Forced ranking – the process of assessing, identifying and potentially eliminating a percentage of the lowest performing employees each year – is on the rise. Promoted by many – most notably GE’s Jack Welch as a way to increase organizational performance over time, the practice has come under scrutiny recently. Two studies cast doubt on the long term benefits of the practice.
In the first study of 200 seasoned HR professionals, released last summer1, researchers gathered “…some startling findings around the perceived negative repercussions from forced ranking systems, such as reduced productivity, inequity and skepticism, negative effect on retention, and a detrimental impact to the bottom-line.”
The second study, done by researchers at Drake University2 used a computer model to simulate the performance improvement gained over a 30 year horizon by organizations using forced ranking systems. While they found an initial “bump” of a respectable 16% in the first two years, this quickly tailed off to a negligible 1% by the 10th year.
In the short-term forced ranking appears to create a high performance culture; focusing on staffing with the best of the best. However, this occurs at the cost of reducing other behaviors that contribute to innovation and risk taking; communication and collaboration. “Hard fun” needs to be located in the content of the work, not the politics of survival to benefit both the individual and the organization.
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1 to read the press release about the study go to http://www.novations.com/novations/go/rainbow/4045/en/DesktopDefault.aspx You can also request a copy of the complete study there.
2 to read a brief article about the study go to
