Forced ranking

Meaning & Definition

Forced Ranking involves a ranking or performance evaluation of employees based on comparisons to fellow employees rather than against fixed standards of performance. As a result, the manager classified employees into levels of performance, including high, average, and low performers. The primary purpose of the Forced Ranking system is to assist management in identifying talent, implementing performance management strategies through the use of rewards (bonuses) and developing the overall effectiveness of employees within the organization.

Important features of Forced Ranking 

• Facilitates recognition of high and low performers through teams.
• Assists with reward & recognition via performance metrics, including performance-based compensation.
• Promotes a competitive performance culture within businesses.
• Supports talent management and succession planning process.
• Offers a framework of structured performance differentiation used by HR to make decisions.

Legal & Regulatory Considerations 

There are no specific statutes that address the use of forced ranking; however, employers have an obligation to implement performance appraisal systems in a manner that is fair, non-discriminatory, and compliant with all other internal HR policies to prevent conflict in the workplace.