Why employee rankings can backfire

This NY Times article talks about how employee rankings to drive up performance can actually backfire.

In the workplace, promoting competition between individuals can have several effects. Instead of driving up performance, in an context that needs people working in teams with high levels of collaboration, there can be several opposite effects. One tool for promoting competition in order to improve performance is through HR assessments and ranking. When ranked in a list, people can exhibit the following behaviour:

1. Some feel positive, and strive to do better in order to increase their rank or to stay at the top
2. Some feel demoralised at the valuation of their performance, and reduce performance and fall down the table
3. Some feel content and stick with what they are doing, thus maintaining performance and rank position
4. Some feel suspicious and have less trust in management and the company, which may result in reducing performance or even a tendency to sabotage the process or the company

As a result, in some cases, it may be better to inform each individual privately of his/her performance and not to publicise ranking tables. In others, designing multi-level performance rewards that celebrate performance at different levels may be helpful – only rewarding those at the top may create animosity, however, rewarding ‘most improved’, ‘most innovative’, ‘most supportive in a team’ will create a positive team culture.

Source: http://www.nytimes.com/2015/07/12/business/why-employee-ranking-can-backfire.html?_r=0