Why Ranking Employees Against Each Other Doesn’t Work

Feedback and evaluation are key to organizational success. We must know how we’re performing at our jobs in order to continuously improve and keep our organization moving forward. At one point, we all used benchmarks: From childhood through higher education, we had clear grades presented to us multiple times a year to let us know exactly where we stood in comparison to a mandated rubric.

Feedback and evaluation are key to organizational success. Click To Tweet

Some of us found being measured against that external benchmark comforting, and some found it asinine. Either way, when we began our professional careers the method of evaluation changed drastically.

Temporal Comparison and Social Comparison

Tasks at work are more complicated and nuanced than school tests, so working against a baseline quickly becomes difficult. Governmental bodies still use baselines to rank certain roles, but they have well-defined and documented duty expectations to use, in addition to a wealth of data about performance.

Most companies tend to favor either comparing employees’ performance against their own previous performance (temporal evaluation) or comparing employees’ performance against each other (social comparison). Each method lends itself to a certain mindset at work and represents a defining element of how colleagues interact.

How People Prefer to be Evaluated

On a practical level it makes sense to use temporal comparison, because people may have different areas of experience, more difficult clients, or varying home situations. It simply doesn’t make sense to rank a graphic designer tasked with providing concepts for advertising against a software engineer who has just moved from a technical to management role. What success looks like in each of those roles is wildly different. Social comparison in this case runs the risk of appearing that the organization favors certain functions rather than valuing everyone’s work.

SEE ALSO: How to Effectively Change Performance Management

So let’s make the case tighter: Ranking software engineers at about the same level, working on the same product team. One could argue that ranking them against each other would encourage healthy competition and help them to push themselves. Some organizations are absolutely using evaluation and feedback procedures based on this mindset. Yet in studies, people dislike being evaluated this way.

Most professionals would much rather use temporal comparison. They prefer for their current work to be compared against their previous efforts, and to keep competing against themselves for improvement going forward.

Why “Fairness” Matters

A key finding in studies is that people who undergo temporal comparison cite a higher perception of interpersonal fairness in the procedure. This means that they feel they are being treated with dignity and respect. The perception of “fairness” matters in an organizational context because it has weighty externalities:

  • Research has found that people who feel they are being fairly treated have higher levels of motivation. This makes sense, because if you are putting forth effort in a fair environment, you have reason to expect your effort will be noticed and appropriately rewarded. People are more likely to go above and beyond in this context.
  • A study of more than 5,800 workers found that when perception of fairness at work changes, the self-reported health of employees changed in tandem. Even if this is a placebo effect causing workers to feel their health is worse rather than undergo changes reported by doctors, the outcome is still employees putting forth less than their best work and feeling unwell physically and mentally.
  • Lack of fairness can carry a variety of associated costs. Lost productivity is a day-to-day cost, but in the long run, unfairness can lead to decreased retention as people seek places to work which feel more egalitarian. Unchecked, retention can be extremely costly—some estimates peg it as 6 to 9 months’ salary to replace each vacated position, each time.

The Psychology of Comparison

For those who study human psychology, the adage “comparison is the death of joy,” certainly rings true. According to research, when we focus too much on comparing ourselves to others we encourage negative feelings of envy, low self-confidence, and depression. Social comparison can easily distort our self-image and makes us distrust one another.

Even when we compare ourselves to someone worse off, we are still buying into a harsh ranking system which asks us to draw self-worth from others’ misfortune. Happiness becomes fragile, the product of a zero-sum game.

If people are always jockeying against each other for rankings, how can they effectively collaborate? Click To Tweet

One can imagine that in a work atmosphere of harsh social comparison employees would be demoralized. Not only that, but people would struggle to build the trust necessary for working together. If people are always jockeying against each other for rankings, how can they effectively collaborate towards a common organizational goal? The distraction of infighting could easily overwhelm an organization’s chances for innovation and success.

At its core, there is also perhaps something more fulfilling about growing and improving oneself than claiming a fleeting victory over a colleague. Developing an intrinsic sense of self-worth is vital to long-term contentment, and it doesn’t require throwing others under the bus.

Conclusion

It should be noted that social comparison can be useful in certain circumstances. For example, a manager might notice that most of their team is progressing in certain skill areas, but one or two reports are progressing more slowly than their peers. The manager can then investigate further to see if perhaps those reports are having technical issues, need key questions addressed, or could be helped by peer mentors. Behind the scenes, social comparison is simply one way of examining performance data for insights.

Using 360 reviews and quarterly check-ins helps provide managers with the visibility into each individual’s performance. Equipping managers with tools that are easy to use is key to enabling them to best coach and develop employees.

SEE ALSO: Ultimate Guide to Employee Check-Ins

The problem arises when evaluation and feedback is presented under the lens of social comparison to employees themselves. Rankings and outright comparison of people’s performance leads to negative psychological outcomes and perceived lack of fairness.

Instead, leaders and managers would do well to keep a clear, fair record of their reports’ performance over time and use that as a basis for evaluation. This way, employees can set realistic goals for continuous self-improvement and feel encouraged to collaborate with one another towards greater success.

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