Pros and Cons of Forced Distribution

1.) What are the pros and cons of forced-distribution and forced-ranking systems?

Pros:
a.) Forced-distribution systems are a way to help match company and employee performance with compensation
b.) A forced-distribution system also helps managers tailor development activities to employees based on their performance.
c.) The use of a forced-distribution system is a way for companies to increase performance, motivate employees, and open the door for new talent to join the company in place of poor performers.

Cons:
a.) Their use of the systems has sometimes generated lawsuits and negative publicity and triggered poor employee morale.
b.) Poor performers receive no salary increase, and average performers receive smaller increases than are given to top performers.
c.) Forced-distribution asks managers to differentiate between good, average and poor performers, a distinction many managers find difficult to make.
d.) The systems have been difficult to implement, and companies have gotten into trouble.
e.) The system took too much time and energy, and managers were focused on the appraisal instead of improving employee performance.
f.) The system was also used to deny employee raises.
g.) The forced-ranking system targeted older employees and not poor performers.
2.) Suppose Ford, Goodyear or Dow Chemical contracted with you to modify its performance management system to avoid some of the problems it has experienced. What would you suggest the company to do?

Ford, Goodyear, or Dow Chemical should focus more on improving the performance of their employees rather than taking too much time and energy in performance appraisal. The companies should get to know their employees better to attain good judgment for them, and the judgment must be based on the criteria being set by the company to avoid bias in judgment. It must be clear and easy to implement to avoid conflict. And the rating of the employees could be more accurate.

Another problem is that they are targeting older employees rather than poor performing employees. When older employees has more value than the latter ones because the older employees have much, much more experience rather than the poor performing one's, which could help the company attain a better and more successful future. It is unfair for the older ones to be laid off from their work just because of their age. It must also be based on their performance. So the poor performers must be the ones to be laid off rather than the older ones. And, also, the experienced ones contribute more on achieving the organizations over-all goal rather than the poor perform so, in our conclusion the company should not, at all costs, remove the older employees for they are like the diamonds of the company.

And another problem is that their system was also used to deny employees their raises. Companies should never deny employees of their right to a raise in salary. Because if ever the company does deny their raise, it could result in a severe decrease in the morale of their employees. This could lead to a downfall of the company in the long run.

3.) What advantages will your ideas have over the company’s current system? How will you measure the success of your ideas?

Our ideas will grant advantages like being able to help the employees to improve their performance and to be more motivated to do their best in their work, to avoid biases in judgments of companies on their employees and to bring fairness in rating their performances, to bring clarity in every decision the company has made, to enhance good employee relations inside the company, and to reduce the trouble of implementing the system appropriate for the employees.