend one of these two sessions, you will not be able to participate in any of the ranking sessions.

The training programs will be conducted by [name of consultant], a nationally recognized consultant who specializes in performance management. He will also serve as the facilitator for each of the ranking sessions.

It is critical to our success that we identify, reward and retain our top talent. We must also make sure that none of our jobs is blocked by an individual who doesn’t have the capability of making an outstanding contribution. The forced ranking process in admittedly difficult. However, the training you will receive combined with the fairness, intelligence and integrity you will bring to the ranking sessions, will make this process a significant success.

Appendices A and B excerpted from Forced Ranking: Making Performance Management Work, by Dick Grote. Excerpt copyright 2005 by Harvard Business School Press. Reprinted by permission of Harvard Business School Press from Forced Ranking: Making Performance Management Work, copyright 2005 by Dick Grote. All rights reserved.

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Here, from Appendix A to the book, is a CEO’s memo to participants in the ranking process. The memo was sent to all employees who were to be assessed in the company’s initial forced ranking process. The objective was to build understanding and acceptance of the new procedure.

Grote notes that this memo and other tools he shares in the book’s appendices “resulted from my work in developing and implementing a major forced ranking system with several large organizations. Only the names of the companies and other identifying details have been changed to preserve their anonymity.”

To: All Acme Employees in Salary Groups 14 and above

From: [name of CEO]

Date: February 19, 2002

Subject: Acme Leadership Assessment Program

Next month, we will initiate a new forced ranking procedure that is designed to help us better identify Acme talent. In this Leadership Assessment Program, Acme’s senior managers will use a forced ranking process to identify:

• the top 20 percent of all Acme managers so that their career development can be accelerated;

  
  

• the vital 70 percent — the great majority whose strong performance is essential to keep Acme competitive;

  
  

• the bottom 10 percent whose talents and skills will be best used in other jobs or in other organizations

This program will benefit everyone who is involved. For those 90 percent of Acme managers who will end up being ranked in the top two groups, the ranking process will confirm the importance of their contributions. For those ranked in the top 20 percent, this program will highlight the talent they bring to Acme and accelerate their development. And for the 10 percent who are ranked in the bottom category, this process will allow the person to move to a job that better matches his or her skills, whether inside or outside the company.

The criteria to be used for this ranking procedure will be based on three of the most critical Acme Values (Execute with excellence, Passion for results, and Succeed with people) as well as the individual’s ability to make tough decisions. In the forced ranking discussions, consideration will also be given to such important aspects as the individual’s past performance, promotability, and intellectual strength.

The ranking decisions will be made by the vice presidents of the various Acme departments who are most familiar with the individuals under review. Each person who participates as a ranker will undergo several hours of training to assure accuracy, fairness, and consistency. In addition, the most experienced HR managers who serve the various functions will sit in on the ranking sessions to provide additional input, as will members of the corporate HR staff. Finally, [name of Vice President – Human Resources] and I will be active participants in every session.

We are taking every step to assure the success and the fairness of this process. We have reviewed all of our plans with internal and external legal counsel and have engaged an experienced consultant to help us design the procedure and facilitate the meetings. We are requiring all meeting participants to attend a training program before they participate in a ranking session. We are using the key criteria from our Values in Action as the basis for our decisions. We will discuss the results with every person involved as soon as the ranking discussions are completed. And I personally will play an active role in every session.

Because the senior leadership of any organization has the greatest responsibility for achieving organizational results, we will be using the process this year with all individuals in salary groups 14 through banded, including my direct reports. In future years we may extend the program further, but we will start with those whose impact on our success is the greatest.

Appendices A and B excerpted from Forced Ranking: Making Performance Management Work, by Dick Grote. Excerpt copyright 2005 by Harvard Business School Press. Reprinted by permission of Harvard Business School Press from Forced Ranking: Making Performance Management Work, copyright 2005 by Dick Grote. All rights reserved.

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Scripts—What to Say to A, B, and C Players

    It’s easy to encourage managers to tell the truth in discussing performance. What’s tricky is telling them exactly how to tell the truth — giving them the actual words to say. It’s particularly sticky in those difficult cases where they have to tell an excellent performer just why she didn’t quite make the A player category, or the B- player that he’s flirting with the bottom category, or the C player that her time with the company is over.

    This section contains five scripts I wrote for managers to use as models in announcing the results of the ranking panel’s decisions. These scripts have been used by managers in actual organizations and have been reviewed by employment lawyers to make sure that there are no hidden traps.

    While Acme Services Company, the real but disguised organization referred to in these scripts, used a forced ranking procedure that assigns individuals into three categories (top 20 percent, vital 70 percent, and bottom 10 percent), I discovered that I had to write scripts for five different scenarios:

Script #1 — A Player

Script #2 — High B Player

Script #3 — Solid B Player

Script #4 — Barely B Player

Script #5 — C Player

    While the scripts for the first four outcomes are probably appropriate for use by almost any organization, the script for the C Player announces that the decision has been made to ask people in this category to leave the organization and, as part of that decision, to provide them with a generous severance package and outplacement assistance. In this particular case, the company’s decision had been to allow any individual who received a C (Bottom 10 percent) ranking to challenge that ranking, reject the severance package, and be re-reviewed by the same set of rankers three months later. If the person had demonstrated in this period that he in fact was a solid B player or better (in effect, demonstrating that either the original assessment had been wrong or that in a fairly short period of time he had been able to leapfrog over the performance level of people rated toward the low end of the B category), that new ranking would stand until the next iteration of the process.

Acme Services Company

• Leadership Assessment Program
• Feedback Sessions
• Recommended Scripts

“A” Performer — Pat

    Come in, Pat, sit down. I’ve got some good news for you.

    As you know, we recently completed the Acme Leadership Assessment Program discussions. The outcome of those discussions is that you were evaluated as one of the top 20 per cent of Acme leaders. Congratulations.

    Before we talk further about what this will mean to you and your career here at Acme, are there any questions you’d like to ask me about the process?

    Answer questions.

    Let’s talk about what’s going to happen as a result of this decision and what some of your responsibilities are. To begin, your first responsibility is to maintain the confidentiality of the result. While the company is communicating openly about the fact that we are using a leadership assessment process and the way the program works, the actual evaluations of individuals are confidential. I expect you not to discuss your assessment with anyone who’s not directly involved with the process.

    The most important thing we need to talk about are your development plans. One of the reasons for inaugurating the Leadership Assessment Program is to accelerate the development of people like yourself, the ones whom we see as being the future leaders of the corporation. Let’s begin by going over are the impressions people shared about your development needs during the assessment discussion . . .

    Review any discussion of the individual’s development needs that took place during the ranking sessions. In particular, discuss which of the Acme criteria the individual was felt to be the strongest and which to be the weakest.

    As you think about your own strengths and weaknesses, Pat, do you feel that the group’s assessment was on target, or are there other areas that you feel your development efforts should concentrate on?

    Discuss individual’s personal perceptions about his/her development needs. Say either:

1. As a result of your assessment in the top 20 per cent group, one immediate action we have planned is [announce action — special project assignment, job change, new responsibility added to job, request to serve as a mentor to another high potential employee, assignment to a senior manager who will serve as a mentor, scheduling attendance at a special development program, etc.]
2. While we have not created any immediate development plans for you, I need you to think about what you feel you need to do to accelerate your own development. When you think about your development needs, Pat, I want you to think much bigger than just attending some kind of training program. I want you to give some consideration to such things as special project assignments, possible job changes, or new responsibilities that might be added to your job. You might consider serving as a mentor to another high potential employee, or working with a senior manager to acquire a broader view of the company, or anything else that might help you make a greater contribution to Acme. I’d like you to get back to me with your ideas for your development by [date].

    Pat, I want you to know that everyone who was involved in your assessment in the Acme Leadership Assessment Program sees you having a very bright future with the company.”

High “B” Performer — Chris

    Come in, Chris, sit down. I’ve got some good news for you.

    As you know, we recently completed the Acme Leadership Assessment Program discussions. The outcome of those discussions is that you were not only evaluated as one of the vital 70 per cent of Acme leaders, you were also ranked toward the top of this group. Congratulations.

    Before we talk further about what this will mean to you and your career here at Acme, are there any questions you’d like to ask me about the process?

    Answer questions. In particular, discuss why the individual was not ranked in the top 20 per cent category. If there is a specific deficiency that resulted in the individual’s placement in the B Player category, discuss that deficiency and any obvious steps the person should immediately take to overcome it. If the ranking resulted from an overall competitive placement, explain that.

    Let’s talk about what’s going to happen as a result of this assessment and what some of your responsibilities are. To begin, your first responsibility is to maintain the confidentiality of the result. While the company is communicating openly about the fact that we are using a leadership assessment process and the way the program works, the actual evaluations of individuals are confidential. I expect you not to discuss your assessment with anyone who’s not directly involved with the process.

    The most important thing we need to talk about are your development plans. One of the reasons for inaugurating the Leadership Assessment Program is to accelerate the development of people like yourself, the ones whom we see as being the future leaders of the corporation. Let’s begin by going over are the impressions people shared about your development needs during the assessment discussion . . .

    Review any discussion of the individual’s development needs that took place during the ranking sessions. In particular, discuss which of the Acme criteria the individual was felt to be the strongest and which to be the weakest.

    As you think about your own strengths and weaknesses, Chris, do you feel that the group’s assessment was on target, or are there other areas that you feel your development efforts should concentrate on?

    Discuss individual’s personal perceptions about his/her development needs. Say either:

1. As a result of your assessment in the top of the vital 70 per cent group of Acme leaders, one immediate action we have planned is [announce action — special project assignment, job change, new responsibility added to job, request to serve as a mentor to another high potential employee, assignment to a senior manager who will serve as a mentor, scheduling attendance at a special development program, etc.]
2. While we have not created any immediate development plans for you, I need you to think about what you feel you need to do to accelerate your own development. When you think about your development needs, Chris, I want you to think much bigger than just attending some kind of training program. I want you to give some consideration to such things as special project assignments, possible job changes, or new responsibilities that might be added to your job. You might consider serving as a mentor to another high potential employee, or finding ways to acquire a broader view of the company, or anything else that might help you make a greater contribution to Acme. I’d like you to get back to me with your ideas for your development by [date].

    Chris, I want you to know that everyone who was involved in your assessment in the Acme Leadership Assessment Program sees you having a very bright future with the company.”

Solid “B” Performer — Kerry

    Come in, Kerry, sit down. I’ve got some good news for you.

    As you know, we recently completed the Acme Leadership Assessment Program discussions. The outcome of those discussions is that you were evaluated as one of the vital 70 per cent of Acme leaders. Congratulations.

    Before we talk further about what this will mean to you and your career here at Acme, are there any questions you’d like to ask me about the process?

    Answer questions. In particular, discuss why the individual was ranked in the vital 70 per cent category. In particular, be sensitive to which of the four most common feelings the person is expressing (MAD, SAD, GLAD, or SCARED) and respond appropriately.

    If there is a specific deficiency that resulted in the individual’s placement in the B Player category, discuss that deficiency and any obvious steps the person should immediately take to overcome it. If the ranking resulted from an overall competitive placement, explain that.

    Let’s talk about what’s going to happen as a result of this assessment and what some of your responsibilities are. To begin, your first responsibility is to maintain the confidentiality of the result. While the company is communicating openly about the fact that we are using a leadership assessment process and the way the program works, the actual evaluations of individuals are confidential. I expect you not to discuss your assessment with anyone who’s not directly involved with the process.

    Let me explain what it means to be assessed as one of the vital 70 percent of Acme leaders. As I said at the start of the meeting, it’s good news. It means that your contributions to the company are recognized and appreciated. It means that we see you having a solid future here.

    The most important thing we need to talk about are your development plans. One of the reasons for inaugurating the Leadership Assessment Program is to accelerate the development of people like yourself, the ones whom we see as being the vital core of the corporation. Let’s begin by going over are the impressions people shared about your development needs during the assessment discussion . . .

    Review any discussion of the individual’s development needs that took place during the ranking sessions. In particular, discuss which of the Acme criteria the individual was felt to be the strongest and which to be the weakest.

    As you think about your own strengths and weaknesses, Kerry, do you feel that the group’s assessment was on target, or are there other areas that you feel your development efforts should concentrate on?

    Discuss individual’s personal perceptions about his/her development needs.

    While we will not be creating any specific development plans for you as a result of the Acme Leadership Assessment Program, I want you to think about what you feel you need to do to accelerate your own development. When you think about your development needs, Kerry, I want you to think much bigger than just attending some kind of training program. I want you to give some consideration to such things as special project assignments, new responsibilities that might be added to your job, or anything else that might help you make a greater contribution to Acme. I’d like you to get back to me with your ideas for your development by [date].

    Kerry, I want you to know that everyone who was involved in your assessment in the Acme Leadership Assessment Program recognizes your contributions and sees you having a very solid future with the company.”

Low “B” performer–Tracy

    Come in, Tracey, sit down.

    As you know, we recently completed the Acme Leadership Assessment Program discussions. The outcome of those discussions is that you were evaluated in the middle group, as one of the vital 70 per cent of Acme leaders. While that in itself is good news, Tracy, quite frankly you were assessed toward the lower end of the middle group.

    Before we talk further about what this will mean to you and your career here at Acme, are there any questions you’d like to ask me about the process?

    Answer questions. In particular, discuss why the individual was ranked in the lower end of the vital 70 per cent category. In particular, be sensitive to which of the four most common feelings the person is expressing (MAD, SAD, GLAD, or SCARED) and respond appropriately.

    If there is a specific deficiency that resulted in the individual’s placement in the lower end of the B Player category, discuss that deficiency and any obvious steps the person should immediately take to overcome it. If the ranking resulted from an overall competitive placement, explain that.

    Let’s talk about what’s going to happen as a result of this assessment and what some of your responsibilities are. To begin, your first responsibility is to maintain the confidentiality of the result. While the company is communicating openly about the fact that we are using a leadership assessment process and the way the program works, the actual evaluations of individuals are confidential. I expect you not to discuss your assessment with anyone who’s not directly involved with the process.

    Let me explain more specifically what your assessment means. It means that as we look at all Acme leaders, we see you as being among the great majority in terms of your talent and contribution and potential. It means your contributions to the company are recognized and appreciated. It means that we see you having the potential for a solid future here.

    But Tracy, you need to get to work immediately to develop that potential. If we didn’t think that you had the talent and capability to be a fully successful leader at Acme, you would have been ranked in the bottom 10 percent. You weren’t. But, quite frankly, it was a close call.

    The most important thing that you need to think about are your development plans. The Acme Leadership Assessment Program is going to be an ongoing process in the company. You will need to demonstrate significant improvement in all of the Acme leadership criteria. I believe that next time you have the capability of being assessed as solidly in the middle of the vital 70 percent of Acme leaders . . . maybe even more. But right now, it’s critical to your future that you demonstrate that that’s where you belong.

    While we will not be creating any specific development plans for you as a result of the Acme Leadership Assessment Program, I want you to think about what you feel you need to do to accelerate your own development. When you think about your development needs, Tracy, I don’t want you to think about attending some kind of training program. I want you to think about the ways in which you can better demonstrate the Acme leadership criteria and how you can make a greater contribution to the company. I’d like you to get back to me with your ideas for your development by [date].

    Tracy, I want you to know that I believe that you have the capability to be a solid Acme leader in the future. I need you to prove me right.

“C” Performer — Jan

    Come in, Jan, sit down. I’ve got some bad news for you.

    As you know, we recently completed the Acme Leadership Assessment Program discussions. The outcome of those discussions is that you were evaluated in the bottom 10 percent of Acme leaders.

    As you know from the communications about the program that you received before we began [and from your involvement as an assessor during the program], the purpose of the Acme Leadership Assessment Program is to identify the top 20 percent of all Acme leaders so that their development can be accelerated, the vital 70 percent, and the bottom 10 percent who will be asked to leave the company and find better opportunities for their careers in another company.

    You were assessed carefully and thoughtfully against the Acme leadership criteria, and you have been assessed in the bottom ten percent.

    Before we talk further about where we go from here, are there any questions you’d like to ask me about the process?

    Answer questions. If there was a specific deficiency involving one of the Acme leadership criteria that resulted in the individual’s being assessed in the lowest 10 percent, explain what that specific deficiency was. If the ranking resulted from an overall competitive placement, explain that. Don’t argue or defend the assessment decision, other than saying:

• The decision-making process was rigorous and fair.

  
  

• You personally agree with the accuracy of assessment.

    If the individual asks about the possibility of appealing the decision or being given a “second chance,” explain that you are prepared to talk about that separately. First, however, you want to review the plan of action that you believe will work out best for everyone.

    Let’s talk about what’s going to happen as a result of this assessment. To begin, both of us have a responsibility to maintain the confidentiality of your assessment. While the company has communicated openly about the fact that we are using a leadership assessment process and the way the program works, the actual evaluations of individuals are confidential. I expect you not to discuss your assessment with anyone who’s not directly involved with the process, and I will only be discussing your assessment with others on a formal and official basis.

    Let me explain more specifically what your assessment means. It means that we will be asking you to leave the Acme Services Company and find a career opportunity with another organization.

    We realize that this will be a difficult transition for you, and we want to do all that we can to make your departure as professional and dignified as we can.

    We have prepared a separation package that I want to review with you.

    Review the details of the separation package. Discuss each element of the package and explain how it benefits the individual. Answer any questions. Discuss your belief that the package that the company has put together is appropriate and generous, and that it is in the individual’s best interest to accept it.

    Review the requirement that the individual must sign a release in order to be eligible to receive the package.

    Discuss the timing for accepting the package and leaving the company.

    Jan, I believe that the assessment that was made is an accurate one and that your talents will be best used in another organization. I feel that the separation package that the company has put together for you is very fair and that it is in your best interest to accept it.

    You asked me if you have any recourse if you think that the assessment we have made is incorrect. Yes, you do have a recourse. If you sincerely believe that our assessment is inaccurate and you want to demonstrate that your performance against the four Acme leadership criteria is significantly better than that of the other Acme employees with whom you were compared, we will give you the opportunity to prove us wrong.

    You will be allowed to reject the package I have just offered you. You will be given a maximum of 90 days to demonstrate that you genuinely excel in your performance against the four Acme leadership criteria of executing with excellence, demonstrating a passion for results, succeeding with people, and making tough decisions. At the end of that 90 day period, the same people who made the original assessment will review you again against the same population of Acme leaders that you were compared against originally.

    If this new assessment reveals that our original assessment was wrong and that you are solidly in the ranks of the vital 70 percent of all Acme leaders, that new assessment will stand. If, however, the new assessment is the same as the assessment that we have just made, you will be asked to immediately leave the company. In addition, the separation package we have just discussed will not be the same.

Review the revised separation package.
    Jan, it is critically important that you understand what you will need to do if you choose to reject the separation package we are offering you. It is not a matter of getting better or improving your performance or solving a problem. You will need to demonstrate that you not only excel in the four Acme leadership criteria, but that your performance against these four criteria is significantly better than a large number of other Acme managers at your level.

    If the individual decides to accept the package and leave Acme, thank the person for his service to the company and express your sincere conviction that he is making the right decision. Advise the individual that by law he has ________ days to change his mind. Advise the individual of any other legal or Acme Services Company policies or procedures that affect his departure.

    If the individual says that he wants time to think things over, advise him of the time requirements for making a decision and any other policies or procedures.

    Jan, I know that this is a very difficult situation for you. I want you to know that I personally believe that you have made a solid contribution to Acme, and that you will have a great deal of success in wherever your career path takes you.

Appendices A and B excerpted from Forced Ranking: Making Performance Management Work, by Dick Grote. Excerpt copyright 2005 by Harvard Business School Press. Reprinted by permission of Harvard Business School Press from Forced Ranking: Making Performance Management Work, copyright 2005 by Dick Grote. All rights reserved.

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Here, from Appendix B to the book, is a set of frequently asked questions about the forced ranking system. This FAQ was originally developed by the author as part of the development and implementation of a forced ranking system for a large consumer goods company, here also called Acme Services Co.

The document has been revised both to eliminate any references to the original organization and to make the questions and answers appropriate for any company that is implementing forced ranking. The term that Acme has chosen to use for its forced ranking process is “Leadership Assessment Process.”

This set of frequently asked questions is intended to provide a workable template for an organization to use in developing both their own FAQ document for publication to the workforce. It will also be useful in considering the questions that are likely to arise in the course of developing and installing the system.

ACME SERVICES COMPANY

LEADERSHIP ASSESSMENT PROCESS

Frequently Asked Questions

What is the Acme Leadership Assessment Process?
    The Acme Leadership Assessment Process is a procedure in which each member of the senior leadership team of the Acme Services Company will be assessed against four criteria: EXECUTE WITH EXCELLENCE, PASSION FOR RESULTS, SUCCEED WITH PEOPLE, and MAKE TOUGH DECISIONS. Each individual being assessed will be assigned into one of three categories: the top 20 percent of all Acme leaders; the vital 70 percent; and the bottom 10 percent.

Why are we doing this?
    In our very competitive industry being good or being profitable isn’t good enough. We must strive to be a high performing, best in class organization. This starts with the leadership of the company. A disciplined, structured review process aggressively develops top leadership talent, and in some cases deselects others. A process such as this is necessary to ensure that the leadership stays sharp, is of the highest caliber, does not become satisfied with mediocrity and continues to move forward and grow the Company.

Is this fair to do?
    Yes. The leadership and employees of Acme have known for many years that “how” we get things done is as important as “what” is accomplished. It is entirely fair to hold the leadership responsible for a higher standard of performance not only in the delivery of operating results, but also in the demonstration of key leadership competencies. That’s what we are doing. The criteria to be used in the Leadership Assessment Process are a reflection of our Vision and Values. There is nothing new here other than holding the leaders accountable for operating to those values, judging which executives do it the best, and determining which do it the worst. Thousands of people both inside and outside of the Company rely on the leadership to lead successfully. It would be unfair to them not to hold our leaders accountable for the best leadership skills.

Is this something that will benefit Acme?
    There is no question about it, yes. While this is a difficult process, the net result is that the development of our leadership will get special emphasis. We need to know that the individuals who are directing the business have all the tools and experiences necessary to deliver on their leadership responsibilities.

    Another benefit is that the overall caliber of the leadership at Acme will rise. Some good performers of the past may not measure up to a raised bar of expectations, but they will be treated fairly and with dignity. But those individuals who are up to the challenge will in fact be given increased opportunities to lead and will reap the resulting rewards. Those who are not up to the challenge and competition will exit the organization. The ultimate result is that we will be a better-led, more successful enterprise.

Is this going to be done annually?
    We expect to do another iteration of the process in about 12 months. At that point we will evaluate the timing of the Leadership Assessment Process and determine what the on-going frequency should be.

How is the assessing being organized?
    A number of assessment sessions will be conducted between May 8th and May 10th. In the first one our CEO will evaluate his staff. After that meeting, the project consultant, an external industry expert in performance management, will facilitate a meeting with our CEO and his immediate staff as they assess all employees at Salary Grade Level 6 and above. On subsequent days, 4 additional facilitated assessment sessions will occur. They will be conducted by a panel of Vice Presidents serving as assessors. The 4 facilitated sessions are as follows:

• Sales and Marketing

• Manufacturing

• Engineering, Purchasing, and Finance

• Human Resources, Information Services, and Legal

Who is doing the assessing?
    The CEO and the Senior Vice President – Human Resources will be assessors for all assessment sessions. Senior Vice Presidents and divisional Vice Presidents will be assessors in the review sessions for their functions. Additionally, HR professionals who support the various divisions will be in attendance at sessions when their client groups are being assessed.

Are the assessors qualified to make these assessments?
    Yes. Our consultant, a recognized industry expert in processes such as this, has trained all individuals participating in the assessment meetings. Each assessor has completed a review of study material and has engaged in significant discussions about the process.

Isn’t this just a guise for a RIF?
    No. First of all this process looks at individuals, not at jobs. Secondly, individuals who leave the organization will be replaced, which will frequently result in advancement opportunities for people lower in the organization.

What will happen to me if I am assessed in the lowest 10 percent?
    These individuals will be told of their status, as will all assessed employees. Obviously, this is bad news, but these individuals will be told truthfully that they do not have a leadership future at Acme and will be able to immediately consider changes in their career plans. They will be told that a separation package will be made available, as well as outplacement services should they opt to accept the initial separation package.

    If any individual identified in the lowest 10 percent believes that the assessment is inaccurate, he or she will be given a period of time up to 90 days to demonstrate that their assessment was in fact inaccurate, after which their leadership capability will again be assessed against the four competencies. If, at the end of this period, they are still assessed as a lower 10 percent individual, they will be exited with a separation package only. Additional consideration offered earlier may not be available at this point.

What does this process mean to me and my development?
    For the great majority of Acme leaders — the 90 percent —it will mean that a greater emphasis will be placed on their development. For those individuals who are part of the top 20 percent it will mean very specific and rigorous development.

Will I be told where I came out in the process?
    Yes. Beginning on May 13th and no later than by the end of June, there will be individual discussions between assessors and the people that were assessed.

Do other companies do this?
    Yes. A large number of very well managed companies, including GE, PepsiCo, Microsoft, Sun Microsystems, Intel, and many others utilize management processes such as this.

Will the people who are exiting the organization now through the early retirement program be considered as part of the lower 10 percent?
    No. Individuals in Salary Grade Level 14 and above who indicated a decision to retire as part of the early retirement Program will not be part of the population being assessed, regardless of the timing of their retirement.

Some departments have routinely been aggressive in weeding out poor performers. Won’t those departments be disadvantaged by beginning this process now?
    No. Such departments have typically used Acme’s performance management system and other tools quite effectively, and this should continue. But the Leadership Assessment Process is not focused on individuals who are considered to be “performance problems”. Almost universally, the individuals who are being assessed are rated good or above.

    This process specifically measures Acme leaders against four key leadership criteria and forces the assessors to identify the best. In this process the lower 10 percent of the individuals are just that — relatively weaker leaders. They may be adequate in other organizations, but as we raise the standard for leadership at Acme, they do not meet that standard here.

What if my department has more than 10 percent lower rated individuals? What if we end up with less?
    First, the assessment is not done on a department basis. In each assessment session, a good-sized grouping of executives, as described earlier, is being discussed. That said, there will be 10 percent of individuals identified from each of the sessions. Assessors could identify more.

What if my department has more than 20 percent top performers? What if we end up with less?
    Again, the assessment process is not done on a department basis. That said, there will not be more than 20 percent top performers identified in any session, as we want to identify the best of the best. This permits a targeting of somewhat limited development time and resource to the best leaders

Will the lower 10 percent be let go on one particular date? If so, what if we don’t have a backup?
    An exit strategy for each person identified in the lower 10 percent will be established on an individual basis. In all instances the dignity and respect for the individual will be maintained. Not having a ready backup is not an adequate reason to maintain a weak leader in a leadership role.

What if I am recognized as a top 20 percent one-year and not the next? Will my development be affected?
    Yes.

Are managers going to be held accountable for ensuring that development plans for the top 20 percent are actually formulated and executed?
    Yes. Senior management will be directly monitoring the progress of top 20 percent individuals. Additionally, managers of top 20 percent individuals are also assessed in the Leadership Assessment Process. One of the four criteria on which they are judged is “Succeeding With People” which directly speaks to their efforts in the development of people.

Shouldn’t all employees have been put on notice that this would be done, so that they could concentrate on demonstrating the behaviors, which are all of a sudden so important?
    Acme expects every employee at every level to demonstrate excellence from the day he or she is hired. All employees were specifically informed of the our Mission, Vision and Values at the time that they were hired. These statements have been an on-going part of our business and a part of all of our performance management systems and activities.

    Employees have regularly been told that the way in which they meet their objectives is as important as what is achieved. All employees have been told that they are responsible for how they get work done. It is perfectly acceptable to hold leadership accountable to demonstrate leadership excellence at a higher level than the company would expect of anyone else. In fact one could argue that any leader who was not exhibiting the values and now is seeking a reprieve in order to exhibit them was withholding what they knew to be the highest level of effort and leadership, and should be removed from the organization.

Don’t you run the risk that some of the individuals who are being assessed will be assessed by people who don’t know them, particularly for some individuals from small departments that provide services across the company?
    Assessors will be asked to directly assess the people that they know the best. Usually, that equates to the people who report to them in their respective divisions, and those in related areas. In the assessment sessions, when one assessor is discussing an employee, the other assessors will be expected to ask probing questions, pressing for clear examples, and generally ensuring that the rigor of the process is applied consistently.

If an individual is simply not very well known (or possibly unknown to the panel of assessors), will this person automatically be placed in the bottom ten percent?
    An individual who is simply not known, even by their department Vice President, will default to the “vital 70 percent”. Under no circumstances would such an individual, as described in this question, be placed in the top or bottom grouping.

    However, it should be pointed out that it is highly unlikely that this could occur, what with the composition of the assessor groups, the preparation leading up to the assessment session, the oversight by HR, and the professional facilitation.

Is it fair to compare people at salary level 16 (from whom presumably greater leadership is expected) against people at salary level 14 (from whom presumably a somewhat lower level of leadership is expected)?
    This is a very good question. It is not so much a matter that “greater leadership” is expected from one job versus another, but rather the degree to which a person exhibits the leadership that his or her position calls for. For example, a person who holds a salary grade level 14 who absolutely nails the leadership expectations associated with their role will fare much better than a person at a salary grade level 16 who does not, even though the person at salary grade level 16 is in a position of greater responsibility. In this respect, it is fair and equitable to compare individuals based on observable behaviors irrespective of their salary grade level.

If we are going to do this every year, is it really fair to assess the people who replaced last year’s bottom ten percent? Won’t they be too new? Wouldn’t it be better to do this every other year?
    Generally speaking, a newly appointed individual will default to the “vital 70 percent”, to allow the individual time to exhibit their leadership. In our Leadership Assessment Program next year, the assessors may choose to leave a person in the middle grouping, or they may feel that adequate time has elapsed that permits them to make a valid assessment and place the individual in a different category. Generally, if an individual has been in a position less than 6 months, we will consider that time as too short to make an assessment.

What role will EEO considerations play in the assessment?
    The final composition in each session of the three groupings (top 20 percent, middle 70 percent, lower 10 percent) will be based exclusively on the leadership criteria used. There will be no quota based on age, sex, race, or any other criteria than leadership. The rigor of treating all individuals fairly, observing them through the same lens and measuring them against the same yardstick will be consciously and strictly observed.

Ford did this and had to stop because of employee backlash. Is that true?
    Ford attempted to use a review process somewhat similar to ours as part of its overall Performance Management process covering over 18,000 employees, which we are not doing. The Leadership Assessment Process is independent from our performance appraisal process. Acme is taking very careful and deliberate action to insure that fairness and rigorous review criteria are being adhered to.

Isn’t this illegal?
    No. There is nothing illegal about evaluating how well people perform against the company’s expectations that they display Acme’s four leadership competencies. In addition, the entire Leadership Assessment Process has been reviewed by both our internal and outside legal counsel.

The evaluation of people’s performance against Acme’s leadership competencies is just the subjective opinion of the assessors. This seems unfair.
    The Acme Leadership Process has been specifically designed to remove subjective opinion. Every one of the assessors has been specifically trained. Assessors will only discuss people whose performance they are directly familiar with. In addition, assessors who do not have direct, first-hand knowledge of the individual under review are instructed to make sure that other assessors provide examples of actual performance and not just unsupported opinion.

    Finally, it is far more fair for the performance and potential of individuals to be discussed by senior management out in the open, in a controlled and structured environment, against specifically defined criteria, than in any other less rigorous and less objective way.

If I am told by my assessor that I came out on the lower end of the 70 percent group, will I be at risk for being placed in the bottom group when the assessment process occurs next year?
    You will certainly be at risk if you don’t do anything about the feedback you received and wait until next year’s assessment. Openness and candor are one of the pluses of this program. If your manager tells you that you ended up in the middle 70 percent group, but that the discussion was such that you were clearly identified as being on the borderline of being placed in the lowest 10 percent group, you have some serious decisions to make. You can work with your manager to execute better against the leadership criteria and develop yourself, or you can ask yourself the question, “Is Acme it the right place for me”?

Isn’t this an example of Acme not caring about the people that work here?
    Absolutely not. Having the right leadership that can execute in the best possible way to successfully move the company forward is one of the best ways Acme can show that it cares for its people. There are thousands of employees at Acme, and countless thousands that directly and indirectly depend on Acme and the effectiveness of its leadership. By using this process, Acme will have a higher caliber leadership. This is evidence that Acme cares about its long-term health, future, and its people.

Appendices A and B excerpted from Forced Ranking: Making Performance Management Work, by Dick Grote. Excerpt copyright 2005 by Harvard Business School Press. Reprinted by permission of Harvard Business School Press from Forced Ranking: Making Performance Management Work, copyright 2005 by Dick Grote. All rights reserved.

Workforce Management Online, November 2005 — Register Now!