In July 2012 Yahoo was struggling with competition from other firms and had problems innovating, at that time a new CEO came in, Marissa Mayer. She decided to implement a marking based on a curve, or as it’s more commonly known “rank and yank”, this grading system meant that the bottom part of the curve would be fired. It was also around that time that Windows decided to discontinue the use of such grading system

Marissa Mayer, CEO of Yahoo

Should a company implement a grading system?

This question has been asked by many executives around the world, however the answer is not as simple as yes or no. There are some companies which have seen very positive results from such a grading system. Looking at different companies where this system had been implemented there is a striking similarity. The metric acts as an incentive for workers to sabotage their colleagues and work individually rather than as a team.

Creating a competitive environment for workers could potentially prove very beneficial for the company in the short term. However this could have a crippling effect on the future of the company. This is mostly due to the fact that the vast majority of employees would look for a new place to work, draining the brain power of that company.

Source 1: http://www.businessweek.com/articles/2013-11-12/yahoos-latest-hr-disaster-ranking-workers-on-a-curve

Source 2: http://www.huffingtonpost.com/2013/11/12/marissa-mayers-latest-hr-_n_4260762.html