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Winners podium
Rank and Yank sorts the winners from the losers amongst an organisation's employees. Photograph: Toru Yamanaka/EPA
Rank and Yank sorts the winners from the losers amongst an organisation's employees. Photograph: Toru Yamanaka/EPA

Culture change is needed in the civil service as well as in banks

This article is more than 11 years old
Culture is led from the top, not the bottom – so let's get rid of "rank and yank" in the civil service

It is striking that politicians of all parties now agree that our banking system needs an urgent dose of culture change.

Anyone who has been involved in culture change in organisations knows that it is all about those who lead the organisation demonstrating the culture they want their staff to adopt. It is blindingly obvious that a major dose of culture change is required by our major banks, and the real debate now is about how much of a change in leadership must happen within banksfor their leaders to have the credibility to initiate this culture change.

But it is not just banks who need to look at their culture. We need to look at the culture of our civil service, too.

The recently published civil service reform plan says government departments will "implement a senior civil service appraisal system which will identify the top 25% and the bottom 10%". While these words were carefully crafted to try and avoid controversy, the story quickly became one about Cabinet Office minister Francis Maude declaring that the bottom 10% of civil servants face dismissal within a year if they fail to improve.

The phrase "bottom 10%" brings back memories of Jack Welch when he was running General Electricfrom 1981 to 2001. He called it "forced ranking" and most American businesses now call it "rank and yank". It was popular in the US for many years, but has dropped dramatically in popularity: a recent study by the Institute for Corporate Productivity found that the number of US companies using a forced ranking system dropped from 42% in 2009 to 14% last year.

The reason for this is the system's impact on organisational culture. It stigmatises under-performance and drives it underground, which is the last place you want it to go.

This is why more and more leadership teams recognise that the key to flushing out under-performance is to argue, from the chief executive down, that we all under-perform at one time or another. If Maude resists this proposition, he just needs to recall two of his most famous words: "jerry cans".

We ALL under-perform occasionally and we can't have an honest debate about performance management unless we start from this proposition.

What's particularly absurd about the 10% figure is its arbitrariness. If an organisation is serious about tackling under-performance and 30% of its staff consistently under-perform and refuse to raise their game, it should be prepared to get rid of 30% and not just 10%. Should the outcome be that only 3% consistently under-perform, that's the number that should be at risk through the appraisal system.

To come up with a specific figure in advance of challenging staff to perform better will be seen by many as creating an excuse to get rid of them for other reasons, which is hardly conducive to creating a higher trust and more open culture.

The government's focus on the top 25% of elite civil servants is bound to promote more defensive, self-justifying behaviours among the remaining 75%. It will encourage just the sort of macho and competitive culture from which the banks are being asked to move away.

Let us take ministers at their word about culture change and ask that they free their plans for civil service reform from the baggage of "rank and yank".

Pete Ashby is director of asaleader.com and specialises in working with organisations to develop high trust, high performance cultures.

This article is published by Guardian Professional. Join the Guardian Public Leaders Network free to receive regular emails on the issues at the top of the professional agenda.

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