Performance Appraisal Process

For years, Microsoft has used a technique called stack ranking. Stack ranking is a process where each business unit’s management team reviews the employees’ performance and ranks a certain percentage of them in the following manner:

Top performers

Average performers

Poor performers

Which of the following are the potential challenges that a company using this system might face?

(Note: More than one option may be correct.)

Breeds unhealthy competition among colleagues

Does not focus on team collaboration

Hampers employee development

Good performing employees in a team may need to be given poor reviews in order to match the system