I recently spoke with a potential client about this; I’ve shared some of my thoughts here before on the topic, but figured it could be time for a repeat…
Forced ranking, as a methodology for managing and improving performance, is neither good nor bad… it’s just another method. Used as part of an integrated process, it can be very powerful.
The problems we see with things like this are contextual; we here about some successful company — GE, Yahoo, Sun, EDS come to mind — using this, and ask, “Can we do that here?” The answer, of course, is “Yes, provided you bring the entire process that makes it work.”
To implement forced rankings without the process and structure to support it — management development, career pathing, internal coaching & mentoring, multiple opportunities for assignments — is truly a recipe for failure.
It’s like organizations that read Welch’s book, and immediately think how smart it would be to whack the bottom 10% of performers each year… only to discover the results weren’t nearly as successful. It’s because Welch did that as part of an extensive employee development process; by the time a bottom-feeder got whacked, s/he’d been given myriad opportunities, development efforts, and still came up wanting.
So, as a component of a total strategy, Forced Rankings can be an excellent tool for performance improvement; the best can see what their “competition” looks like, in a manner of speaking. As a non-contextual program, however, it will likely crash and burn.
But that’s just me…