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While grading employees on a scale relative to each other forces a hard look at finding keepers, losers may become weepers.
Forced ranking, the controversial process by which employees are graded against each other instead of judged against performance standards, is all the rage in corporate America. Experts estimate that it is being used by at least 20 percent of Fortune 1,000 companies and growing, fueled in part by pressures to identify large numbers of people who can be laid off as the economy stumbles along. (ProQuest Information & Learning ... denotes non-USASCII text omitted.) But many executives, consultants, academics and HR professionals are raising red flags about the practice, which has resulted in costly litigation, bad publicity and plunging morale at some firms where forced ranking has not worked well or has achieved a purpose at a steep price. (ProQuest Information & Learning ... denotes non-USASCII text omitted.) Also known as forced distribution and, derisively, as "rank and yank:' the practice was championed by former General Electric CEO Jack Welch, who insisted that GE identi5r and remove the bottom 10 percent of the workforce every year. (ProQuest Information & Learning ... denotes non-USASCII text omitted.) In practice, it takes several forms. A group of 100 workers can be ranked one through 100. More commonly, employees are grouped into three, four or five "baskets' usually of unequal size, indicating the best workers, the worst and one or more classifications in between. [right angle bracket]
Proponents say that forced ranking is the best way to identify the high-potential employees who should be given training, promotions and financial incentives. In addition, they claim it's a vital tool to identify the bottom performers who should be helped up or out. Some say forced ranking is not only the best method, but an essential practice to turn a struggling company into a market-dominating one.
Critics say the practice can be arbitrary, unfair, illegal, a morale killer and death to teamwork. They point out that one group of workers might have 20 percent dead wood while another might have nothing but stars, yet the process might mandate eliminating 10 percent from each group anyway.
"Sometimes managers are forced to identify poor performers even though they don't have data which...