How "ranking" of employees against one another helps, while making performance review.
We have a problem in ranking of employees. Our line management is not favourably inclined to do the "ranking" while top management insists for it.
We have following performance review process:
1) Setting performance goals, performance factors(competencies) and development objectives, at the beginning of financial year and reviewing employee performance quarterly;
2) At the time of annual review, all employees are appraised on a scale of 1-5 and, accordingly, rating is done;
However, we now want the line managers to rank the employees against one another and recommend the rank order list .
Line managers advocate that employees performance shall be appraised based on performance objectives set at the beginning of the year which are mutually agreed and each employee shall independently rated. However, ranking against one another is not based on an objective criteria as we benchmark a "best employee" and draw ranking. There are multiple reasons for an employee being "best" and the such multiple reasons cannot be same for all employees.
All my line management team is strongly against Ranking.
Please give your comments
DN Rao
From India, Hyderabad
We have a problem in ranking of employees. Our line management is not favourably inclined to do the "ranking" while top management insists for it.
We have following performance review process:
1) Setting performance goals, performance factors(competencies) and development objectives, at the beginning of financial year and reviewing employee performance quarterly;
2) At the time of annual review, all employees are appraised on a scale of 1-5 and, accordingly, rating is done;
However, we now want the line managers to rank the employees against one another and recommend the rank order list .
Line managers advocate that employees performance shall be appraised based on performance objectives set at the beginning of the year which are mutually agreed and each employee shall independently rated. However, ranking against one another is not based on an objective criteria as we benchmark a "best employee" and draw ranking. There are multiple reasons for an employee being "best" and the such multiple reasons cannot be same for all employees.
All my line management team is strongly against Ranking.
Please give your comments
DN Rao
From India, Hyderabad
Dear Mr Rao,
I suppose when you are talking about the rating then it should be forced ranking and the manager should try to Rank their employees accordingly. I think what one should tell the managers is that they are not ranking the employees as good or bad on a scale of 1-5. they are selecting the best of the lot and accordingly the ranking is done.
By doing this the mangers are helping to identify the top, middle and bottom performers.
.
Cheers!!
Faiz
From India, Bangalore
I suppose when you are talking about the rating then it should be forced ranking and the manager should try to Rank their employees accordingly. I think what one should tell the managers is that they are not ranking the employees as good or bad on a scale of 1-5. they are selecting the best of the lot and accordingly the ranking is done.
By doing this the mangers are helping to identify the top, middle and bottom performers.
.
Cheers!!
Faiz
From India, Bangalore
Dear DN
Why would you want do a "ranking" when you already have implemented a proper performance management system?
Your performance reveiw process and your line managers are on the right track but not your top management.
Seldom do I get to see line managers strongly advocating conducting performance review in this manner as many view it as a tedious and time-consuming process. Situation is make worst when managers are not trained to objectively appraise staff. This is a good practice and should continue.
If you are the HR in the company, you may have to "educate" your top management the pros and cons of both the PMS and ranking.
PMS if properly implemented will improve company-wide performance. Ranking will only redistribute the awards (e.g. annual increment & bonus) without performance improvement. Using ranking, "the rich gets richer"!
From PMS to go back to ranking is taking a step backwards!
Autumn Jane
From Singapore, Singapore
137Why would you want do a "ranking" when you already have implemented a proper performance management system?
Your performance reveiw process and your line managers are on the right track but not your top management.
Seldom do I get to see line managers strongly advocating conducting performance review in this manner as many view it as a tedious and time-consuming process. Situation is make worst when managers are not trained to objectively appraise staff. This is a good practice and should continue.
If you are the HR in the company, you may have to "educate" your top management the pros and cons of both the PMS and ranking.
PMS if properly implemented will improve company-wide performance. Ranking will only redistribute the awards (e.g. annual increment & bonus) without performance improvement. Using ranking, "the rich gets richer"!
From PMS to go back to ranking is taking a step backwards!
Autumn Jane
From Singapore, Singapore
The Top 10 Reasons Why 'Forced ranking' Quota Systems Don't Work
In recent years some industrial leaders and major corporations have advocated a system of "forced ranking and elimination" of an arbitrary percentage (often 10%) of the lowest performing employees every year. Not all organizational experts agree that this is an effective system. Some believe that it can lead to an attitude of fear, unwillingness to make mistakes, and to stifled creativity. Here are some of the counter-arguments to forced ranking, summarized from an article by Edward E. Lawler III in 'strategy + business.'
1. Legal problems
The system invites legal challenges, and many courts have supported these challenges. Few companies are able to prove to the satisfaction of the courts that their quota systems accurately identify poor performers.
2. The statistics don't work
The theory assumes a normal curve (large numbers of individuals around the middle, flanked by a few "top" and "bottom" performers on either side). In fact statistics relating to normal curves are usually attained only with thousands of individuals, and assume random placement. Few teams or departments have so many members, and one hopes that none place their employees randomly.
3. Inequity across departments
Some teams or departments may consist entirely of superlative performers, yet in this system the bottom 10% will still be cut, whereas another team may be composed largely of poor performers, 90% of whom will be retained.
4. Inequity within departments
Some teams may have many individuals with almost no differences in performance between them, yet supervisors are still forced to identify 10% for elimination. This can lead to charges of unfair treatment, and to lower morale.
5. Long-term damage to morale
If continued year after year, once the initially identified poor performers have been eliminated, who is to be eliminated next? Those who were previously identified as satisfactory? New hires who have not yet had time to get up to speed? When employees are in a state of constant fear they rarely do their best work.
6. Reduced teamwork
The system encourages an 'each person for him/herself' attitude, and discourages teamwork. It also discourages people from asking others for help or for needed training, for fear that this will make them vulnerable to being identified as poor performers.
7. High cost of turnover
Some or all of the employees who are eliminated will have to be replaced, with the resulting costs and uncertainties of hiring and training replacements, and lower productivity in their early months. In addition, employees who are eliminated must have benefits continued, and may bring lawsuits.
8. No incentive to encourage growth in employees
Although intended to encourage improved performance, an arbitrary ranking system provides little chance or time for workers to improve, or for managers to find another job or department in which an employee may fit, and therefore perform, better. The incentive is to retain them so that they may be fodder for the next 10% elimination process.
9. Delays in needed firings
Managers who know that they will need to identify employees for elimination in a few months may deliberately not fire individuals who should be fired immediately, just in order to fill their quota during the elimination period. This can be destructive to the organization and to the morale of other employees.
10. The rich get richer...
Managers do not want to invest time and effort in the development of poor performers who are likely to be eliminated in the near future. Therefore, instead of helping them to develop their skills they may often spend their time working with the better performers who actually need less help.
From Singapore, Singapore
In recent years some industrial leaders and major corporations have advocated a system of "forced ranking and elimination" of an arbitrary percentage (often 10%) of the lowest performing employees every year. Not all organizational experts agree that this is an effective system. Some believe that it can lead to an attitude of fear, unwillingness to make mistakes, and to stifled creativity. Here are some of the counter-arguments to forced ranking, summarized from an article by Edward E. Lawler III in 'strategy + business.'
1. Legal problems
The system invites legal challenges, and many courts have supported these challenges. Few companies are able to prove to the satisfaction of the courts that their quota systems accurately identify poor performers.
2. The statistics don't work
The theory assumes a normal curve (large numbers of individuals around the middle, flanked by a few "top" and "bottom" performers on either side). In fact statistics relating to normal curves are usually attained only with thousands of individuals, and assume random placement. Few teams or departments have so many members, and one hopes that none place their employees randomly.
3. Inequity across departments
Some teams or departments may consist entirely of superlative performers, yet in this system the bottom 10% will still be cut, whereas another team may be composed largely of poor performers, 90% of whom will be retained.
4. Inequity within departments
Some teams may have many individuals with almost no differences in performance between them, yet supervisors are still forced to identify 10% for elimination. This can lead to charges of unfair treatment, and to lower morale.
5. Long-term damage to morale
If continued year after year, once the initially identified poor performers have been eliminated, who is to be eliminated next? Those who were previously identified as satisfactory? New hires who have not yet had time to get up to speed? When employees are in a state of constant fear they rarely do their best work.
6. Reduced teamwork
The system encourages an 'each person for him/herself' attitude, and discourages teamwork. It also discourages people from asking others for help or for needed training, for fear that this will make them vulnerable to being identified as poor performers.
7. High cost of turnover
Some or all of the employees who are eliminated will have to be replaced, with the resulting costs and uncertainties of hiring and training replacements, and lower productivity in their early months. In addition, employees who are eliminated must have benefits continued, and may bring lawsuits.
8. No incentive to encourage growth in employees
Although intended to encourage improved performance, an arbitrary ranking system provides little chance or time for workers to improve, or for managers to find another job or department in which an employee may fit, and therefore perform, better. The incentive is to retain them so that they may be fodder for the next 10% elimination process.
9. Delays in needed firings
Managers who know that they will need to identify employees for elimination in a few months may deliberately not fire individuals who should be fired immediately, just in order to fill their quota during the elimination period. This can be destructive to the organization and to the morale of other employees.
10. The rich get richer...
Managers do not want to invest time and effort in the development of poor performers who are likely to be eliminated in the near future. Therefore, instead of helping them to develop their skills they may often spend their time working with the better performers who actually need less help.
From Singapore, Singapore
Please note that my earlier post re The Top 10 Reasons Why 'Forced ranking' Quota Systems Don't Work originally submitted by Diana Robinson, PhD., PCC, Personal Effectiveness Coach, <link no longer exists - removed> with a note
"Copyright 97, 98, 99, 00, 2001 CoachVille
Autumn Jane
From Singapore, Singapore
"Copyright 97, 98, 99, 00, 2001 CoachVille
Autumn Jane
From Singapore, Singapore
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Performance Review Form - KDCL for year 2010.xls
Performance Review 2008(employee Section).ppt
Performance Review Materials.doc