Dive Brief:
- Uber’s performance management model is based on General Electric Co.’s old “rank and yank,” reports Quartz. Under the “rank and yank” model, also called stack ranking, employees’ performance is rated on a curve headed by workers the company identifies as star performers. Any employee who doesn’t measure up is on the way out.
- Current and past Uber employees say that, based on this model, as one worker advances in the company, another must fail. Quartz says Uber established a workplace environment that fosters fierce competition among employees.
- Uber CEO Travis Kalanick describes the company’s overall culture in equally competitive terms, Quartz notes.
Dive Insight:
Uber’s hyper competitive culture likely drives its winner-take-all performance management model. The culture might also have created a hostile environment in which employee complaints like those ex-Uber engineer Susan Fowler revealed are ignored.
It's another example of the pitfalls startup-like companies can fall into culturally, especially if they aren't careful to cultivate competitive growth with support. General Electric, creator of this performance ranking model, made headlines when it openly announced that it was no longer using it, and instead opted for an app-based, informal system that relied on multiple employee/manager meetings throughout the year. The newer programs are said to be less stressful on employees and create actual dialogue that helps employees succeed.
Uber has other examples to follow in the field, including Amazon's less austere model, Facebook's more formal model or the likes of Accenture, Microsoft and Adobe, who dropped the annual performance review entirely.
