Can a bad human resource management system bring down a company? We take a look at some of the human resource management systems with a bad reputation.
«Once upon a time there was a girl with an enormous talent for accomplishing her tasks, alias Cinderella, whom one day the top manager, alias the prince, discovers at a ball. Unaware of her identity, he uses a glass slipper to find her».»
With this adaptation of the popular Cinderella story, Rocio Cervantes, human resources consultant and co-founder of HRLab.co.uk, uses the metaphor of the glass slipper to refer to the different systems for identifying talent. Human resources managers yearn for a system like the shoe in the fairy tale, capable of magically identifying who is the right person for the job in question.
One of the most controversial performance appraisal systems in recent times has been that of the Gaussian bell, The ‘vitality curve’ or ‘forced ranking’.
An example; General Electric, one of the pioneers, used a 20-70-10 ratio. The 20% at the top of the table - the best employees - got the bonuses and promotions. Those in the middle stayed the same. And the bottom 10% were demoted or fired.
At the end of August 2013, Steve Ballmer, CEO and co-founder of Microsoft, resigned from his position and announced that he would be stepping down for the next twelve months. This dismissal only fuelled criticism of the Gaussian bell because he appears to have been “the management method that has led to Microsoft's failure”.
This type of performance appraisal system creates a bad working environment, as employees sabotage each other in order to prevent others from doing better than themselves. There is competition with peers, rather than in the marketplace.
Cervantes explains that “bad HR practices occur mainly at the management level”. And he points to those companies that have well-developed HR policies, “but they don't end up being implemented as they were originally designed”. Why is that?
1.The HR function does not sufficiently support the leaders in their role as people managers, providing the tools they need to identify, develop and assess the talent of their teams.
2.Leaders do not use the tools at their disposal correctly and continue to apply discretion (who am I going to promote this year, who am I going to give a bigger bonus to, etc.).
