The forced distribution or stacked ranking is not the natural component of the performance management system. It was introduced to highlight differences among employees. It was introduced to act on low performers. It could be in place for few years. But... Today, many organizations kill innovations by not eliminating the forced ranking. Why?

1. Forced
Distribution
How can the Performance
Management block
Innovations?
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2. Executive Summary
The forced distribution is the most controversial rule in the Performance Management
process. The managers cannot evaluate freely, they have to follow strict differentiation
rules. Primarily, it was introduced to drive the differentiation among employees.
However, it usually results in differentiation among visible and less-visible employees.
The forced distribution of performance ratings allows the organization to differentiate
among employees, allocating training budgets to top performers. The promotions
should be allowed just to top performers. However ...
Today, the key growth driver is innovation. The forced distribution cannot coexist with
innovation successfully. The innovative employees usually do not rank best. The
employees, who are visible to the management, usually rank best. The innovative
employees take risks, they have many failures. They think about products and services.
The innovative company cannot use the forced distribution for the performance
appraisals. It should also consider the total elimination of the formal performance
management process.
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3. Content
• About creative HRM
• What is the forced distribution?
• Benefits of Forced Distribution
• Weaknesses of Forced Distribution
• Forced Distribution and Innovation
• Download
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4. About creative HRM

5. About
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6. Forced Ranking

7. Appraisal Ranking Distribution
• Organization sets clear and strict
guidelines for managers how the expected
distribution of performance ranking
should look (forced distribution, forced
ranking or stacked ranking) 60 %
• Managers cannot rate employees freely,
they have to meet the forced distribution
• Organization runs calibrations on a
company level to reach the internal equity
No Investment Talent Development
•
Act on low performers Training Sessions
Better performing teams can get the Salary Increases
Higher bonuses
advantage over low performing teams in 15 % 15 %
the distribution
5 % 5 %
•
Unsatisfactory Improvement Needed Meets Expectations Exceeds Expectations Superior
The organization invests into the
development of the best top rankings and
acts on the lower rankings
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8. Who uses forced ranking?
• The key users are multinational companies, which need to drive and
manage the performance management process globally
• They require consistent and comparable results of performance appraisals
as the HQ is able to plan international career paths of top talents
• The forced ranking changes the environment in the organization. The
employees become more competitive and focused on the delivery of results
(or being visible)
• The large organization runs the difficult calibration process as all managers
meet the rating requirements
• The forced distribution allows to identify the top players who will lead the
company in the future. It is aimed to secure the position of the company on
the market
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9. Benefits

10. Key Benefits of Forced Rankings
• The forced distribution is a simple and consistent
methodology. All managers understand the principles.
• The employees are clearly divided into different groups and
HR can target training courses, development programs for
talents and manage the salary review process.
• The forced distribution does not allow the inflation of good
and excellent performance ratings. The managers are
required to act on low performers.
• The low performance are given the individual plan to increase
their performance. They are required to meet the
performance standards.
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11. Weaknesses

12. Weaknesses of Forced Ranking
• Quotas can push the excellent employees down just because the
manager needs to meet the distribution curve
• The strong manager can lift the distribution curve for his or her
department
• The calibration does not depend on results achieved; it strongly
depends on the visibility of the employee among others
• Forced distribution can limit creativity, risk taking; it can weaken the
ethics and negatively impact the corporate culture
• The teamwork can be negatively impacted by the forced
distribution; employees do not want to share ideas
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13. Innovation and Rankings

14. Innovation//Forced Ranking
Innovation Forced Distribution
• Unblock creativity • Be visible to your boss
• Support teamwork and the boss of the boss
• Inspire and get inspired • Join all strategic
by others initiatives
• Cross your • Present results of the
responsibilities team
• Open and honest • Sell yourself
discussion required • Report your progress
• No results delivered on regularly
a daily basis • Focus on networking
• Less presenting, more • Be careful in making
thinking decisions
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15. What does innovation need?
• Innovation creates the open and supportive corporate culture. The
forced distribution is not compatible with the supportive
environment. Innovation is not about the competitiveness; it requires
employees to collaborate.
• Innovative employees require different performance management
system. It has to be based on the instant feedback. The overall yearly
performance evaluation does not support their creativity.
• Innovative organization is about less presentations and it is more
about innovative experiments. It is about some successes and many
failures.
• The forced distribution manages costs of the company; innovation
drives sales revenues and profitability.
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16. What is next?

17. Your next steps?
• Do you need to drive innovations in your company? You should
leave the forced distribution as soon as possible. It is tough
managerial decision, but it is worth it.
• How to evaluate the performance of employees? Check all
possibilities for saying the immediate feedback. There are many
online services focused on the instant feedback and “thank-you”
available.
• Do you need to manage your cost carefully? You should stay with
the rigid performance management system. It is the best tool for the
management of costs.
• Do I identify my talents? That is the excellent question.
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Forced Distribution of Performance Ratings
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