A recent article published by Vanity Fair explored how this practice negatively affected Microsoft, Forbes further explored the history at GE. I am curious how many individual companies have adopted this practice and how much is affecting the unemployment number. If we truly have a systemic use of a stack ranking system across the entire economy we could surely see a larger long-term elevated unemployment level simply because companies are churning their employees. The original rank and yank program at General Electric systematically cut the bottom 10% of employees. I am curious if this is a systemic practice that laws should be enacted to prevent its use as it has broad reaching effects against the economy and some call and unfair business practice. In research studies I’ve read, researchers found that in the first three years there were benefits to running a rank and yank program for a company in need of a turn-around but that after year three the companies that employ this type of program started cutting their valuable employees.
The security practitioner side of me wonders how much this mandatory churning in employment at some large organizations leads to intellectual property leaking in an automated way towards competitor organizations. In my opinion the intellectual property leakage costs might outweigh the benefits of having an automated stack ranking program. What organizations really ought to do is have managers manage appropriately and provide appropriate training so that they understand when and if they need to terminate an employee rather than force them into some sort of systemic ranking scheme that has them terminate employees in an un-fair way.