Fit. Fitter. Fittest. The fit get ejected. The fitter-the bulk of the bell curve-try harder. And the fittest try harder still, to survive as the fittest. The unfit, of course, shouldn't even be there.

It's the rank-and-yank method of keeping an organisation's human resources competitive. And it follows the logic of the 'vitality curve'. The curve here refers to the 'normal distribution' of performance, which peaks in the middle (average performance) and tails off towards the good and bad extremes. Shorn of statistical jargon, it's a process of staff revitalisation through forced ranking, with the worst-performing 10 per cent replaced every year.

The idea was first popularised by GE's Jack Welch, who used a 4-e formula to grade individuals: person's own level of Energy, ability to Energise others, the Edge to make yes/no decisions, and the ability to Execute. Using these, GE classifies people as a, b or c players (in a 20:70:10 ratio). as are cherished, BS need training and CS need to job-hunt.

Another way to categorise people is to make a two-dimensional 3x3 matrix of 'current performance' and 'future potential', with those who're third-bracket on both parameters shown the door. And the shake-up is not supposed to stop; if the fresh recruits are good, today's b managers can become tomorrow's c managers. It goes on, year after year.

Push It Up... And Up

If GE sounds a little too hardnosed for your liking, try Hewlett-Packard (hp). Or Gillette or The Coca-Cola Co. Many others are on to it, too. According to industry sources, every sixth company in India is now using some form of forced rankings. The difference, though, is that the 'yank' part is not always enforced. Even when it is, the process is not as insensitive as it sounds.

Says C. Mahalingam, a former hr honcho at hp, "At hp, 5 per cent of the employees are identified as c-graders every year, and given an improvement plan of three months, in which managers provide support, guidance and coaching. And if they still don't shape up, they're given the boot."

Nothing personal. It's just the force of competition. That's also why tech firms are the most dedicated adherents of the Vitality Curve. Sun Microsystems uses it. But Hemant Sharma, Head, Human Resources, Sun Microsystems India Pvt Ltd, insists that the idea is just to identify underperformers so that they can be coached.

Not every firm uses the term 'Vitality Curve', but the broad objective is to keep people on their toes, and the firm vibrant. After all, there's always a job-seeker who might be more deserving than an incumbent. Says Ernest Louis, hr Head, South Asia and South-East Asia, Monsanto. "Either they shape up or they ship out."

The details differ from firm to firm. PepsiCo uses a quartile ranking. Cisco spells out its 'up or out' policy, putting c-players on a Performance Improvement Plan (PIP) with written goals (if they fail, they're 'pipped').

What's common to all is the fact that employees are ranked against each other, and not just against performance standards in isolation. "Managers must place each person into one of a limited number of categories, with a fixed percentage assigned to each bin," elaborates Shailesh F. Shah, Managing Director, Watson Wyatt.

The Vitality Curve, and the concept of ranking, has its fair share of critics. The fiercest ones slap the system with labels ranging from 'discriminatory' and 'subjective' to 'divisive' and 'arbitrary'. Such critics reserve most of their ranting for the risk of personal and political considerations influencing the rating process.

Upholders of the Vitality Curve, however, claim that the criteria are mostly objective, and the rating process is transparent to the extent that any hanky-panky would cause corporation-wide alarm (denting the firm's reputation as a professional workplace). Measurement becomes tough in jobs that entail grey-area performance, admits Dhruv Prakash, Practice Leader (People Value Management), Hewitt Associates. But even here, he adds, objective value-drivers can be isolated as discrete parameters.

Still, critics say that there's an element of institutionalised persecution in a system that perforce classifies 10 per cent of people as c-players, regardless of factors that could have a mitigating effect when judged independently. Besides, the comparison scale may not be foolproof. It is possible that the 'underperformers' of highly productive departments are contributing more to the firm's goals than the A-players of other departments.

And Make That Clear... And Clear

Eventually, as with any other tool, efficacy would be the best way to judge the Vitality Curve. So, does it work?

Observations differ. Some say that morale falls. "Clearly," says Purva Misra, Consultant (People Value Management), Hewitt Associates, "routinely asking people to leave may not be the best answer or a panacea to the performance problem." People need to be intellectually and emotionally committed to their firms.

Sceptics also say that forced rating militates against teamwork, since it inculcates zero-sum attitudes; a worker can gain only at the expense of a colleague. "Relationships get strained instantly," says a manager who's seen it happen to his team.

Vitality Curve advocates, however, argue that mature corporate cultures understand how to balance interpersonal equations with their own ambitions. If team goals are well set, people realise the power of collaborative effort. All that ranking does is make superiors take the tough decisions-in a systemic manner-that they're loath to. And there is experience to back this up. Adil Malia, Director, Human Resources, Coca-Cola India, for example, says that the system is recharging the company with vibrant new minds.

According to Ed Lawler, professor and director of the Center for Effective Organisations at the University of Southern California, supervisors have always rated employees and made judgements on 'stars' and 'goners'. Best, then, to bring as much statistical rigour to performance evaluation as possible. It's the unformatted churns and 'let's-get-tough' spasms that get messy.

Everyone needs to know what's on and what's off-clearly defined, agreed upon and implemented tightly. No doubt, there's still the danger of turning people into obsessive score-trackers. Or, of the process getting so enshrined and encrusted over time that it fails to keep pace with changes in the business environment. Performance metrics need to keep changing. Remember, the Vitality Curve is just a tool.