Forced ranking systems, also known as forced distribution or rank-and-yank systems, have been used by many organizations as a way to evaluate employee performance.
This system requires managers to rank their employees from top to bottom performers and then reward or punish them accordingly.
However, this system has a negative impact on employees and can be detrimental to their motivation, morale, and productivity.
Forced ranking systems are based on the assumption that there is a fixed number of high performers, average performers, and low performers in any given team. However, this is not always the case, and many employees can fall into the category of average performers, even though they are doing a great job.
Forced ranking systems can be unfair to employees because they create an artificial competition where employees are pitted against each other.
This can lead to negative consequences such as resentment, lack of collaboration, and even sabotage among team members.
Forced ranking systems are usually dependent on one manager's subjective opinion and are often conducted once a year. This can lead to inconsistent and biased evaluations that do not accurately reflect the employee's performance throughout the year.
Managers may have (un)conscious personal biases, preferences, or prejudices that can influence their ranking decisions, and employees may be penalized for factors that are beyond their control.
Forced ranking systems focus on identifying and rewarding the top performers, while ignoring the rest of the employees who may be doing a good job but not at the same level as the top performers.
This can create a demotivating environment where employees feel undervalued, unappreciated, and stuck in their current role.
Moreover, forced ranking systems do not provide meaningful feedback or development opportunities for employees to improve their performance and skills.
As an example, imagine that you are a customer service representative working for a company that uses a forced ranking system. You have been working for the company for two years, and you have received positive feedback from your customers and colleagues.
However, you have not been ranked as a top performer because your numbers are not as high as those of your colleagues who are in the top ranking.
You feel stuck in your current role, and you are not sure how to improve your performance in a system that does not provide development opportunities or feedback.
So, what can companies do to ensure that their performance evaluation systems are fair, accurate, and promote employee growth and development?
One alternative to forced ranking is a system that focuses on continuous feedback and coaching. This approach involves regular check-ins between managers and employees throughout the year to discuss performance, set goals, and offer support and guidance.
With this type of system, managers can identify areas for improvement and offer coaching and resources to help employees grow and develop in their roles. This ongoing feedback also allows employees to address issues in real-time, rather than waiting until the end of the year for a formal evaluation.
Moreover, it allows for a more personalized approach to performance evaluation, taking into account the unique strengths and challenges of each employee.
Forced ranking systems have a negative impact on employees and can be detrimental to their motivation. These systems create an artificial competition among employees, lead to inconsistent and biased evaluations, and deprive employees of meaningful feedback and development opportunities.
Instead, a continuous feedback and coaching approach, such as WorkStory, offers a more comprehensive and supportive way to evaluate employee performance, rather than pitting employees against each other in a forced ranking system.
By fostering a culture of growth and development, companies can create a more engaged and motivated workforce, leading to better business outcomes for all.
