Option 1- Forced Ranking Is the staff of your organization rated above average on performance appraisal systems? If not, the organization could be missing out on a proven business asset. Organizations with highly engaged employees are 89% more likely to attain higher customer satisfaction ratings as well as rank four times higher in revenue expansion when compared to firms employing the lowest rated staff (Goffee & Jones, 2013). Various appraisal formats are available for management’s use in identifying top performers such as the absolute, relative, and outcome formats among others. Some organizations have implemented the controversial performance appraisal system known as Forced Ranking.
Forced Ranking as a Performance Improvement Tool Although 25% of Fortune 500 firms use forced ranking, it is a tendentious business management tool in which annual evaluations are used to identify the organization’s highest and lowest performing
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In such a situation a relative rating system can result in problems in that differences between must be found between in order to assemble a rank order. In particular, one manager may have a standard for rating an employee “superior” which is totally different than another. Therefore, the same staff member could receive quite different ratings from different reviewers. An absolute rating system would avoid such a situation since each reviewer would be using objective criteria for the review (Duffy & Webber, 1974). Therefore, an absolute system may be a more fair evaluation method. As a manager I would prefer a more fair and equitable rating system such as an absolute system. This system allows for all staff to be evaluated using the same criteria. Moreover, an absolute system would appear to be less vulnerable to legal challenges than a relative system, which could financially benefit the organization by reducing or even eliminating legal fees associated with court challenges to performance