The Return on Investment of Rank and Yank in a Simulated Call-Center Environment

Abstract

Much has been written about “rank and yank,” a management technique centered on annually pruning a workforce of low performers to raise average levels of organizational performance over time. Companies using this approach identify and fire the lowest performers in their workforce and replace them with new hires. As a general workplace practice, rank and yank has been harshly criticized on practical and theoretical grounds. Although rank and yank might not be suitable for all workplace environments, this paper postulates that it could be a powerful performance-improvement approach in certain conducive workplaces and goes on to outline why call centers are one such environment. This study then examines both the performance improvement and financial returns of a 5-year simulation of rank and yank within a call-center environment. The simulation was run under an ideal condition (no voluntary turnover) and for a more typical call center (30% voluntary turnover). Annually yanking the bottom 10% resulted in significant and rapid performance and financial gains in both the baseline and the more realistic call-center-turnover scenario. The authors conclude with a discussion of the issues call center leaders and consultants should think through before proceeding with a rank and yank implementation.