Achieving Goals_ Define and Surpass Your High Performance Goals - Kathleen Schienle [22]
The BIG Picture
FORCED DISTRIBUTION AND LEGAL PROBLEMS
Forced performance rankings, or forced distribution—a brainchild of Jack Welch, former CEO of General Electric—gained momentum as a performance evaluation tool in the late 1990s. Forced distribution requires managers to assign a fixed percentage of their employees into distinct categories, such as “excellent,” “acceptable,” and “needs improvement.” Those in the top category received the highest compensation and promotions. Those in the bottom ranking were likely to be denied increased compensation or promotion and were first in line to be laid off.
During its heyday, one in five large companies adopted forced distribution. Within this system, formerly valued employees who had never had a questionable performance review found themselves at the bottom of departmental rankings—or out the door. Many in that situation were older, experienced workers who had built solid reputations in progressively more responsible roles. As a result, several large corporations ended up settling class-action claims in which former workers charged that disproportionate numbers of employees of a particular gender, age group, or racial designation had been fired.
SOURCE: “Forced Ranking and Age-Related Employment Discrimination” by Tom Osborne and Laurie A. McCann, Human Rights Magazine (Spring 2004).
Still, even those who accept the need for performance evaluations are wary of subjectivity or unfairness. As a result, some companies have devised alternative systems, some based on ranking or comparison, and others on assessments of the employee from many sources.
Paired comparison ranking systems involve pairing each employee with every other person on the team and designating the better performer in each pairing. Forced distribution, also known as “the curve” or “rank and yank,” rates employees on the same type of curve used in classroom-grading systems. Many companies who climbed enthusiastically onto the forced-distribution bandwagon have jumped off, most notably Microsoft, where managers now put fixed percentages of individuals into categories that rate their potential to advance.
In the Roundtable method, members of one department or division discuss the employees in the group and their performance for the past evaluation period. They apply a curve and distribute the salary, bonuses, and promotions on the basis of the discussion.
Far more revealing are 360-degree reviews, which require observations from everyone who works with the individual, including supervisors, peers, direct reports, and even customers. This method helps the employees understand how others perceive their performance.
Plan B
360 DEGREES
Many employees believe the “360-degree feedback” method of evaluation paints a more accurate picture of their performance than feedback from their manager alone. A well-planned, well-managed 360-degree feedback process can be effective, but be aware of the pros and cons:
Pros
Information is supplied by multiple sources and perspectives rather than from a single individual.
Personal and organizational performance are integrated.
Risk of discrimination is reduced, since feedback comes from varied sources.
Customer service improves when feedback is solicited from internal or external customers.
Cons
Compensation, promotions, and job longevity may be based on amateurs’ assessments.
Many supervisors have unrealistic expectations of 360-degree feedback.
Because 360-degree reviews are often anonymous, there is no way to follow up for more information.
Reviewers are not always objective and may focus on negatives or boost ratings to make someone look good.
Paperwork