Forced Ranking (Forced Distribution)
Forced ranking method in performance appraisal
1. Definition of forced ranking (forced distribution)
Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.
For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.
The top-ranked employees are considered “high-potential” employees and are often targeted for a more rapid career and leadership development programs.
In contrast, those ranked at the bottom are denied bonuses and pay increases. They may be given a probationary period to improve their performance.
2. Application of Forced Ranking
GE, Ford Motor, Conoco, Sun Microsystems, Cisco Systems, EDS, Enron and a host of other U.S. corporations have adopted similar policies of this method
3. Advantages and disadvantages of forced Ranking
Advantages:
• They force reluctant managers to make difficult decisions and identify the most and least talented members of the work group.
• They create and sustain a high performance culture in which the workforce continuously improves.
Disadvantages
• They increase unhealthy cut-throat competitiveness;
• They discourage collaboration and teamwork;
• They harm morale;
• They are legally suspect giving rise to age discrimination cases.
Categories: Compensation and Benefits, Performance Appraisal Methods, Performance management Tags:
Performance Appraisal Dictionary
Performance appraisal glossary / dictionary / terms
1. Performance appraisal: also known as employee appraisal, is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). Performance appraisal is a part of career development.
2. Paired Comparison Method: Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better Employee of the pair.
3. Forced Distribution Method: Similar to grading on a curve; predetermined percentages of ratees are placed in various categories.
4. Graphic Rating Scale: A scale that lists a number of traits and a range of performance for each. The employee is then rated by identifying the score that best describes his or her performance for each trait.
5. Alternation Ranking Method: Ranking employees from best to worst on a particular trait.
6. Critical Incident Method: Keeping a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing it with the employee at predetermined times.
7. Behaviorally Anchored Rating Scale (BARS): An appraisal method that aims at combining the benefits of narrative and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance.
8. Management By Objectives (MBO): Involves setting specific measurable goals with each employee and then periodically reviewing the progress made.
9. Unclear Performance Standards: An appraisal scale that is too open to interpretation; instead, include descriptive phrases that define each trait and what is meant by standards like “good” or “unsatisfactory.”
10. Halo Effect: In performance appraisal, the problem that occurs when a supervisor’s rating of a subordinate on one trait biases the rating of that person on other traits.
11. Central Tendency: A tendency to rate all employees the same way, avoiding the high and the low ratings.
12. Strictness / Leniency: The problem that occurs when a supervisor has a tendency to rate all subordinates either high or low.
13. Bias: The tendency to allow individual differences such as age, race, and sex to affect the appraisal rates these employees receive.
14. Appraisal Interviews: An interview in which the supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths.
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Categories: Appraisal Overview, Compensation and Benefits, Performance management Tags: Appraisal, Dictionary, Performance