Forced-ranking systems that require managers to evaluate the performance of an employee against other employees can hurt productivity, says a researcher at the University of Michigan's Ross School of Business.
"The use of rankings to scale employee performance relative to that of their peers, instead of using predetermined goals, may negatively affect employees' willingness to maximize joint gains that will benefit the organization," said Stephen Garcia, adjunct assistant professor of management and organizations at the Ross School and assistant professor at the Ford School of Public Policy.
"Individuals will care less about performing better on a given task and will, instead, shift their focus to performing relatively better on a scale comparison—in other words, being surpassed in rank."
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