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Is Post-Appraisal Weeding Good Strategy?

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“Is Post-Appraisal Weeding good strategy?” Dilip Thosar Paper for The International Research Conference on HRM 25-26 August 2012 at MIT College of Management, Pune

Is Post-Appraisal Weeding good strategy?
Dilip Thosar Fellow Student, AHRD (Academy of Human Resources Development), Ahmedabad. ABSTRACT Many progressive Indian organizations are seen to annually lead a practice of weeding out their lowest-performing manpower, with the strategic intent of increasing their performance capability and competence. The genesis of this practice lies in the “20-70-10 principle” which states that the top 20% of workforce is productive, 70% work adequately and the remaining bottom 10% do not deliver and should be fired. During the annual appraisal, the head of every business team within the organization is asked to classify his/her team-members into top, medium and bottom performers. Those in the bottom bucket are asked to resign. This reportedly creates tremendous dissonance and unhappiness across the organization. There seems to be no evidence of the expected theoretical result of a continuously improving highperforming business unit. Even short-run competence is not reported to increase perceptibly. Notable is the expensive attrition and erosion of precious employee-engagement among residuals, with consequent burn-outs and reduced productivity. The significant negative outcomes of this practice seem to outweigh any positive potential. Literature studied and industry leaders decry it as inappropriate. Yet, paradoxically, it is followed in many progressive organizations. Why would organizations waste resources on a process that is detrimental to their own strategy? To understand the practice and the factors behind this apparent paradox, existing literature was studied and HR/Operations leaders were interviewed, and the qualitative content garnered was collated. This paper

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