Please read the following case study and answer the 5 questions
that follow.

Case Study: Rank and Yank: Legitimate Performance Improvement
Tool or Ruthless and Unethical Management?

Forced ranking is a performance appraisal system popularized by
Jack Welch when he was CEO of General Electric. It is a system that
has been given the derogatory label of “rank and yank” by its
critics. The intent of the forced-ranking system is of the bottom
10 percent of performers and hiring replacements who will perform
at a high level. Ranking judgments can be made in a variety of
ways. For example, a force distribution into categories such as
“most effective,” “average,” and “needs improvement.”
Alternatively, a simple ranking of workers from best to worst can
be used. Top performers may be rewarded and offered promotion or
training. Low performers may be given a warning or terminated.

               
Forced ranking has been employed by a number of companies, but some
legal challenges have been made. For example Microsoft successfully
defended several discrimination suits challenging its use of a
force-ranking system. Conoco used a forced-ranking system and
reached on out-of-court settlement in a discrimination
lawsuit.   Ford Motor Company implemented a
forced-ranking system in January 2000 and ended up paying an award
of $10.5 million as a result of class action suits charging that
system had a disparate impact on subgroups of employees. Ford has
since shelved its forced-ranking system. Overall, however, there
have been relatively few legal challenges to the forced-ranking
system. It remains a controversial management practice.

               
A potential downside of forced ranking is increased competitiveness
among workers. Under a forced-ranking system, workers can become
less focused on common or collaborative tasks. Instead, workers
might focus on their individual performance and ranking. The net
result can be less teamwork and a negative effect on
productivity.

Critical Thinking Questions

1. Do you think forced ranking is a good performance management
system? Why or why not?

2. Part of the forced-ranking label reflects the intent to force
distinction among work performance levels. In an absolute-rating
system, everyone could be rated “above average.” Does this
difference between the absolute and relative-rating approaches mean
that the absolute performance judgments are wrong? Explain

3. As a manger, would you prefer to rely on an absolute
performance rating system or a relative system, such as forced
ranking? Why?

4. Can you devise an absolute-ranking system that would
guarantee differentiation among workers? Why or why not?

5. Elaborate on two key learnings from the case related to
performance management, appraisals, and the validity and reliable
of various methods. Be sure to clearly state the two key learnings
and defend them in well-organized, scholarly responses.