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In fact, elements of the management structure championed by former Enron CEO Jeffrey Skilling, who instituted a "forced ranking" system, have infiltrated deep into corporate America. Such systems rank employees along a bell curve in which the top 10% typically receive an A grade or equivalent, the middle 80% earn a B, and the bottom 10% earn a C--and a send-off if they don't improve. Such "rank and yank" systems gained popularity in the 1990s, and about a third of companies now use them, up from 13% in 1997, according to the consulting firm DDI. "Of course, you don't want to make the B's feel bad, but you also want to instill a philosophy of continual improvement," says Noel Tichy, a management professor at the University of Michigan and a GE alumnus.
Critics say rank and yank can be used as a smoke screen for downsizing or simply dumping older workers who populate the lower rankings. Ford and Goodyear dropped their forced-ranking systems after a number of discrimination lawsuits. GE is using its grading practice to cut labor costs, says a former manager in the medical division. He says he was pressured to identify employees as "Code 4s" (on a 1-to-4 ranking scale, with 4 being worst) and "get rid of them. I never had 10% of my workers who were Code 4s, but I had to come up with that number. It was baloney." A GE spokesman had no comment.
Another way of looking at B players is that they're people who have a life outside the office. Some Silicon Valley companies are latching onto the idea that B players are valuable. Guerrino De Luca, CEO of Logitech, says, "We have a lot of B's," whom he describes as employees who "don't emphasize self-promotion and don't want to be heroes and work 18 hours a day." Logitech is best known for producing stylish computer mice and an array of other computer products and tech services. De Luca, a native of Rome, tries to convey the message to B's that he and other top executives identify with them. Country-club memberships and other perks that might breed class resentment are frowned upon; everyone flies coach, including the CEO. De Luca roams the halls to chat with lower-level staffers and encourages everyone to e-mail him with ideas. A few years ago, he dyed his hair pink after losing a bet with an employee. That sent the signal, he says, that "the boss may be crazy, but he's somebody I can talk to."
David Martinez, 34, a website producer, joined Logitech 15 months ago after a stressful stint at an Internet start-up. There, he says, the CEO would "rant" if he noticed empty cubicles before 7 p.m. He decided to join Logitech because he was tired of "being driven into the ground. You have to put in the hours at a start-up, but they focused too much on those A people and not enough on the people who were doing the work."