Forced Distribution Method

Июль 29, 2022

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Forced Distribution Method

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2. Definition of FDM This is an assessment strategy where supervisor is required to convey appraisals for
3. The main idea of FDM “excellent” – the most effective workers (20%) “good” – the vast
4. How people receive bonuses according to FDM Ranking from “A” to “F” “F” is replaced by
5. Pros and cons of FDM + FDM can really boost productivity using fear as a fuel
6. Example of company General Electric : - Jack Welch (1981-2001) - The main idea was to
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Слайд 2

Definition of FDM
This is an assessment strategy where supervisor is required

to convey appraisals for those being assessed (employees), into a pre-indicated performance rank

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The main idea of FDM
“excellent” – the most effective workers (20%)

“good” – the vast majority (70%)
“poor” – those who can be fired (10%)

Figure 2: Forced Distribution Method (MbaSkool, n.d.)

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How people receive bonuses according to FDM
Ranking from “A” to “F”
“F”

is replaced by new workers constantly

Figure 3: Why Force Distribution Performance Systems Don’t Work (James Pratt, 2016)

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Pros and cons of FDM
+ FDM can really boost productivity using

fear as a fuel
+ Quick identification of top performances
- Morale problems
- Unhealthy competition
- High risk of “burnout” (Pros and cons for using forced ranking within your business(CareerAddict, 2015))
- Losing some talents within the company

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Example of company
General Electric :
- Jack Welch (1981-2001)
-

The main idea was to fire “poor” workers
- Overall profit over 2800% from 1980 to 2001 (Why GE had to kill annual performance reviews after more than three decades (Quartz, 2015))
- Increase in revenue from 70$ bill in 1995 to 130$ bill in 2000
How to fire people in the right way? https://www.youtube.com/watch?v=U10gFLspWZk
“Some think it’s cruel or brutal to remove the bottom 10% of our people. It isn’t” (Jack Welch, “Jack: Straight From the Gut”, 2001)

Figure 4: John F.Welch, Jr (GE, n.d.)