1. What is Forced Ranking?

Forced ranking is a performance management system in which employees are evaluated relative to one another, typically grouping them into top, average, and low performers. This method aims to identify high achievers, highlight areas for improvement, and inform decisions on promotions, rewards, or development needs.

2. Why is Forced Ranking Used?

Organizations use forced ranking to recognize high performers for rewards, career growth, and development opportunities, while identifying low performers for targeted improvement plans or, in some cases, termination. This system helps optimize talent management, enhance overall workforce performance, and align employee contributions with organizational goals.

3. How Forced Ranking Works

• Employees are compared against peers
  
• Fixed percentages assigned to performance categories
  
• Results influence promotions, bonuses, or layoffs
  

4. Example of Forced Ranking in Practice

A company ranks 20% of employees as top performers, 70% as average, and 10% as low performers, with the lowest group receiving performance improvement plans.

5. Pros and Cons of Forced Ranking

Pros: Encourages high performance, helps with talent management.
Cons: Can create competition, lower morale, and teamwork issues.

6. Related HR Terms

• Performance Management
  
• 360-Degree Feedback
  
• Employee Engagement
  

7. FAQs About Forced Ranking

Q1. Is forced ranking still widely used?
Some companies use it, but many have moved to other methods.

Q2. How does forced ranking affect morale?
It can harm morale if perceived as unfair.

Q3. Can forced ranking be biased?
Yes, if not managed carefully.

Q4. Are employees informed about their ranking?
Usually, during performance reviews.

Q5. What alternatives exist to forced ranking?
Continuous feedback and goal-based evaluations.