Forced Rankings and Forced Distributions

Forced Rankings and Forced Distributions

            The application of forced-ranking and forced-distribution systems has caused a lot of commotion in major companies before. Workers have been fired, lawsuits have been filed, but still there are still some companies that continue to follow this management system. Despite the positive aspects of a forced ranking or distribution system, there are also a lot of negative points into it. Weighing these two against each other, many companies found that it was better to stop following these systems to avoid further losses.

            One of the positive aspects of forced ranking and distribution systems is that it drives its employees to become more competitive, to become more productive (Lawler). This is to avoid falling in the poor end of the ranking and distribution, where they would receive no bonuses or have the possibility to get fired. This increases the performance level of the employees and serves as their motivation to work. As for the companies, they are assured of new talents to join their company in place of the poor performers that gets fired. But would these truly be effective for the company? If you weigh this with the negative aspects, you may find out otherwise. Forced ranking and distribution systems don’t serve as a motivation for employees, instead it is considered by some to be a threat. It leaves no room for employee improvement, since if an employee’s performance falls into the poor category; then they get the boot. There is also no clear definition of a top, middle, or bottom performers. This endangers everyone, even the top performers of the previous year could be booted out the next year. This also encourages individuality, instead of cooperation among the employees. They are forced to compete with fellow works to save themselves from falling into the poor performers. If this is the case, the quality of products of the company are being jeopardized, since they are all to busy proving that they are better than the other, for fear of getting laid off the next time.

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            For the companies like Ford, Goodyear, or Dow Chemicals, they can improve their company performance and avoid the problems that the forced ranking and distribution system has brought them by modifying these systems. Ranking systems would really improve company performance, but the fact that the poor performers gets booted off would bring fear instead of motivation. That’s the part that should be eliminated first. What they should do first is to clearly define what they expect for the employee’s performance, and then provides an evaluation of the workers. It would be on the grounds of good performance, satisfactory performance, and needs improvement. Those falling in the needs improvement don’t mean that they have their necks on the line; it’s more of a probationary state, where their productivity is carefully monitored. This system doesn’t force a percentage to fall into poor performers, instead tally them according to how well they really performed. All the employees can be evaluated as good performers, and none can be classified in the “needs improvement” part. This evaluation serves as a guide that employees should follow, instead of a threat that they should fear.

Reference:

Lawler, Edward E. "The Folly of Forced Ranking".  2002. July 9 2007. <http://www.strategy-business.com/press/16635507/20290>.

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