Is Our Forced Ranking System Still Valid?

Is Our Forced Ranking System Still Valid?

[Workforce Management | November 19, 2009]

Using a 'rank and yank' approach requires managers to differentiate performance, but also can have a negative effect on employee engagement. Consider a performance management system that requires managers to set clear performance expectations, defines what 'high performance' means, uses feedback as data, and features ongoing discussions around development.

Q: How is the economy affecting the use of forced ranking? Our company is trying to figure out whether we should use it to address some internal issues regarding performance and succession. Is there a recommended minimum number of employees against which a "forced" performance rating distribution should be applied? Alternatively, what other strategies could we use in place of forced ranking?

- Preventing Rank Performance, senior business analyst, financial services, New Orleans

A: It sounds like the economy is affecting your business and you're trying to get more from your employees - possibly even trying to find a way to help make decisions on eliminations. If you are not currently using forced ranking, don't start. There is a better way - better for you as a manager, better for your employees, and better for your organization.

Forced ranking systems are a part of the performance management landscape, whether you agree with them or not, but they should not be used as the only instrument for evaluating talent. Although the 'rank and yank' approach of forced ranking does require that managers differentiate performance, it can have a negative effect on employee engagement. Rather, it should be one tool in a sound performance management system, balanced by tools that uncover the symptoms behind underperformance. There is no guarantee you will end up with a workforce that embodies your corporate values or sustains high performance because of a genuine desire to contribute.

As you evaluate your talent, consider a performance management system that requires managers to set clear performance expectations, defines what "high performance" means, uses feedback as data, and features ongoing discussions around development. One of the challenges with forced ranking systems is that they don't always evaluate employees against the organization's defined standard for high performance.

Rather than starting off with the premise that some percentage of your workforce, which you have carefully selected through your hiring process, is inadequate and will never improve, consider this alternative. In direct contrast to forced ranking, managers who use a capacity-building approach understand that performance is not fixed.

In other words, most people can develop new skills and capabilities and learn to be highly effective through focused effort. To evaluate current performance and to build tomorrow's teams, capacity-building managers measure an employee's talents and passions against the needs of the organization. The aim is to gain better insight on who is the right fit for your organization, both now and in the future.

If your organization is already committed to a forced ranking system, incorporate the capacity-building approach into your ongoing development activities. This will help ensure that you will not lose valuable talent because their potential was overlooked. Raising the performance of all employees means that when you do have to cut, the remaining workforce is more capable of picking up the slack and has the desire to continue increase their contribution.

[Source: Cheryl Huddleston, senior consultant, Novations Group Inc., Boston, July 27, 2009]