(Cooper & Argyris, 1998) In this system, managers rank workers into three categories, which are top 20%, middle 70% or bottom 10%. The top 20% top performers are given pay raises, training and stock options who will lead the company's future. The middle 70% backbone employees are given small raises and encouraged to improve who are steady eddies. The bottom 10% employees are given no raises, bonuses nor training, or even fired who contributed the least and did not meet the expectation. (Pawan Alamchandani, 2014).
Force ranking approach in Microsoft is done by assessment of managers who are one or two level above the employees towards the performance criteria that required to fulfill by employees being evaluated. Under this appraisal approach, employees will be assigned a raking within a range of 1 to 5 based on their overall performance, versus multiple metrics. Ranking 1 indicates top performers while ranking 5 indicates worst performers. Each ranking level is limited to a fix number of employees only. Ranking will be based upon relevant peer groups and linked directly to compensation. This ranking system is known as considered as 5 point scale system.
There is a contradiction between forced ranking is a good practice and force ranking poisons the performance and appraisal system. There are a few advantages of force ranking system which help organization in smoothing performance appraisal system. Firstly, forced ranking system facilitates more candid and open communication between managers and employees to provide a full, clear and realistic image to employees related to their exact ability and to know their room of improvement. Former General Electric CEO Jack Welch said, the most cruel management approach is failed to expose the employees' real situation to them. (Abraham, et al., 2013) Forced ranking is able to bring disciplined rigor to the management process. Obviously, it is easier to avoid difficult conversations related to performance than to confront them.
