When Employee Ranking Systems Become A Legal Liability

Law360, New York (April 1, 2016, 11:11 AM EDT) -- Charles H. Wilson

Leila Clewis The recent kerfuffle surrounding Yahoo's employee performance rating system, known colloquially as "stack ranking" or "forced ranking", should come as no surprise, considering its noticeable similarity to performance rating systems utilized by other employers, which have, in recent years, received their fair share of scrutiny. Like so many other companies implementing a forced ranking system, Yahoo has had to endure fierce but likely unwarranted criticism, both internally and externally.

A number of employers have, before Yahoo, utilized a process wherein employees' names are ordered and reordered into a ranking curve consisting of upper, middle and lower...

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