What Is Stack Ranking? (With Pros and Cons)

What is stack ranking?

Stack ranking is a performance measurement model also known as “forced ranking” or “forced distribution.” This system assigns a rating to each team member based on a bell curve distribution, breaking them into the following groups:

High performers: Employees who consistently excel in productivity, engagement and innovation, driving exceptional results (top 20% of the workforce).
Core contributors: The majority of employees who reliably meet performance expectations and contribute to overall team success (70% of the workforce).
Growth-focused employees: Team members with opportunities for development and skill enhancement, benefiting from additional training and support (bottom 10% of the workforce).

After employees are placed within a stack ranking system, you can use this insight to recognize achievements, provide career growth opportunities and support employee development. This may include raises, bonuses and promotions for high performers while offering targeted training and mentorship programs to help core contributors and growth-focused employees enhance their skills.

Many organizations leverage stack ranking as a tool for strategic training and development rather than as a punitive measure. However, assigning the “high performer” label to only 20% of workers may negatively impact the remaining 80% and result in low morale.

Pros of stack ranking employees

By using rankings to identify areas for upskilling and career advancement, businesses can foster a culture of continuous improvement and long-term success.

Key benefits can include:

Strategic talent development: By gaining a clear view of employee performance, leadership can identify skills gaps, provide targeted training and invest in professional development to support career progression.
Recognizing high achievers: Stack ranking highlights top-performing employees, allowing businesses to reward excellence through promotions, bonuses and leadership opportunities.
Supporting employee growth: Employees who need additional development can benefit from mentorship, coaching and personalized training plans to help them reach their full potential.
Strengthening team collaboration: A well-structured ranking system encourages open discussions about performance expectations and fosters a culture of continuous improvement.
Enhancing workplace accountability: Establishing clear expectations and evaluation criteria helps employees understand how their contributions impact company success.

Cons of stack ranking employees

Ranking employees along a bell curve can be a useful performance evaluation strategy, but the evaluations may introduce other challenges, such as:

Overlooking worker achievements: Stack ranking employees into three categories may overlook areas of success based on how these percentages are calculated. For example, one employee may generate many leads per month, but another employee may have helped turn those leads into loyal customers.
Introducing imposter syndrome: Some employees may struggle with imposter syndrome, leading them to question their contributions and value at your company. The bell curve may disparage their efforts, potentially reducing confidence in their abilities.
Being influenced by unconscious bias : Depending on the measures used to rank each employee, personal bias may influence leaders to select favored employees for their top 20%.
Creating interdepartmental confusion: Stack ranking can be done within each department, but when calculated across the organization as a whole, it can create unequal evaluation metrics when measuring the performance of employees in different roles.

Alternative methods to stack ranking

If stack ranking employees isn’t the right choice for your business, there are plenty of other ways to measure employee performance. Here are popular alternatives to consider:

360-degree reviews: This process involves gathering employee feedback from multiple sources, including managers, clients and peers, to provide a well-rounded evaluation. These reviews can provide a more comprehensive sense of performance in many key areas, including strengths and areas for improvement, to help leaders tailor training efforts.
Management by objective (MBO): Managers and employees collaborate to determine goals and outcomes within a set timeframe. Then, managers measure performance based on the employee ’s ability to achieve those outcomes. Under this model, team members are more involved in their goal-setting, and managers can better understand what employees want to accomplish, which may also improve employee-manager relationships and communication.
Peer review: Team members provide feedback on each other’s performance, offering valuable insights into areas for improvement. This perspective helps managers tailor training to address specific needs that will most enhance the team’s overall performance.

FAQs about stack ranking employees

Can I take a hybrid approach to stack ranking?

Yes, it’s possible to apply stack ranking as a general rubric of employee performance. You can then apply other employee vetting processes and improvement strategies to create better workplace productivity.

What kinds of businesses benefit from stack ranking employees?

Stack ranking may work best in larger business organizations with specifically defined workforce profiles. Companies with a hierarchical culture tend to be better suited for assessment that uses the bell curve model.

Alternatives to Stack Ranking Employees