Case Summary

Forced ranking is a system of measuring performance promoted by Jack Welch during his reign as the CEO of General Electric. This system intends to improve employee performance by terminating the lowest ten percent of performers and recruiting new substitutes to perform the tasks at an improved level. In this system, grading judgments are done through several distinct ways, and the top performers may be rewarded through training sessions and promotions while low performers may be given warnings or job terminations. The appraisal system has been implemented by several companies such as Microsoft, Ford Motor Company and Conoco (Gomez-Mejia, 2016). The primary advantage associated with this system is the ability to frequently trim the lowest performances hence regularly raising the performance standard and creating a group of excellent performers. The ranking system also has various disadvantages such as creating competitiveness instead of collaborative culture among the employees. Additionally, regular termination of low performing employees may lead to a lack of continuity in the workplace groups. It may also force the employees to target more of performance at the expense of work ethics.