Forced distribution rating systems: When does "rank and yank" lead to adverse impact?

Journal of Applied Psychology

Volumn 100, Issue 1, 2015, Pages 180-193

  Giumetti, Gary W ^a   Schroeder, Amber N ^b   Switzer, Fred S ^c  

^a QUINNIPIAC UNIVERSITY   (United States)

^b WESTERN KENTUCKY UNIVERSITY   (United States)

^c CLEMSON UNIVERSITY   (United States)

Author keywords

Adverse impact; Fdrs; Forced distribution rating system; Performance appraisal; Relative performance rating system

Indexed keywords

HUMAN; MONTE CARLO METHOD; PERSONNEL MANAGEMENT; PROCEDURES; STANDARDS;

EMPLOYEE PERFORMANCE APPRAISAL; HUMANS; MONTE CARLO METHOD; PERSONNEL DOWNSIZING;

EID: 84925585629     PISSN: 00219010     EISSN: None     Source Type: Journal    
DOI: 10.1037/a0037191     Document Type: Article

References (74)

1. AFSCME v. Doherty, No. 98-1843, 169 F. 3d 1068 (7th Cir. 1999).
2. Aguinis, H. (2004). Test-score banding in human resource selection: Technical, legal, and societal issues. Westport, CT: Praeger/Greenwood.
3. Aliotta v. Bair, No. 09-5234, 614 F. 3d 556; 392 (U.S. App. D. C. 2010).
4. Allen, T. D., Freeman, D. M., Russell, J. E., Reizenstein, R. C., & Rentz, J. O. (2001). Survivor reactions to organizational downsizing: Does time ease the pain? Journal of Occupational and Organizational Psychology, 74, 145-164. doi:10.1348/096317901167299
5. Amabile, T. M., & Conti, R. (1999). Changes in the work environment for creativity during downsizing. Academy of Management Journal, 42, 630-640. doi:10.2307/256984
6. Amalfe, C. A., & Adelman, H. (2002, March 31). Forced rankings: The latest target of plaintiff's employment lawyers. Employment and Labor Law Alert. Retrieved from http://www.gibbonslaw.com/news_publications/articles.php?action_display_publication&publication_id_790
7. Bates, S. (2003). Forced ranking: While grading employees on a scale relative to each other forces a hard look at finders keepers, losers may become weepers. HR Magazine, 48, 63-68. Retrieved from http://www .shrm.org/Publications/hrmagazine/EditorialContent/Pages/0603bates.aspx
8. Berger, J., Harbring, C., & Sliwka, D. (2013). Performance appraisals and the impact of forced distribution: An experimental investigation. Management Science, 59, 54-68. doi:10.1287/mnsc.1120.1624
9. Biddle, D. A. (2012). Adverse impact and test validation: A practitioner's handbook (3rd ed.). West Conshohocken, PA: Infinity.
10. Biddle, D. A., & Morris, S. B. (2011). Using Lancaster's mid-P correction to the Fisher's exact test for adverse impact analyses. Journal of Applied Psychology, 96, 956-965. doi:10.1037/a0024223
11. Bretz, R. D., & Judge, T. A. (1998). Realistic job previews: A test of the adverse self-selection hypothesis. Journal of Applied Psychology, 83, 330-337. doi:10.1037/0021-9010.83.2.330
12. Brink, K. E., & Crenshaw, J. L. (2008). Adverse impact: What is it? How do you calculate it? Retrieved from www.ipacweb.org/conf/08/brink.pdf
13. Brito v. Zia Company, 428 F. 2d 12001 (10th Cir. 1973).
14. Brockner, J., Konovsky, M., Cooper-Schnieder, R., Folger, R., Martin, R., & Bies, R. J. (1994). Interactive effects of procedural justice and outcome negativity on victims and survivors of job loss. Academy of Management Journal, 37, 397-409. doi:10.2307/256835
15. Camilli, G., & Hopkins, K. D. (1978). Applicability of chi-square to 2 _ 2 contingency tables with small expected frequencies. Psychological Bulletin, 85, 163-167. doi:10.1037/0033-2909.85.1.163
16. Campion, M. A., Outtz, J. L., Zedeck, S., Schmidt, F. L., Kehoe, J. F., Murphy, K. R., & Guion, R. M. (2001). The controversy over score banding in personnel selection: Answers to 10 key questions. Personnel Psychology, 54, 149-185. doi:10.1111/j.1744-6570.2001.tb00090.x
17. Cerasoli, C. P., Nicklin, J. M., & Ford, M. T. (2014). Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year metaanalysis. Psychological Bulletin. Advance online publication. doi:10 .1037/a0035661
18. Chen, P., Mehrotra, V., Sivakumar, R., & Yu, W. W. (2001). Layoffs, shareholders' wealth, and corporate performance. Journal of Empirical Finance, 8, 171-199. doi:10.1016/S0927-5398(01)00024-X
19. Collins, M. W., & Morris, S. B. (2008). Testing for adverse impact when sample size is small. Journal of Applied Psychology, 93, 463-471. doi:10.1037/0021-9010.93.2.463
20. Contreras v. City of Los Angeles, 455 U.S. 1021. (1981).
21. Cook, N. (2012). Effects of forced distribution method of performance evaluation on employee motivation in a manufacturing environment (Doctoral dissertation). Available from Dissertation Abstracts International.
22. Delgado V. Ashcroft, 368 F. Supp. 2d 9, 2004 U.S. Dist. LEXIS 27677 (D. D. C., Aug. 30, 2004).
23. Dominick, P. G. (2009). Forced rankings: Pros, cons, and practices. In J. W. Smither & M. London (Eds.), Performance management: Putting research into action (pp. 411-443). San Francisco, CA: Jossey-Bass.
24. Dunleavy, E. M., & Gutman, A. (2011). An update on the statistical versus practical significance debate: A review of Stagi v. Amtrak (2010). TIP: The Industrial-Organizational Psychologist, 48, 121-130. Retrieved from www.siop.org
25. Equal Employment Opportunity Commission. (1978). Uniform Guidelines on Employee Selection Procedures. Federal Register, 43, 3S290-38315.
26. Equal Employment Opportunity Commission. (1979, March 2). Adoption of questions and answers to clarify and provide a common interpretation of the Uniform Guidelines on Employee Selection Procedures. Federal Register, 40 (43), Rules and Regulations [6570-06-M]. Retrieved from http://www.eeoc.gov/policy/docs/qanda_clarify_procedures.html
27. Finch, D. M., Edwards, B. D., & Wallace, J. (2009). Multistage selection strategies: Simulating the effects on adverse impact and expected performance for various predictor combinations. Journal of Applied Psychology, 94, 318-340. doi:10.1037/a0013775
28. Fortune. (2004, April 5). Fortune 1,000 ranked within industries. Fortune, 149(8), 26-36. Retrieved from http://money.cnn.com/magazines/fortune/fortune_archive/2004/04/05/366355/
29. Foster, T. C. (2006). Analysis of organizational justice as a framework for understanding the impact of performance appraisal systems on judicial outcomes in wrongful discharge cases (Doctoral dissertation). Available from Dissertation Abstracts International.
30. General Electric Company. (2000). GE 2000 annual report. Retrieved from http://www.ge.coni/annualOO/letter/index.html
31. Grote, D. (2005). Forced ranking: Making performance management work. Boston, MA: Harvard Business School Press.
32. Guralnik, O., Rozmarin, E., & So, A. (2004). Forced distribution: Is it right for you? Human Resource Development Quarterly, 15, 339-345. doi: 10.1002/hrdq.1107
33. Guthrie, J. P., & Datta, D. K. (2008). Dumb and dumber: The impact of downsizing on firm performance as moderated by industry conditions. Organization Science, 19, 108-123. doi:10.1287/orsc.1070.0298
34. Gutman, A. (2000). EEO law and personnel practices (2nd ed.). Thousand Oaks, CA: Sage.
35. Hallock, K. F. (1998). Layoffs, top executive pay, and firm performance. American Economic Review, 88, 711-723. Retrieved from http://www .emeraldinsight.com/bibliographic_databases.htm?id_1296904
36. Hofmann, D. A., Jacobs, R., & Baratta, J. E. (1993). Dynamic criteria and the measurement of change. Journal of Applied Psychology, 78, 194- 204. doi:10.1037/0021-9010.78.2.194
37. Hom, P. W., Roberson, L., & Ellis, A. D. (2008). Challenging conventional wisdom about who quits: Revelations from corporate America. Journal of Applied Psychology, 93, 1-34. doi:10.1037/0021-9010.93.1.1
38. Ilgen, D. R., & Hulin, C. L. (2000). Introduction to computational modeling in organizations: The good that modeling does. In D. R. Ilgen & C. L. Hulin (Eds.), Computational modeling of behavior in organizations: The third scientific discipline (pp. 3-18). Washington, DC: American Psychological Association. doi:10.1037/10375-000
39. Kwoh, L. (2012, January, 31). Career journal: 'Rank and yank' retains vocal fans. The Wall Street Journal. Retrieved from http://online.wsj .com/article/SB10001424052970203363504577186970064375222.html
40. Lee, J. A., Havighurst, L. C., & Rassel, G. (2004). Factors related to court references to performance appraisal fairness and validity. Public Personnel Management, 33, 61-77. doi:10.1177/009102600403300105
41. Lipman, V. (2012, July 19). The pros and cons of forced rankings: A manager's perspective. Forbes Magazine. Retrieved from http://www.forbes.com/sites/victorlipman/2012/07/19/the-pros-and-cons-of-forcedrankings-a-managers-perspective/
42. Martin, D. C., Bartol, K. M., & Kehoe, P. E. (2000). The legal ramifications of performance appraisals: The growing significance. Public Personnel Management, 29, 379-405.
43. McKay, P. F., & McDaniel, M. A. (2006). A reexamination of Black- White mean differences in work performance: More data, more moderators. Journal of Applied Psychology, 91, 538-554. doi:10.1037/0021-9010.91.3.538
44. Medeiros v. Pratt & Whitney Power Systems, Inc., 272 Fed. Appx. 78; 2008 U.S. App. LEXIS 7343 (2nd Cir. 2008).
45. Meisler, A. (2003). Dead man's curve. Workforce Management, 82, 44- 49. Retrieved from http://www.workforce.com/articles/15603
46. Mulligan, J. R., & Bull Schaefer, R. A. (2011). A new hope for rank and yank. Journal of Leadership & Organizational Studies, 18, 385-396. doi:10.1177/1548051811405206
47. Murphy, K. R., & Cleveland, J. N. (1995). Understanding performance appraisal: Social, organizational, and goal-based perspectives. Thousand Oaks, CA: Sage.
48. Murphy, K. R., & Jacobs, R. R. (2012). Using effect size measures to reform the determination of adverse impact in equal employment litigation. Psychology, Public Policy, and Law, 18, 477-499. doi:10.1037/ a0026350
49. Office of Federal Contract Compliance Programs. (1993). Federal contract compliance manual (SUDOC# L 36.8: C 76/993). Washington, DC: Department of Labor, Employment Standards Administration.
50. Olson, C. A., & Davis, G. M. (2003). Pros and cons of forced ranking and other relative performance ranking systems. SHRM Legal Report. Retrieved from http://www.shrm.org/Publications/LegalReport/Pages/ CMS_003991.aspx
51. Ones, D. S., & Anderson, N. (2002). Gender and ethnic group differences on personality scales in selection: Some British data. Journal of Occupational and Organizational Psychology, 75, 255-276. doi:10.1348/ 096317902320369703
52. Ones, D. S., & Viswesvaran, C. (1998). Gender, age, and race differences on overt integrity tests: Results across four large-scale job applicant data sets. Journal of Applied Psychology, 83, 35-42. doi:10.1037/0021-9010 .83.1.35
53. Osborne, T., & McCann, L. A. (2004). Forced ranking and age-related employment discrimination. Human Rights, 31, 6 -10. Retrieved from http://www.americanbar.org/publications/human_rights_magazine_ home/human_rights_vol31_2004/spring2004/hr_spring04_forced.html
54. Palmon, O., Sun, H., & Tang, A. (1997). Layoff announcements: Stock market impact and financial performance. Financial Management, 26, 54-68. doi:10.2307/3666213
55. Pascoe v. Mentor Graphics Corp., 2001 U.S. Dist. LEXIS 23669 (D. Or., Nov. 2, 2001).
56. Roth, P. L., Bevier, C. A., Bobko, P., Switzer, F., & Tyler, P. (2001). Ethnic group differences in cognitive ability in employment and educational settings: A meta-analysis. Personnel Psychology, 54, 297-330. doi:10.1111/j.1744-6570.2001.tb00094.x
57. Roth, P. L., Huffcutt, A. I., & Bobko, P. (2003). Ethnic group differences in measures of job performance: A new meta-analysis. Journal of Applied Psychology, 88, 694-706. doi:10.1037/0021-9010.88.4.694
58. Sanders v. Southwestern Bell Tel., L. P., 2009 U.S. Dist. LEXIS 38636 (N. D. Okla., May 6, 2009).
59. Schleicher, D. J., Bull, R. A., & Green, S. G. (2009). Rater reactions to forced distribution rating systems. Journal of Management, 35, 899- 927. doi:10.1177/0149206307312514
60. Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124, 262-274. doi:10.1037/0033-2909.124.2.262
61. Scullen, S. E., Bergey, P. K., & Aiman-Smith, L. (2005). Forced distribution rating systems and the improvement of workforce potential: A baseline simulation. Personnel Psychology, 58, 1-32. doi:10.1111/j .1744-6570.2005.00361.x
62. Society for Human Resource Management. (2005). Does your organization utilize forced ranking to evaluate employees? SHRM poll. Retrieved from http://www.shrm.org/Research/SurveyFindings/Articles/Pages/ forcedrankingtoevaluateemployees.aspx
63. Sparrow, P. (2009, June). Why we love and hate forced ranking. The Human Factor, 32-35. Retrieved from http://www.thehumanfactor.in/01062009/default.asp
64. Stagi v. Amtrak, 391 Fed. Appx. 133, 2010, U.S. App. LEXIS 17261 (E. D. Pa., July 3, 2012).
65. Steele-Johnson, D., Osburn, H. G., & Pieper, K. F. (2000). A review and extension of current models of dynamic criteria. International Journal of Selection and Assessment, 8, 110-136. doi:10.1111/1468-2389.00141
66. Stewart, S. M., Gruys, M. L., & Storm, M. (2010). Forced distribution performance evaluation systems: Advantages, disadvantages and keys to implementation. Journal of Management & Organization, 16, 168-179. doi:10.5172/jmo.16.1.168
67. Trevor, C. O., & Nyberg, A. J. (2008). Keeping your headcount when all about you are losing theirs: Downsizing, voluntary turnover rates, and the moderating role of HR practices. Academy of Management Journal, 51, 259-276. doi:10.5465/AMJ.2008.31767250
68. U.S. Census Bureau. (2007). 2007 economic census. Retrieved from http://factfinder.census.gov/servlet/EconSectorServlet?_lang_en&ds_name_ EC0700A1&_SectorId_72&_ts_302371302024
69. U.S. v. Commonwealth of Virginia, 454 F. Supp. 1077, 1978 U.S. Dist. LEXIS 16426.
70. Van Iddekinge, C. H., Taylor, M., & Eidson, C. E. (2005). Broad versus narrow facets of integrity: Predictive validity and subgroup differences. Human Performance, 18, 151-177. doi:10.1207/s15327043hup1802_3
71. Waisome v. Port Authority of New York & New Jersey, F. 2d 711, 1993 U.S. App. LEXIS 19724 (2nd Cir., 1993).
72. Werner, J. M., & Bolino, M. C. (1997). Explaining U.S. courts of appeals decisions involving performance appraisal: Accuracy, fairness, and validation. Personnel Psychology, 50, 1-24. doi:10.1111/j.1744-6570.1997 .tb00898.x
73. Wilkinson, L. (1990). Systat: Statistics. Evanston, IL: Systat.
74. Zyphur, M. J., Chaturvedi, S., & Arvey, R. D. (2008). Job performance over time is a function of latent trajectories and previous performance. Journal of Applied Psychology, 93, 217-224. doi:10.1037/0021-9010.93 .1.217