Firing the Bottom Performers Makes the Survivors Less Cooperative

Some companies rank their employees against each other and fire the lowest-ranked share every cycle. The practice is known as rank-and-yank. It is meant to keep the workforce sharp. A new study finds that it also changes how the survivors treat each other, and not for the better.

The research is by Kyle Mao, Assistant Professor of Accounting at the McCoy College of Business at Texas State University, with Eric Cardella of Texas Tech University and Tamar Kugler of the University of Arizona. It appears in the Journal of Economic Psychology.

The study

The researchers ran two experiments. In the first, every participant began by doing a real-effort work task. Pay was set up as a tournament, so each person’s earnings depended on how they ranked against the group.

Then the design split. In a baseline group, everyone continued to a second stage. In the rank-and-yank group, the lowest-ranked participants were removed. Only the top-ranked survivors continued.

In the second stage, participants played a series of interactive decision games. Each game is a standard way to measure a form of other-regarding behavior. That term covers how much people give to others, cooperate with them, trust them, act in a trustworthy way, and whether they try to harm them. The games included measures of altruism, cooperation, trust and trustworthiness, and sabotage.

The second experiment repeated the setup and looked for the reasons behind the results.

What the researchers found

Rank-and-yank did what its supporters claim. Participants in that condition worked harder on the initial task than those in the baseline group. Short-term productivity went up.

The survivors then behaved differently toward others. Compared with the baseline group, they gave less to others, cooperated less, and showed less trust and less trustworthiness. They were also more likely to engage in sabotage. Each of these effects pointed the same way: less regard for other people after living through the cut.

The second experiment points to a reason. Survivors came to see other people differently. They judged others as less concerned with anyone but themselves, more entitled, and more likely to have cheated to earn their performance rank. Having survived a contest with real losers, they assumed the worst about everyone else in the contest.

What it means for managers

The results describe a trade-off that most performance systems do not put on the ledger. The gain from rank-and-yank shows up quickly and is easy to measure. The cost shows up later, in behaviors that rarely appear on a dashboard: whether people share information, help a struggling colleague, or quietly undermine one.

For firms that run on individual output with little interdependence, the trade may still be worth it. For firms that rely on teams, cross-unit cooperation, or trust between employees and managers, the study suggests caution. The people who remain after a forced-ranking layoff are the ones the company chose to keep. This research suggests they may be less willing to cooperate than before.

The findings also matter for how firms talk about such systems. Survivors in the study assumed their peers had cheated. A ranking process that employees see as fair and hard to game may limit that suspicion, though the study does not test this directly.

The experiments used laboratory tasks and decision games rather than employees in a real firm. That design allows clean comparisons but leaves open how large the effects are in practice.

This summary is based on the paper’s abstract. The full article reports the data, methods, and detailed results.

What it means for managers

• Rank-and-yank buys productivity now at the cost of cooperation later. Survivors of the cut gave less, cooperated less, trusted less, and sabotaged more than employees who were not subjected to it.
• The damage runs through beliefs about coworkers. Survivors assumed their peers were more selfish, more entitled, and more likely to have cheated to earn their rank.
• If your business depends on teamwork, trust, or knowledge sharing, the hidden cost of forced-ranking layoffs may outweigh the output gain. Measure both before adopting the system.

Cardella, E., Kugler, T., & Mao, Z. (2026). Spillover effects from competitive rank-and-yank systems on employees' other-regarding behavior. Journal of Economic Psychology, 115, 102919. 10.1016/j.joep.2026.102919