Chapter
25
Performance Management
341
developmental focus of the meeting, which is all
important. This is particularly the case if the rating
governs performance- or contribution-pay increases.
Another problem is that managers may inflate
ratings to avoid confrontation with the individuals
concerned. Some organizations (8 per cent of the
respondents to the performance management
survey conducted by Armstrong and Baron (2004))
attempted to counter this by using forced distribu-
tion, which requires conforming to a laid down
distribution of ratings between different levels, for
example: A = 5 per cent, B = 15 per cent, C = 60 per
cent, D = 15 per cent and E = 5 per cent. This
achieves consistency of a sort but managers and
staff rightly resent being forced into this sort of
straitjacket.
An alternative to forced distribution is forced
ranking. It is most common in the United States
where the outcome is sometimes known as a ‘vital-
ity curve’. Managers are required to place their staff
in order from best to worst. The problem with
forced ranking, as with forced distribution, is that
the notion of performance may not be defined and
is therefore not measurable. In the case of ranking
it is therefore unclear what the resulting order of
employees truly represents.
Some organizations, mainly in the United States,
have gone as far as adopting the practice of an-
nually terminating the employment of 5 to 10 per
cent of the consistently lowest performers. This is
referred to colloquially as ‘rank and hank’. It is
claimed that this practice ‘raises the bar’, ie it is said
that it improves the overall level of performance in
the business. There is no evidence that this is the
case.
Visual assessment
Visual assessment is an alternative to rating. This
takes the form of an agreement between the man-
ager and the individual on where the latter should
be placed on a matrix or grid, as illustrated in
Figure 25.2. The vertical axis of the grid in this
example assesses the behavioural style adopted by
the individual in carrying out the role, ie inputs.
The elements of behaviour to be assessed would be
defined in a competency framework and this would
be amplified in schedules of what would be regarded
as acceptable or unacceptable behaviour for each
area of competency. The horizontal axis measures
the level of business performance, ie outputs or what
the individual delivers. The assessment can place
someone anywhere in one of the four quadrants
according to behavioural style and delivery. Examples
of possible actions are provided. A picture is thus
provided of the individual’s overall contribution,
which is presented visually and as such provides a
better basis for analysis and discussion than a mech-
anistic rating.
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