Imagine youâ€™re the VP of Human resources for a Fortunate 100 company. Youâ€™ve spent your entire career attempting to enhance the workplace for employees to support their productive work in the organization. While you understand that bottom-line decisions often dominate many of the matters you have to address. You have worked hard to ensure that the employees were treated with respect and dignity in all interactions that affected them. You aligned the hiring process to serve the strategic needs of the organization, as well as implemented an effective performance management system. You truly believe in the progress youâ€™ve made in helping the organization achieve its goals. You simply couldnâ€™t imagine doing things differently. However, concern that the performance management process is becoming less effective because managers are inflating employee ratings has led 15 percent of all large organizations to adjust their performance management to what is frequently called â€œrank and yankâ€. Under such a system, managers are evaluated as 1, 2, 3 or 4, with 1 being the highest rating and 4 the lowest. In many cases, managers are required to give a 4 rating to the lowest 10 percent of employees each year. Those individuals receiving a rating of 4 for two consecutive years are often let go from the organization.
The intent behind this system is that the throughout the two year process, evaluators are to meet frequently with the four employees, counsel them and provide necessary development opportunities. Employees in organizations that employ such a performance management system often view this process unbearable. They view the performance management process as punitive, one in which the organization is attempting to rid itself of higher-paid older workers. In at least one case, Ford Motor Company employees have filed a lawsuit to stop this practiceÂÂÂÂÂÂÂâ€”and prevailed .Ford removed the punitive nature of its evaluation systemâ€”and focused it more on counselling and performance improvement of the lowest-rated employees rather than elimination from the organization.
Source: Textbook- DeCenzo, D. A., & Robbins, S. P. (2013). Human resource management