It’s one of the least engaging aspects of a modern economy: the mania to quantify and rank the performance of individuals, departments or whole organisations.
According to Giacomo Livan, author of a study in the journal Royal Society Open Science: “Rankings send out powerful signals, which lead to identify the actions of top performers as the ‘best practices’ that others should also adopt.”
Many of us have given in to “adopt and adapt” at some point in our careers, and not always comfortably.
You’re sitting in front of a manager for an annual review, thinking: well, how’s this going to work? The manager in question is universally regarded as average, but he’s the one that gets to rate you, and the shortest path to a better ranking is probably to follow his advice.
Such thoughts have finally been given voice by Livan, whose research suggests that ranking performance reduces meritocracy.
Livan created a numerical model to represent a society in which people seek to climb a ranking either by imitating the actions of top performers or by randomly trying out different actions – in other words by chance, or serendipity.
The model showed that imitating top performers increases the society’s welfare overall, but at the cost of higher inequality.
Livan reports that the imitation of top performers turns out to be a self-defeating strategy that serves to consolidate the early advantage of a few lucky – and not necessarily talented – winners, leading to a very unequal, homogenised and effectively non-meritocratic society.
Conversely, he says, serendipity favours meritocratic outcomes and prevents rankings from freezing.
“The model’s strength lies precisely in the clarity and simplicity of the assumptions made, and in the fact that these are enough to generate rich dynamics which qualitatively resemble real-world observations,” Livan writes in his concluding remarks.
“Hopefully the model presented in this paper will contribute to reflect on the importance that we collectively place on rankings, and on the unintended consequences they may have on our societies.”