This morning I read Margaret Heffernan’s post on BNET blog and almost cried. I just spent four days at the Apple Store in Lynnwood, WA getting my new MacBook Air and solving a few problems with Mobile Mac. It was a magnificent experience. I felt completely cared for and as if I was in the midst of true professionals. And then I saw this post and wanted to scream at Apple HQ because they are risking losing all of that by a stupid management practice: rating and ranking employees.

Here’s part of what Heffernan said: “I know Apple is supposed to be the byword for everything wonderful and, as a Mac user, I am an enthusiast. But I’m not a blind follower and there are aspects of Apple Computers that are less lovely than perhaps meet the eye.”

Chief among these is its use of competition to motivate employees. According to a recent ‘confession’ by an Apple store employee, sales metrics are posted so that everyone can see them. “It shows you how much money each person is pulling in for the company. If you aren’t doing very well, you start getting manager meetings, and they sit you down and try to figure out why you aren’t selling more.”

Competition as Motivator?

In other words, Apple is hoping their salespeople are competitive enough to want to appear at the top of the list or that they are at least afraid of turning up near the bottom. “We aren’t paid on commission, but you fear for your job if you’re not selling enough.” In the current economic climate, no manager needs to say anything to ratchet up that fear.

Heffernan spoke to the ethics of this quite well. I want to add a piece on the practicality of such ideas and why I think they undermine the very success that Apple’s loyal customers value. I want these professionals creating for me forever and I want people like Chris—who patiently spent three hours over two of my trips there solving a problem not even created by Apple, but by a partner, MobileMe—to focus on me and not the list just inside the door behind us.

Five reasons Ranking and Rating does not work

Ranking and rating is the practice of seeking to motivate people by letting them know how they rank against others in the same or similar roles. Incentives and many reward and recognition programs do this. Making frequent lists and making them public, such as rankings of “high, medium, and low performers,” is common. So what’s wrong with that?

  1. Compares Apples and Oranges – Different people serve the customer differently at different times in a sales process. Some educate you but may never get credit for it. I shopped four times with four different salespeople, then returned and bought in about ten minutes from a fifth sales person. No credit to numbers 1-4 for the twenty or more minutes they each gave me. But they were the most helpful to me. I had heard the refrain so many times, “We are not paid on commission, that I didn’t worry.” Next time I will worry and this will cause me to think about the wrong things.
  2. Commoditizes People – Ranking and ranking does not allow salespeople to create distinctive experiences for customers. All employees (and every customer) are unique and shine when they are being themselves. Research shows they are more creative and expressive when they are valued for their uniqueness. That is what makes a business work. It is far different from comparing people to one another and sending the message that “you are all the same.”
  3. Turns Employees’ Eyes in The Wrong Direction – Anytime a salesperson walks past a list of rankings, it will capture their attention and they will think about it. Now they are looking at the other people in the store or office where they work and not at their customer. It’s hard not to think about how much time it’s taking and how slowly the person is deciding. Also, a store’s success depends on its people counting on one another to know different things and have different skills. The list invites people to stop supporting one another and eventually they will, especially anyone above them on the list. The human brain is structured that way. Which pack, tribe, group am I in? Who is outside of my group? This is a very difficult instinct to override: Every man and every woman for themself.
  4. Evokes Reactive, Not Purposeful Behavior – All businesses are more creative and customers are more satisfied with what people think and do on purpose. This entails thinking about others when making choices and knowing that one is part of a system, not in a pit bull arena, fighting for the “win.”
  5. Weakens Agency Over Time – Human agency is taking responsibility for our effects in the world and activating ourselves to contribute. For the most part, it depends on self-evaluation and not on evaluation by others. Agency arises when it is linked to something that really matters to the actor. Usually, when this is the case, the actor will not be stopped until their goal is achieved. Evaluation by others, especially in the form of ranking and rating, weakens the drive to make important differences for others and for the world.

What To Do Instead

  1. Create strategies for your business that are based on improving the life experiences of real people. Challenge everyone involved  (including suppliers) to achieve or surpass the targeted pursuits, without regard to how they rank in the process. Measure everyone by the overall, external success.
  2. Let people set their own goals for contributions that will really matter to the customer plan and that exceed their current abilities. I call these goals “promises beyond ableness.” Repeatedly people push themselves harder than others will when the culture is about aspiring to contributing to something greater than their own self-interest. This is especially true when they have to learn more about themselves and the work in order to  succeed.
  3. Foster self-organizing work to achieve individual ends. Encourage people to pull in the others they need to realize their goals. This will require them to convince themselves and others of the value of their ideas in order to gain full support.
  4. Assign responsibility for evaluation to the person who set the goal and the team that agreed to support or work with him or her. In this case, evaluation will be based on achieving the ends and not on personal performance. It will include asking how each member of the team will grow and develop to make the next steps successful. It will focus everyone involved on personal and customer growth, not on internal goals.
  5. Create a culture of continuous development in which all work is perceived as able to be improved, even in the next round, and the uniqueness of each individual, raw material, customer, and market is valued and not lumped into generic groups.

My Apple Store is a place I love to go. Or did love. Now I’m worried about its future. Ranking and rating is a known bad practice. Daniel Pink collected the research that demonstrates this in Drive: The Surprising Truth About What Motivates Us, particularly for the versions that include incentives. There is no difference between one form of extrinsic motivation and another. They all affect the brain and behaviors in ways that undermine creativity, collaboration, and human agency. These are acts of irresponsibility; they work against the way we work as humans.

For more details on how to create responsible organizations: The Responsible Business provides case studies of intrinsic motivation practices that have succeeded over the last fifty years, in direct contradiction of the trend to worst practices of the sort that Apple is adopting.