Noted Forced Ranking Enthusiast Deloitte Declares Forced Ranking Dead
The timing of this discussion is pretty good considering we have not one but two hot conversations happening in Open Items as we speak; one person was “forced to resign” from the Big 4 after just 6 months, while another person asks if anyone has been or knows anyone who has been coached out. You will see momentarily what this has to do with forced rankings but for now, let’s pull an old article out of the archive from Francine McKenna:
Layoffs Watch ’13: Rothstein Kass
It's that time of year when public accounting firms start showing the underperformers the door and we have our first confirmed across the board cut at it has happened at Rothstein Kass. The first we heard of the layoffs was in mid-April when we were informed by an anonymous tip that the firm would be […]
Will Ernst & Young FSO Start Forced Rankings Next?
We're getting word things are becoming a little claustrophobic over at Uncle Ernie's house. From the mailbag: In NY – FSO (EY) apparently there are so many high performers at staff 2 that discussions regarding ratings are still ongoing to help normalize the rankings. "Normalize" is never a good word. Animal shelters "normalize" their populations in the […]
Forced Rankings Appear to Be in Full Effect at Ernst & Young
Confirming some discussion in the comments from last Friday’s Ernst & Young compensation post, a source got in touch with us with more details on some rankings getting chopped:
I’ll confirm what your sources are saying about reviews being available in fso. Not only that, but forced rankings are in full effect. While [there] was less pushback during roundtables earlier (which was accurrate at the time), the ratings for at least 5 people were lowered by a notch from what was agreed to by the full committee at the end of may. (5 to 4, 4 to 3) While they do say after all people are discussed they’ll assess the levels to ensure the same criteria is being used, I firmly belive its being used as a way to lower ratings (and raises). Why have the formal review committees (roundtables) if the partners are going to have the ability to act unilateraly to ‘right size’ the ratings?
We’ll still have to wait a couple more weeks before we find out if the forced rankings actually translate into disappointing raises, as the official communication won’t come until August but this news surely doesn’t bode well. If you got knocked down a peg, discuss below and as always, keep us updated.
Layoff Watch ’10: McGladrey Makes Nationwide Cuts
Over the past month, we have heard lots about layoffs at RSM McGladrey/McGladrey & Pullen but we didn’t have much for details.
Frankly, we still don’t know a lot but we’ll go with what we’ve got. So far we know about reductions in the New York, Chicago, Quad Cities, Florida and Seattle offices and everything we’ve been told indicates that they are occurring elsewhere.
First the Emerald City:
I was am ple. There is a new geographic restructuring going on. Instead of multiple “economic units” there will be only three regions. Many HRs and CFOs from different offices are losing their jobs. Consulting people talk about 100 positions that will be eliminated across the country. 10 people were let go from Seattle Economic Unit which includes Seattle, Tacoma, and Olympia offices. We were informed about the reorganization somewhere around 04/12 and laid off at the end of the month. I think everybody received severance.
We’re not that familiar with past cuts in the RSM/M&P world but the big cuts in consulting seem to trail the Big 4’s by a year or two, although if some of these smaller clients are giving into the Big 4 lowballing then perhaps this is the natural progression.
Their Florida Private Club operations group closed the Club IT Consulting Group and layed off the staff. Some of the staff have been part of the firm for more than 20 years and were profitable.
Chicago just layed off the Operations Consulting Staff yesterday, [approximately] 10 people. This group was left to dangle in the wind, sink or swim on their own without marketing or sales assistance or access to the firm’s client-base Naturally it failed.
This firm’s actual layoff numbers are always reported low because they chase people out prior to layoffs in an attempt to camouflage the numbers. Their tactics to accomplish this include poor performance evaluations for staff, unreasonable margin requirements, constant peer pressure meetings regarding performance and head to head comparisons. This creates a dysfunctional relationship between groups and actually motivates groups within their own company to compete with one and other. Only so much people can take and then they leave. Just what the firm wanted.
Considering the economy in Florida, the demise of RSM’s private club operations in that corner of the over-leveraged world wouldn’t come as much of surprise. That being said, you might expect that veterans of the firm would be accommodated somehow with other internal opportunities.
As far as the “chasing” this is Jack Welch’s magical forced ranking method that the Big 4 has accepted like its own creation.
We reached out to both RSM’s corporate spokeswoman and their general counsel, both of whom have not responded to our request for comment. We also contacted an H&R Block spokesman to see if they could elaborate on these layoffs from the parent company level but again, our requests have gone unanswered. H&RB had their own layoffs last month however, there is no indication at this point whether cuts at H&RB would have anything to do with those at RSM/M&P.
We’re still accumulating details on these cuts, so get in touch with us about details on your office or discuss below. And don’t be shy, we know you McGladrey types been hesitant to call on us in the past.
Layoff Watch: PwC
Editor’s note: Francine McKenna is a regular contributor for Going Concern
We’ve gotten reports of recent layoffs of over 100 professionals in the Advisory practice and 40 in U.S. IT. The IT professionals were out of the Tampa office, including some that were Lotus Notes developers. Right. We didn’t know anyone still used Lotus Notes either.
Sources indicate that this was more “forced ranking” layoffs as many were high performers that were dismissed because of suddenly ‘less than expected’ ratings. We’ve covered PwC’s less than clear approach in the past.
PwC has not immediately responded to our requests for comment.
We reached out to Francine McKenna, of Re: The Auditors and she provided this comment:
“PwC is the biggest abuser of the “forced ranking” approach, artificially downgrading folks to make them feel lousy, alone, and uncomfortable discussing or otherwise reacting to getting let go. They refuse to admit they are overstaffed because they would view it as a direct indication of their inability to manage effectively (notice I said manage, not lead).”
If you have more details on these layoffs, send us an email to our tips address and discuss in the comments.