...Stack Ranking: Brilliant Management or Inherent Absurdity Ray Johnson MGMT E-4000 Organizational Behavior 1 August 2012 Abstract Employee stack ranking is a performance measurement system that requires every manager to rank its employees from excellent to poor. Stack ranking was popularized by Jack Welch at General Electric in the 1980’s. Since that time it has become a popular management technique. The use of stack ranking has many demonstrated successes, but many managers and business analysts are beginning to questions its value to an organization. In this paper I will examine from a critical perspective both the good and bad aspects of stack ranking in an attempt to determine its long term viability as an organization behavior. Stack Ranking: Brilliant Management or Inherent Absurdity Introduction Stack ranking, sometimes referred to as forced distribution, is a popular performance measurement (appraisal) tool. The concept behind stack ranking is to rank all employees within a given statistical set, all first line supervisors for example, from best to worst. In its most common iterations managers rank, or stack, workers into one of the three groups. The highest performing 20% (sometimes 10%) are ranked as top performers. This top tier group of employees is considered to be the future leaders of the company. They are rewarded with bonuses, raises, promotions stock options and other perks. The middle 70% of the group are considered to be “solid”...
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....Rob's boss, Sweetwater's president assigned him the first task of improving the performance appraisal system used to evaluate secretarial and clerical performance. In this case, the main difficulty is the performance appraisal which was directly tied to salary increases given at the end of the year. The graphic rating forms which were used to evaluate clerical staff were not efficient as these forms never gave the true evaluation of performance. So, to change the faulty performance appraisal system two Sweetwater experts gave their recommendations to solve the problem. The first recommendation was not to use graphic rating forms as this rating method did not provide any clear picture about the good or bad performance. The second recommendation was not to force administrators to arbitrarily rate at least half their secretaries as something less than excellent. The recommendations given by the experts were good and made sense but these recommendations created problems like efficacy of any graphic rating forms if it is compared to the original forced ranking approach used by Rob and what should be the basis of performance appraisal. ANALYSIS OF THE CASE: The job of Rob Winchester was to completely change the performance rating system of the university because the previous system was dealing with high staff turnover ratio and also the process didn’t look just. The initial performance appraisal form was filled by administrators. Administrators had to rate their secretaries on...
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... Comparing Co-Workers Against Each Other: Does This Motivate Employees? 1. What’s your opinion regarding forced ranking performance appraisals? Do they motivate employees? In my opinion, forced ranking performance appraisals can work for some companies, but not for everyone. For example, a company like GE or General Motors could possibly benefit from forced ranking performance appraisals because these companies are driven by efficiency and producing positive results for the bottom line. Since these companies employ hundreds of thousands of people, it’s important for them to efficiently weed out the underperformers while still maintaining the efficiency of the company. Companies, like advertising firms, who rely on a lot of innovation wouldn’t fair well in implementing forced ranking performance appraisals. When it comes to motivating employees, it’s a catch-22. If you have two employees who are in the bottom 10% of underperformers, one employee may use this as a motivation tool because their hierarchy of needs is being met and they enjoy their job. The other employee may not feel motivated because their hierarchy of needs isn’t met and the rating will only reflect their feelings towards their job. Bottom line, what motivates one may not motivate the other. 2. How would equity theory explain some employees’ negative reactions to forced rankings? Explain. The equity theory looks at a person’s perceptions on how fairly they’re treated during exchanges at work...
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...Employment of an effective, yet ethical, performance management process is critical to the long-term success of any organization. Indeed, it is perhaps the most vital function of thriving business leaders. Furthermore, the ability of a manager to develop and retain his/her talent is a direct reflection of his/her leadership skills. This paper will discuss the appraisal process utilized by the world's largest home-improvement retailer, The Home Depot concluding with recommendations for improvement. Commencing in 2004, the organization adopted a forced ranking performance appraisal system. Careful evaluation of this assessment process suggests that the compulsory classification of an arbitrary number of employees has resulted in several unintended consequences while raising ethical concerns. The following topics relative to the utilization of a forced distribution system have been evaluated. The proposed benefits of forced distribution. The impact of forced ranking on employees and managers. The results of a forced ranking model on employee retention. Application of ethical theory to the forced ranking model. SWOT Analysis. Conclusion. This review of the forced ranking methodology will assess the moral and ethical implications of the model. Additionally, it will evaluate the impact on the organization, as well as the individuals employed by the firm. The Proposed Benefits of Forced Distribution "Performance evaluation systems are one of the most pervasive...
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...Human Resource Management, 12e (Dessler) Chapter 9 Performance Management and Appraisal 1) Which of the following terms refers to the process of evaluating an employee's current and/or past performance relative to his or her performance standards? A) recruitment B) employee selection C) performance appraisal D) employee orientation E) organizational development Answer: C Explanation: Performance appraisal means evaluating an employee's current and/or past performance relative to his or her performance standards. Performance appraisal always involves setting work standards, assessing the employee's actual performance relative to those standards, and providing feedback to the employee. Diff: 1 Page Ref: 306 Chapter: 9 Objective: 1 Skill: Concept 2) The primary purpose of providing employees with feedback during a performance appraisal is to motivate employees to ________. A) apply for managerial positions B) remove any performance deficiencies C) revise their performance standards D) enroll in work-related training programs E) change their peer evaluation procedures Answer: B Explanation: The purpose of providing feedback to the employee is to motivate him or her to eliminate performance deficiencies or to continue to perform above par. Diff: 2 Page Ref: 306 Chapter: 9 Objective: 1 Skill: Concept 3) Which of the following is NOT one of the recommended guidelines for setting effective employee goals? A) assigning specific goals B) assigning measurable goals C) assigning...
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...Appraisal Case Rank and Yank at General Electrics Forced ranking is a performance appraisal system popularized by Jack Welch when he was CEO of General Electric. It was a system that has been the derogatory label of “rank and yank” by its critics. The intend of the forced-ranking system is to improve the performance level of an operation by getting rid of the bottom 10 percent of performers and hiring replacements who will perform at a high level. Ranking judgments can be made in a variety of ways. For example, a forced distribution can pre-assign a set of percentage of employees that must be placed into categories such as “most effective”, ”average” and “needs improvement”. Alternatively, a simple ranking of workers from best to worst can be used. Top performers may be rewarded and offered promotion or training. Low performers may be given a warning or terminated. Forced ranking has been employed by a number of companies, but some legal challenges have been made. For example, Microsoft successfully defended several discrimination suits challenging its use of a forced ranking system. Ford Motors campany implemented a forced ranking system in January 2000 and ended up paying an award of 10.5 million dollars as a result of class action suits charging that the system has a disparate impact on some subgroups of employees. Ford has since shelved its forceranking system. Overall however, there have been relatively few legal challenges to the forced-ranking system...
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...Question 1. What's your opinion regarding forced ranking performance appraisals? Do they motivate employees? Explain. I believe forced ranking performance appraisals can be motivating for some employees and not motivating for others. Individuals with strong high-order needs who know that they will be ranked come appraisal time will strive and perform in order to achieve the highest rank possible. Other individuals with weak high-order needs might not strive for a high rank. I believe these individuals might even perform below their ability because of perceptions (i.e. "why should I work harder because so and so will get a higher rank than me anyway"). Even though I have consistently ranked high whenever evaluated under a forced ranked system in the past, I personally do not like forced ranked performance appraisals and believe they can cause an organization more harm and be less productive because of the system. I served in the U.S. Navy from 1994 until 1999. During that time I was evaluated annually by my superior(s) in a quasi forced ranked performance appraisal system. At that time in the Navy there were three evaluation marks a sailor could receive: Promotable (average), Must Promote (above average) and Early Promote (Outstanding). The evaluation one would receive weighed heavily on the sailor's likelihood of being promoted to the next rank/pay grade at the next promotion cycle, which also occurred annually several months after the evaluations were given....
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...[pic] ASSIGNMENT: PERFORMANCE APPRAISAL METHOD Performance Appraisal Method Critical Incident Method Definition: This format of performance appraisal is a method which is involved identifying and describing specific incidents where employees did something really well or that needs improving during their performance period. Critical incident is a method used for many sectors. An incident is critical when it illustrates what the employers has done or failed to do. The critical incidents for performance appraisal are a method in which the manager writes down positive and negative performance behavior of employees throughout the performance period. Each employee will be evaluated as such and one’s performance appraisal will be based on the logs that are put in the evaluation form. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. The critical incidents file of performance appraisal is a form of documentation that reflects all data about employee performances. Most frequently, the critical incidents technique of evaluation is applied to evaluate the performance of superiors rather than of peers of subordinates. Disadvantages of Critical Incident This method suffers however from the following limitations: • Critical...
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...Abstract This paper will discuss will discuss rating system that judge employees on job performance. The rating systems that will discuss in this paper are the following: forced-ranking, absolute-rating and relative-rating system. The author will discuss weather forced ranking is a good performance management system, the different between the absolute-rating and relative-rating systems, an what would the author rely on as a rating system and can a absolute-rating system be devise that would guarantee differentiation among workers, Rank & Yank: Legitimate Performance Improvement Tool Or Ruthless and Unfair Management 1. Do you think forced ranking is a good performance management system? Why or Why not. The forced ranking system is not a good performance management system because it’s been proven to discriminate against workers, it fails to promote inclusiveness and teamwork among workers, and it is costly because it increases employee turnover. According to Gomez “the intent of the forced-ranking system is to improve the performance level of an operation by getting rid of the bottom ten percent of performers and hiring replacements that will perform at a higher level” (p. 231). Forced ranking has been employed by a number of companies but some legal challenges have been made (Gomez-Mejia, Balkin, & Cardy, 2007). For example, a lawsuit contends that Microsoft’s grading system is discriminatory. A class-action suit brought on behalf of African Americans and women states...
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...employee’s current and/or past performance relative to his or her performance standards is called ________. • employee selection • recruitment • performance appraisal • organizational development 2. The “S” in the acronym for SMART goals stands for ________. • straightforward • specific • strategic • support 3. Who is the primary person responsible for doing the actual appraising of an employee’sperformance? • the EEO contact person • the company appraiser • the employee’s direct supervisor • None of the above. 4. Because in most organizations there is a hierarchy of goals, employee performance standardsshould ________. • make sense in terms of the broader organizational goals • be standard • be decided by the top executive • All of the above. 5. Besides the supervisor, which of the following is available to managers as an alternative sourceof performance appraisal information? • the employee • rating committees • peers • All of the above. 6. Suppose you have five employees to rate. You make a chart of all possible pairs of employees for each trait being evaluate Then, you indicate the better employee of the pair for each pair. Finally, you add up the number of positives for each employee. In this case, you have used the________ method of performance appraisal. • forced distribution • alternation ranking • paired comparison • graphic ranking scale 7. To protect against bias claims when using the forced distribution method, employers...
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...Methods of Performance Appraisal BBA (day) Course Code: 602 Course Title Submitted by Assoc.prof. Md.Rafiqul Islam Faculty of business studies Dhaka international university Prepared By Mahbub Alam Roll:-43 Reg:-241063 Batch:-33/A BBA (day) Session:-2010-2011 Human resource management Page 1 Methods of Performance Appraisal A. Concept B. What performance Appraisal? C. About Performance Appraisal D. The performance Appraisal process. E. Objectives of Performance Appraisal. F. The Four Phases. G. Method of Performance Appraisal. i. ii. Past Oriented Methods Future Oriented Methods 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Rating Scales: Checklist: Forced Choice Method: Forced Distribution Method: Critical Incidents Method: Behaviorally Anchored Rating Scales: Field Review Method: Performance Tests & Observations: Confidential Records: Essay Method Cost Accounting Method: Comparative Evaluation Method (Ranking & Paired Comparisons): i. Ranking Methods ii. Paired Comparison Methods H. Formula Of Performance Appraisal I. Conclusion Human resource management Page 2 Methods of Performance Appraisal C ONCEPT Agencies are required by the Government Performance and Results Act of 1993 to establish program goals and report organizational performance to stakeholders, including the Office of Management and Budget and the Congress. This creates pressure to use methods that improve organizational performance and maximize goal achievement. Using...
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...opinion regarding forced ranking performance appraisals? Do they motivate employees? Explain. While at first I would somewhat agree with forced ranking performance appraisals, from a management and leadership perspective in order to assess who deserves merit for recognition, pay raises and promotions. But from an employees’ point of view, it can be very demotivating if one finds themselves at the lower end of the spectrum. Instrumentality may be negative and affect overall job security and satisfaction. Individuals may not perceive the forced ranking system as fair when being compared to their coworkers and inputs may vary from person to person. Overall, I feel that forced ranking does not motivate employees as there are a variety of factors to include that may each weigh differently (i.e. job experience, EI, reliability, productivity, quality, etc.). 2. How would equity theory explain some employees’ negative reactions to forced rankings? Explain. The equity theory explains some employees’ negative reactions from forced rankings by changing an employees’ inputs, how much effort to invest into their current job. The attitudes or mindsets of employees’ may change, that job security is more important than a raise. Or, the employee may just decide to resign from their current job position due to annoyance or perceived inequalities. The equity theory centers on overall pay as the outcome. 3. Based on Chapter 5, if you decided not to use forced rankings at your company...
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...ASSIGNMENT ON PERFORMANCE APPRAISAL SYSTEM MBA HRM ASSIGNMENT COMPARATIVE METHOD METHODS OF PERFORMANCE APPRAISAL Once the employees has been selected, trained and motivated, he is then apprised for his performance. Performance appraisal is the step where the management finds out how effective it has been hiring and placing employees. If any problem is identified, steps are taken to communicate with the employees and to remedy them. So “so a performance appraisal is a process of evaluating an employees performance of a job in terms of its requirement “ Several methods and techniques of appraisal are available for measurement of the performance of the employee. The methods and scales differ for obvious reason. First they differ in sources of traits and qualities to be apprised. The quality may differ because of difference in job requirements. Second they differ because of different kinds of workers who are being rated .third the variation may be caused by the degree of precision attempted in an evaluation. Finally they differ because of the method used to obtain weighting for various traits. The performance appraisal method is divided into three categories these are Trait-based method Behavioral method Comparative method Result oriented method The part concerned with me is the comparative methods There are so many methods which are include in comparative method but the most important and most popular are...
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...PERFORMANCE APPRAISAL Performance appraisal is assessment of how staff members are doing his job. Employee performance is the product of three underlying factors, i.e. ability, motivation and environment. Any defect in any of the three will impair his performance. It is quiet natural for a subordinate wanting to know what is supervisor thinks of his/her work. Performance appraisal is the evaluation of work done (quantity, quality and the manner it is carried out.) during a specified period against the background of the total work situation. DEFINITION: Performance appraisal of an employee refers to an evaluation of employee’s performance. OBJECTIVES: * To provide an opportunity for reflection and feedback on work performance and the work environment for a given period of time between an employee and supervisor. * To acknowledge and encourage appropriate and above standard performance. * To identify and remove distracters, dissatisfies and obstacles as well as ineffective behaviors. * To identify areas of growth for employees and organizations. * To provide data for management decisions concerning merits, increments, incentives, rewards, promotion, transfer, demotion or discharge from service. * To create a desirable culture and tradition in the department. * To meet the requirement for manpower planning and organizational development like identification of employees with promotion potential and developmental needs – what is expected of them...
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...Performance Appraisals Part I: Importance of Performance Appraisals Defining Performance Appraisals Performance appraisals serve to measure how an employee performs against the standards established by the company. Performance appraisals evaluate an employee’s current or past performance and compare them to his or her performance standards. For an appraisal process to be efficient, should include setting work standards, evaluating the employee’s actual performance and comparing it to the set standards, providing timely feedback to the employee in hopes that performance deficiencies are corrected, improve, or continue above expectations. Performance appraisals can sometimes be perceived as a nightmare and a waste time for supervisors and employees, as well. Sadly, performance appraisals are rarely perceived as management tools as for many corporations employees appraisals are nothing more than annual appointments to determine salary increases. However, when considering the actual objectives of a performance appraisal one can realize that it leads to beneficial consequences that relate to pay awards, potential talent identification, and widens organizational employees’ development perspectives. In addition, a performance appraisal provides that particular working occupation-persons match and mismatch is identified by looking into the actual and potential problem areas. In simpler terms, performance appraisals should be regarded as a management tool that serves to strength...
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