Comparing Co-Workers Against Each Other: Does This Motivate Employees?

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Case 5.1: Comparing co-workers against each other: Does this motivate employees?

This case takes a critical look at using comparative methods to review and evaluate employees and exposes the impact of those methods on productivity and morale. "Forced Ranking" had occurred for many years at GE, instigated by the famed ex-CEO Jack Welch who had managers categorize their reports into three categories: the top 20 percent, the middle 70 percent, and the bottom 10 percent. This process has been shown to work well for about two years because it eliminates the least productive workers and strengthens the core team. After two years the benefits decline since the core team has now become stronger and eliminating the weakest links are no longer critical. After two years, the cut-throat mentality starts to take hold and employees know that they must portray themselves in the best possible light while playing up any negative factors about coworkers to help reinforce their positions. This behavior discourages innovation and leads to infighting as well as avoidance to risks which stagnates the company from growth and new ideas. This case goes on to look at best practices and techniques used by Yahoo who "made substantial changes to its rating system which compared employees' performance to an absolute standard rather to each other" (Ivancevich, Kinopaske, Matteson, 2008, p.135)

My opinion on forced ranking is that it works to motivate employees up to a point. It also introduces negativity into the evaluation process that may permanently scar the team members who stay behind. If employees start slamming each other to protect their jobs, it can get ugly and after the dust settles, the remaining team members must still work together but negative actions won't be forgotten. It could lead to less trust within the team which hurts morale and productivity over the long run.

I believe that forced ranking should be introduced sparingly in instances where upper management...
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