Opinion divided on system's merits

"The whole idea of rank and yank is moderately appalling and violates all kinds of principles of effective human resource management," says Marie Wilson, associate professor of management at the University of Auckland.

"No one's good at everything. And it's terrible at getting people to cooperate."

She says ranking "is based on two premises - the law of large numbers, and random effects. If you hire randomly and manage randomly, performance should be distributed randomly.

"If you hire and develop people well they should all be performing well."

Wilson describes systems using matrices or ranking as a fad that pops up regularly in different places.

But Right Management Consultants' Peter Swanson says ranking "is a very effective way of turning around quickly an organisation that is floundering.

"It creates a sense of keenness and motivation that lifts performance across the board through motivating better individual performance, and weeding out the anchors that are holding a business back."

But it's not a good call with lean or small businesses, he adds.

There is one area in which ranking is legitimate, according to law professor and Employment Tribunal judge Bill Hodge, and that's in determining value in a situation where redundancies must be made.