| Each year managers conduct employee performance appraisals, sometimes using forced ranking performance management (forced ranking) to rank employees from best to worst. Managers use forced ranking to help identify high-potential employees, help make difficult decisions related to reductions in force, remove underperforming employees, and help in deciding the allocation of pay and incentives. Assessing the extent to which use of forced ranking performance management systems for a performance appraisal is related to a decline in employee productivity, performance, and morale was explored in this investigation. The quantitative research method and design was employed by the use of an Internet survey (49 items, alpha = .954), targeted to the population of interest, 5000 potential respondents from various businesses and professions. Of the eligible sample, 360 respondents provided usable quantitative and qualitative data. Descriptive and inferential statistics were used to examine the results of the investigation, and to compare the results with those of previous studies, for example, Becker, 1995; Novations Group, 2004; Steel, 2003. Based on the current study results, there is no evidence that performance or productivity is negatively correlated with the use of forced ranking, contradicting findings from previous studies. No relationship between performance rank and performance after a receipt of the performance ranking in 2005, &khgr;2(6, N = 203) = 11.963, p = .063, or 2004, &khgr;2(6, N = 200) = 6.291, p = .391 was indicated. A relationship between performance rank and productivity after a receipt of the 2005 performance ranking, &khgr;2(6, N = 204) = 15.820, p = .015 and 2004 performance ranking, &khgr;2(6, N = 201) = 18.573, p = .005 was found. Observed was a relationship between performance rank and morale after a receipt of the 2005 performance ranking &khgr;2(6, N = 204) = 28.001, p = .000 and 2004 performance ranking, &khgr; 2(6, N = 201) = 15.621, p = .016. Results reported here, when used in combination with previous studies and literature could help to close the gap of misunderstanding about forced ranking performance management systems between the empirical data and opinion. |
