The news that Ergo, a division of Munich Re the world’s biggest insurance company for other insurance companies, took over a company that organised an orgy in 2007 to reward its most successful sales people may have shocked many people at the time.
But you have to be impressed by the teutonic efficiency of it all.
The event was held at Gellert Baths in Budapest where 20 prostitutes were hired for the 100 participants. The women wore coloured armbands denoting their availability and whether they were hostesses, game for anything, or reserved for board members.
The men had to form an orderly queue of up to an hour to get into the 4-poster beds. After each interaction the prostitutes had their arm stamped. Not only could guests see at a glance which girls were more popular but the girls themselves could compare themselves with their peers and see which…
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He wonders why – in a world where top management talks about employee engagement and discretionary effort (i.e. getting something for nothing from your staff).
Companies are still using this kind of performance review where the bottom 10% are destined for the chop via a performance improvement plan (PIP) or by being “performance managed” – usually out of the company.
Apparently it’s not so common now in the USA because of legal challenges (Jack Welch would be unhappy about those) but is on the increase in the UK.
Yahoo talks about quarterly performance reviews, General Electric calls it the “vitality curve” (presumably if you’re not vital you’re out). The Civil Service call it “expected” or “guided distribution”.
The bottom line is that a manager can have a really high performing team but has to put 10% of them into “special measures” as Ofsted would say – even though they might all have exceeded their targets!
As Bevan says this approach is toxic. And generally performance review systems don’t work, and are based on faulty scientific thinking around distribution curves. Staff themselves aren’t happy with being rated average because they met the targets they were expected to.
We may not have decimation in its original sense viz 1 in 10 roman soldiers killed by their colleagues as a punishment for the whole cohort showing cowardice or disobeying orders, but we do have 360 feedback!