Why ranking employees by performance backfires

The ‘forced distribution’ model used by many companies is an outdated idea that should be scrapped

06 April 2021 - 20:13 By Sarah O’Connor

When Bill Michael, the former chair of KPMG, told staff to “stop moaning” in a virtual meeting in February, one of the issues they were complaining about was the “forced distribution” model used to assess their performance. This way of appraising people is a zombie idea. No matter how many times it proves disastrous for a company’s culture or morale, it refuses to die.

Generally speaking, “forced distribution” or “stack ranking” methods divide employees each year into a certain percentage of top performers, average performers and underperformers. In the UK’s senior civil service, for example, the proportions were fixed at 25, 65 and 10% respectively, until the system was reformed in 2019...

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