The Return of Rank-and-Fire

The past week saw a raft of organizations, from tech companies to media networks to the U.S. government, announcing job cuts. At least one company, Microsoft, is taking a Darwinian approach reminiscent of GE's former CEO Jack Welch by targeting low performers for the cuts. Rank-and-fire has an irresistible allure for some governing board members at schools, and we fear that its return in the business sector will ignite a new round of calls for school heads to prune their faculty ranks in the same way. 

A rank-and-fire approach to performance management fundamentally misunderstands how to cultivate excellence and innovation in the workplace. This system inadvertently creates a culture of fear and competition that undermines collaboration and psychological safety. When employees know they are being ranked against their colleagues, they become less likely to share knowledge, mentor others, or take creative risks – all essential elements for driving growth and innovation (see Sam Walker's book, The Captain Class for more on the importance of these factors in organizational success). 

A rank-and-fire approach also fails to account for the complex, interconnected nature of modern work from the classroom to the factory floor. An employee's contribution cannot be reduced to simple metrics or rankings, as their true value often lies in their ability to enable others' success, maintain institutional knowledge, or contribute to a positive team culture. Reducing headcount may be necessary for a number of reasons, but leaders shouldn't default to numerical rankings as a decision-making tool in lieu of exercising managerial judgement.