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Forced distribution performance appraisal

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I. Contents of getting forced distribution performance


appraisal
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Each performance management process has rules for managers and employees. One of the most
criticized and controversial rule in many systems is the forced distribution (also called stacked
ranking). Many organizations introduce the forced distribution because they want to reach the
visible differentiation among the performance of employees in the entire business. GE in the era
of Jack Welsh was the most famous user of forced distribution. GE was limiting each category,
and it required managers to act on top and low performers. Today, most companies do not use the
strict forced ranking, but they have at least limits on certain performance categories. The
companies do not want to have the organization full of excellent employees if the business is
underperforming.
Forced Distribution of Performance RatingsRanking of employees is the emotional part for
managers. HR Managers do enjoy many discussions about the unfairness of the process for
employees and managers. The system pushes managers to choose an employee, who is unlucky
and his or her performance appraisal is needs improvement. No one makes any complaints
about the requirement to choose the employee, who is better than the others.
Benefits of the Forced Distribution
The forced ranking has many benefits for the large organization. All costs are under a control.
HR can make an exact estimate of the development because it knows the limits. The system sets
the limits for managers. No exceptions are allowed.

The system makes differences among employees. The top players (A players) enjoy many
benefits. Their careers are quick; their bonuses are high; they enjoy salary increases. They enjoy
benefits at costs of other employees, who are not lucky to be "A players".
The system can produce a healthy pressure on employees. They are required to increase their
performance. The "A" players have to develop their skills and competencies to stay at the top
level. The employees clearly see that managers act on low performers in the team. It is a
motivation for the rest to work hard.
Weaknesses of the Forced Distribution
The forced distribution can kill innovations in the organization. The employees do not focus on
being innovative; they focus on being visible in the organization. The manager has to be
informed about every step. The organization is full of presentations and status reports. Nobody
reads them and follows. However, the reports and presentations exist, because they have to exist.
No deliverables, no excellent performance rating.
The forced ranking usually depends on the visibility of the employee in the organization. The
employee, who join many important meetings, has a higher chance to receive the excellent
rating. Some people learn to live in the matrix quickly. They are always seen as stars, but they
have no real results to prove it.
The forced distribution usually stops working after few cycles. The low performers are out of the
organization, and the manager has to choose new low performers. The manager starts to rotate
the low performance ranking or starts to protect the last low performer in the team. The same
situation happens to "A players". The manager is worried to rank the A player as the B player.
The forced ranking can have a destroying impact on the friendliness of the corporate culture.
Employees do not cooperate; they protect their ideas and do not share them with others. The
team without inspiring discussion is not a functioning team.
Summary
Each HR leader should do a quick evaluation of the performance management system used in the
organization. The forced distribution can help in the moment, when the organization has to make
a quick turn-around. However, it should not be in place for a long time. It stops working.
The organizations focused on innovations should leave the forced distribution as soon as
possible. They should utilize other modern ways of providing instant and quick feedback to
employees. The forced ranking and innovation cannot exist at one place.
If your organization runs the forced distribution performance model for a long time, you should
consider if inputs to other strategic HR processes are still valid.

==================

III. Performance appraisal methods

1. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales


statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale

Rating scales consists of several numerical scales


representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
employee.
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
traits.
This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of


employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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