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What GE’s Rank and Yank Teaches Us
How GE’s Rank and Yank Failed
Rank and yank is a management method where employees are ranked based on their performance compared to coworkers, not against fixed standards. The lowest performers are typically “yanked” or fired. Employees are often grouped into percentiles — like the bottom 10%, middle 70%, and top 20%. Those in the bottom 10% risk losing their jobs or getting a chance to improve.
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The main goal? Push high performance by sparking competition. The idea is that rivalry motivates employees to work harder. Companies use it to boost efficiency and cut costs, hoping that removing low performers will lift profits.
To talk about rank and yank, we should start with one of its famous pioneers: General Electric.
Former CEO Jack Welch created the “Vitality Curve,” also called “Forced Ranking” or “Rank and Yank.” He claimed it nearly doubled GE’s revenue in the 1980s and 1990s. Welch introduced it because he felt GE had grown too big and too comfortable. He also argued that the company wasn’t good at measuring employee performance, which killed motivation. His fix? Push staff to work harder — or risk getting fired.
