Forced Ranking Performance Appraisal Method– Is it really required?

The recent media update about Yahoo’s Marissa Mayer’s plan to introduce Forced Ranking method of appraising employee performance has raised quite a brow. While there has been a lot of criticism from some corners, there definitely will be some in silent acceptance. Before I make my case, let me give you some insights into forced ranking performance appraisal method. 

Forced ranking (FR) is a performance intervention, which can be defined as an evaluation method of forced distribution, where managers are required to distribute ratings for those being evaluated, into a pre-specified performance distribution ranking (Cooper & Argyris, 1998). In theory, each ranking will improve the quality of the workforce. Managers rank workers into three categories: The top 20 percent are the "A" players, the people who will lead the future of the company. They're given raises, stock options, and training. The middle 70 percent are the "B" players, steady-eddies who are given smaller raises and encouraged to improve. The bottom 10 percent are the "C" players, who contribute the least and may be meeting expectations but are simply "good" on a team of "greats." They're given no raises or bonuses and are either offered training, asked if they'd be happier elsewhere, or fired. As many as one-third of Fortune 500 companies use such systems, says Dick Grote, author of "Forced Ranking: Making Performance Management Work." Forced ranking first gained attention at General Electric in the 1980s. This is amongst the oldest methods and was aimed at –

·         End manager tyranny on ranking employees equal thus being unfair to the high performers or deserving members.

·         It was in vogue in those days when Talent Acquisition was still Recruitment and HR as Personnel Management.

While we have successfully made a transition from Personnel Management to HR Management to SHRM and have the best of the breed information systems, social medial tools and techniques, forced ranking still finds its presence. Many from the classical school of thought would contest that we need to go the Jack Welch way and differentiate amongst high and low performers and chuck out the non-performers.

I have always observed – “How did the non-performers or low performers find a way into the system?” or “If they were fine at the time of entry, have we investigated the reasons for deteriorating performance?” This calls for a tightly integrated HR function where Talent Acquisition is coupled with Performance management & Talent Management/Engagement. This is where we actually create & deliver value for our organizations as Strategic Business Partners. The late Steve Jobs at Apple Computers built a team of A-Class players as he would believe that only A-class members can appreciate the work of other A-class players.

Coming back to Forced Ranking method, it ‘may’ work in a highly structured or process oriented organization such as GE while may not at Apple or Google or Pixar or at our organization – May-I Consultants. This is seen to have detrimental effect on risk taking and thereby innovations as members tend to play safe. Moreover, why do you even need such a setup when your focus is on building an A-class team right from your strategists to hiring managers?

So what to do?

·         Instead have your performance managers define role-specific strategic KRAs and aligned KPIs integrated with the organization’s business strategy.

·         Set the motivations right.

·         Appraise your members on the set KRAs and drive your achievement goals.

·        Don’t shy away from giving instant feedback and associated corrective action.

·         Plan appropriate Action Learning Programs before taking the exit route.

·         You don’t need Forced Ranking Method.

I rest my case.

Visit us at www.mayiconsult.com and get in touch with us for your HR & Management consulting needs.

Closure - An Important aspect of Talent Acquisition Process

Look at the image above for 5 seconds.

Now, analyse what your mind was at while looking at the incomplete circle - Was it trying to make the ends meet or join? I am sure, most of us would get the ends meet. This is what psychologists call 'Closure' and human brains are wired to attain closure.

Recently, I came across individuals and bright ones for that matter who didn’t have very high opinion of some of the very good and known brands to work for.  The reason – “Apply, Apply but no Reply”. Many organizations, I know of, have a very good hiring process for the chosen ones or for individuals who swim across various stages of the selection process. The candidates definitely have a feel-good experience and they talk highly about it. However, not many organizations have a pleasant way of showing the red signal.

Organizations world-wide spend a great deal on ‘Employer Branding’ exercise in an attempt to lure the best available in the talent market. Even with available metrics it is extremely difficult for the organizations to justify the cost-benefit of these dollars. As many would put it – “We have high online virality of our company updates” or “We are the most talked about” or “We are the most searched for”. However, living with these incomplete notions and defining employer branding only till that is flawed. Each and every touch point matters while creating and leaving an impression.

The big question to ask is “How many of us have a feel good experience for the applicants throughout our hiring process?” Closure is an important part of human nature. We all desire closure and don’t want to have dangling situations. The dangling aspects act like a baggage and constantly nag our mind. I am sure each one of us early in our careers would have sent our resumes or emails asking on a probable opening/vacancy at a particular organization. Our reactions to revert and non-reverts would have been at the opposite ends of the ‘feel-good’ continuum; sometimes leaving a bitter feeling and at other times feeling courteous towards the organization.

A revert or a reply for closure may seem pithy and we may not pay much attention but to the applicant it may leave a pleasant impression and who knows your Talent Acquisition team may be bombarded with referrals by the non-selected candidates. Your TAT may create opportunities galore, creating a large pool of candidates.

A small action may reap huge benefits. Just Think. So have you mandated a closure for each application received by your TAT? If not, what are you waiting for?

Visit us at www.mayiconsult.com