There is another problem with stack ranking -- I saw this at a previous employer: some people are hired into "4s and 5s" from the onset. I heard some hiring managers upset that they would have to force rank their hand-selected elite team into 1-5 ranks, and upset at the situation, they purposefully hired weak workers with the intention of slotting them into 4 and 5 ranks. Their argument was (i dont agree):

- these weak workers wouldnt otherwise have a job

- these weak workers get an extra year of employment they "dont deserve"

- the strong team members get the 1,2,3 ranks they deserve

- the hiring manager is "forced" to do this

All that said, seems incredibly unfair to hire people directly into the chopping block without the expectation set from the start.

Wow, that sounds awful.

It's a losing situation all around, between the company not getting what it intended (firing the pre-existing dead weight, and getting rid of scapegoats) and, of course, the employees who are duped into joining just to be fired later.

Which companies do this?

It’s an oxymoron.. ‘we only hire the best and stack rank the rest’.