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Chapter 5 (Case 5.1: Comparing co-workers against each other:

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Business

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Case Study Ananlysis

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Brief summary of the case study
Business environment is dynamic and competitive; so in order to survive the only thing that
holds truth is performance. Given case study discusses the importance of force ranking and
performance analysis. Every year end the performance review is conducted by organizations to
evaluate employee’s position. However, due to the forced ranking system employee might fall in
a particular category which might be wrong and lead to job loss to the candidate.
Initially many companies like GE, Yahoo! and even American Airlines have also adopted this
strategy but now they are becoming more flexible because they are being highly criticized
because of their way of evaluating employees (Boehale, 2008). Companies are now
implementing innovative techniques to evaluate their employees, so that better retention can be
done and also ensure better brand management.
Impact of force ranking method and it effect on employees
This employee ranking system helps the organization to arrange their employees in a scale from
good to bad and is an annual affair. The most common practice is that, the managers gerenally
group the employees in three basic categories they are around seventy percent are mediocre, two
percent of the employees are top performers and remaining ten percent are at the bottom level
(Luthans, 2012).
Major advantage of this technique is that, it is easy way of identifing the top performers and
retaining them while removing the non performers. This also helps the organization to develop
their best performers and make them business leader (Robbins, Judge, & Sanghi, 2013). The
technique also help the management quickly identify the top performers and use it for planning
succession.

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Though it has some pros but the negative effects are much higher; as employees might get highly
demotivated as it does not provide an indepth analysis of the employee performance, which give
rise to unhealthy competitions and in in team based organization it is not at a healthy practice as
it effects the team productivity and adversing effects empoloyee relationship with each other. The
employees does not like to take risk and will never sick for help in these type of a ranking system
in any organization. So, though it may help the organization to quicken on their appraisal but
adversely effect the iorganization’s internal enivironment (Lam & Yik, 2002).
Negative reaction of enployees towards force ranking during appraisal
(Equity Theory)
In 1963 John Stacey Adams proposed the Equity Theory which says that delicate and changeable
factors affects an employee’s estimation and sensitivity towards their work and their employer
(Delpo, 2005). The theroy said that the employees may become demotivated towards their work
and the employers if the they feel that their inputs are more than the outputs (Robbins, Judge, &
Sanghi, 2013). The theory suggests that the management and the manager should find a balance
between the inputs and the outputs while giving feedback for employees. So, the theory
indirectly hints that the forced ranking system is not a very well accepted method of grading
employees based on their performance (Luthans, 2012).

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Anonymous
I was struggling with this subject, and this helped me a ton!

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