Being on a great team could get you fired for being ordinary
Jack Welch's rule forced managers to rank employees against each other every year — and the best teams paid for it the hardest.
Jack Welch, running General Electric through the 1980s and '90s, formalized a review system that sorted every executive into three tiers: the top 20%, a solid middle 70%, and a bottom 10% marked for dismissal, no matter how the year actually went. The system became known as stack ranking or, more bluntly, rank and yank, and dozens of large companies — Ford, Microsoft, and Conoco among them — adopted versions of it.
The quota is the whole mechanism, and it produces a strange arithmetic. If ten equally capable people land on the same team, one of them still ranks last, purely because someone has to. Get assigned to an unusually strong group and your odds of a bad review go up, not down — the same performance that would put you in the top tier on a weaker team gets you cut on a stronger one.
The lawsuits followed the logic. Ford settled a class-action suit for $10.5 million after its forced-ranking system was found to disproportionately push out older and minority employees regardless of actual output; Microsoft's version drew similar litigation and, by most internal accounts, encouraged employees to sabotage each other rather than collaborate, since a colleague's success mathematically increased your own risk.
By the mid-2010s most large firms had quietly dropped the practice. The company can always find the math to fire ten percent of anybody. Whether that math means anything about performance was never really the question stack ranking was built to answer.