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Forced Ranking

HR Magazine, Nov, 2005 by Leigh Rivenbark

Forced Ranking

By Dick Grote, Harvard Business School Press, 2005

256 pages, List price: $35, ISBN: 1-59139-748-0

Forced ranking--rating employee performance relative to how peers perform, rather than just against a set of formal standards--is so controversial that when Dick Grote researched this book, he found that many employers wouldn't discuss how, or even whether, they use forced ranking.

The controversy arises, Grote says in Forced Banking, because many employees and managers maintain that rating people in direct comparison to co-workers is unfair and subjective and seems to "pit people against each other."

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But Grote advocates forced ranking as a possible antidote to inflated performance reviews and the tendency of managers to lump everyone into a "fully satisfactory" mass. Most performance appraisal systems leave top performers feeling unrecognized and employees complaining that employers don't deal with poor performers, he adds. But forced ranking, especially if it includes steps to terminate the lowest-ranking employees, can yield real improvements in performance, Grote says.

Forced ranking systems sort employees into groups, such as a top 20 percent of performers, a middle 70 percent and the lowest 10 percent--those employees at greatest risk of losing their jobs. Grote says nearly every organization that uses forced ranking also uses a separate performance appraisal system and that forced ranking should be a short-term measure until other talent management measures replace it.

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Grote, chairman and CEO of Grote Consulting Corp. in Dallas, aims to help readers set up forced ranking systems, starting with an audit to determine if forced ranking is right for the organization.

Companies that use forced ranking must decide which employees will be subject to it--usually those in top positions--and must establish the criteria that will be applied in ranking employees against one another. Other decisions to be made include who will do the ranking, what to communicate about forced ranking to those involved and how to use the results--to develop "up or out plans," for example, or to set pay.

Grote discusses how to train the people who will assess employees' relative performance. A primer on forced ranking sessions looks at how to prepare, how to get discussion started, the risks of taking notes, the use of external facilitators and other ideas.

Buy the Book

This book can be purchased through the SHRMStore online. Members receive a discount off the list price. Visit www.shrm.org/shrmstore and search for item number 48.43537.

Business Services Industry

Forced Ranking

HR Magazine, Nov, 2005 by Leigh Rivenbark

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