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What is Stack Ranking? Complete Guide with Pros, Cons, and Modern Alternatives
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Published on:
July 4, 2025
Once upon a time, stack ranking or also known as forced ranking was a very popular performance management system utilized by the likes of Microsoft and GE. For some time, stack ranking was a staple for the world's most influential companies.
The idea was simple: rank individual against one another and evaluate based on this ranking. The promise was to reward excellence and weed out underperformance. That way, companies were able to create accountability. Yet, as times have progressed stack ranking caused a lot of controversy and discussion that eventually led companies to reform their ways.
In this comprehensive guide, we'll go over what stack ranking is about, how it compares to traditional reviews, what metrics are used and so much more. So without further ado, let's get into it!
Stack ranking is performance management system that ranks and evaluates its employees against one another ordinarily from best to worst. Instead of measuring the workforce with their objectives, stack ranking provides a comparative scale.
This method was originally popularized by General Electric and later implemented by Microsoft as well. Basically the process aimed to reward high performers, as opposed to identifying who isn't performing up to standards.
While both of them are serving the same purpose of evaluating employees they differ in significant ways when it comes to structure and impact. So let's break them down.
Stack Ranking: This method is more comparative. Employees are reviewed against each other and usually sorted into categories such as top, average, and bottom. This means someone's always at the bottom even if the team overall performs well. Typically conducted annually or semi-annually, many organizations now prefer more dynamic models like agile performance management that emphasize continuous feedback for a more holistic evaluation.
Traditional Reviews: These are more individualized. Employees are evaluated based on their pre-set objectives and competencies as well as the expectations set. These are reviews that we're all used to either annually or semi-annually.
Today however, many organizations lean towards more agile and continuous models of feedback for a much more well-rounded way of evaluating performance.
The Vitality Curve, or Rank and Yank, is a controversial evaluation model popularized by Jack Welch, the former CEO of GE. It's pretty much a form of stack ranking where managers are forced to classify their workforce as the top 20%, middle 70% and the bottom 10%.
The aim of this vitality curve is to continuously chase improvement when it comes to organizational performance and retain the best talent whilst removing the weakest links. It was Welch's belief that this pushed organizations into excellence and created accountability.
Yet, as you can imagine, this model has been heavily criticized since, as it also risks to harm morale and discourage collaboration with this much cutthroat competition continuously.
Stack ranking as we have established evaluates through a forced distribution meaning that a specific group will always have to be in the lower performance tier regardless of what the overall performance looks like. So let's take a closer look into what that might be like.
This is the vitality curve breakdown that we already discussed and it assumes a bell curve which is an assumption challenged by many experts in the modern business world.
Of course what metrics are used will likely vary depending on the company and the role types but they will more often than not include a mix of quantitative and qualitative data that we're all familiar with.
These metrics are often interpreted with a competitive lens as is the nature of stack ranking, which means that an employee's standing depends just as much as on how others are doing as their own.
So now that we have that covered, what are the pros and cons of stack ranking, really?
Some of the pros of stack ranking include;
Some of the cons of stack ranking include;
What about which companies that still use stack ranking, do any still refer to this method? Let's take a look.
Although they were the source of this method, General Electric doesn't use stack ranking any longer. GE officially moved away from the vitality curve that Jack Welch popularized in mid 2010s. The company instead shifter to a more modern and continuous feedback model.
Google does not use traditional stack ranking that we've discussed. Instead, they use a peer review and calibration process where employees receive feedback from both peers and managers which is then used to calibrate performance ratings as a whole.
Rather than rigid systems, Goodge prefers to balance objective metrics and peer input.
Microsoft also does not use stack ranking anymore. They abandoned the method entirely back in 2013. They once use to rely heavily on this approach but in light of the widespread criticism and the negative impact on morale and collaboration.
Similar to Google, Microsoft now uses a more growth-focused performance evaluation model that highlights teamwork, continuous feedback and employee development rather than relative rankings.
Yes, we've discussed all about stack ranking and its positive and negative impact. Now that we know for sure what affect it holds, what if you don't want to use it but still need an evaluation method? What are your options? Let's get into it.
Tools like Teamflect offer a variety of options or rather layers of collecting data on performance metrics and help you create customized methods on evaluating your workforce. With its strong, seamless integration into Microsoft Teams, Teamflect is a very strong tool that will help cater to your specific performance by providing you with a talent management platform that you trust.
Teamflect's performance management features allow you to structure your evaluations catered to your own needs as a company and community. Not only that but it also helps you integrate every facet of your evaluations inside Microsoft Teams. With Teamflect you can;
OKRs and 360-degree feedback is an integral part of performance management especially if you're focused on creating a growth-focused continuous feedback model rather than stack ranking your employees. With Teamflect's modules you can;
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Speaking of feedback it's important to not only collect it during evaluation periods but consistently gather insight continuously at your own preferred pace that you believe matches your company's needs. From there you can use all this information to not only evaluate performance through much more organized data but you can also utilize them effectively and create development plans. With Teamflect you can;
Still, is stack ranking still applicable in any cases? It may be narrow, but it could still happen. We'll explain.
For example, if you have a very large sales team where performance is literally tied to clear measurable metrics whether it be revenue or deals closed, stack ranking can actually help highlight top sellers and drive results as a team.
In another perspective, let's say you have a short-term intern program. Especially in a competitive environment with a defined end-point, you can actually make use of stack ranking as a way of bringing out performance and help differentiate candidates quickly.
You might also make use of stack ranking if you need a very quick way to manage a crisis and turnaround a situation. If you require urgent restructuring or downsizing, stack ranking can provide a structured framework for tough talent decisions.
Just because you're moving away from stack ranking does not mean you're fully abandoning performance evaluation. It just means shifting to a more dynamic, people-focused approach.
To do so, you'll need to adopt tools that can support ongoing check-ins, real-time feedback and collaborative goal setting. So in light of such tools, you'll be able to promote development over judgement and keep the workforce aligned throughout the year, not only on annual reviews but consistently each quarter to each month to each week.
Some best practices include;
If you're moving away from stack ranking specifically your managers may need to unlearn ranking mindsets and adopt a coaching focused approach. In terms of training, you should cover the following;
This way you can turn around the perspective of your company and leaders in a way that ensures fairness, consistency and employee trust.
Yes, but rarely. While many major companies have moved away from it, some still use it in specific contexts like sales teams or internship evaluations.
No, stack ranking is not illegal. However, if applied unfairly or tied to discriminatory practices, it can lead to legal risks.
It depends on how it's used. When transparent and fair, it can be ethical, but in many cases, it harms morale and collaboration, raising ethical concerns.
t can be effective for identifying top and low performers in very metric-driven roles, but it's often counterproductive in team-based, collaborative environments.
It tends to foster competition over collaboration, increase stress, and reduce psychological safety, especially in tightly knit or creative teams.
Yes. Some companies use a calibrated review process or peer-informed feedback systems that retain structured evaluation without forced comparisons.
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