When companies properly acknowledge and reward employees, they build a motivated workforce.  But what do we do with employees who do not meet performance expectations?  Even more controversial, how do we handle employees who rank in the top tier of one workgroup, but fall short in a more talented peer group?

In an ideal world, managers can avoid the efficiency drain of a performance assessment process and just rank everyone appropriately for salary treatment.  The reality is that inequity and favoritism corrupt this ideally efficient process.  Of course, we are only human.  

The end result is this bureaucratic system of performance ranking.  Different companies apply the underlying principles to varying degrees, but I’ve observed noticeable trends in employee satisfaction that result from the differing methods.  Companies that put more thought into performance ranking structure have happier employees than those that blindly follow a formula.  I note a clearly logical statement, but it is amazing how many companies hold to outdated systems. 

To one extent or another, forced ranking systems will always have pitfalls.  The question is how effective can your company capture the benefits of forced ranking while minimizing the cons.  Some of the questionable outcomes include:

Some or all of the consequences above may apply to your company’s ranking process.  If you find that more than 3 of the factors apply to your organization, you may consider tweaking the process to shift employee satisfaction.

While many positive factors suggest a need for forced ranking, this type of assessment process does come with its setbacks.  Managers in this system should listen to the feedback to improve process effectiveness.  I urge those in the RL community to share your stories so that we can all learn from positive and negative experiences.