Applied to employees, the rankings are used to determine pay, future career development, or even whether or not they are let go. At GE, for example, supervisors identify the top 20 per cent and the bottom 10 per cent. Jobs for those at the bottom may not be long lived. Apart from GE, other companies using the system include Ford, Microsoft, Conoco, Cisco Systems, Hewlett-Packard, and others. Companies using this approach argue that forced grading makes appraisal systems more objective and the distinction between performing and non-performing employees clearer.
Employees beg to differ.
A number of suits have been filed against companies alleging that the system is unfair, biased, and likely to reflect the personal prejudices of managers and supervisors. With a downturn in full swing in the US and potentially huge layoffs around the corner, forced ranking, whether overt or covert, is set to increase. For a start, forced grading is statistically based. The normal distribution of an attribute of a population, for example intelligence, is represented by a bell curve, with the great mass in the middle and two tails of around five percent at either extreme. However, this only holds good for fairly large statistical samples.