Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

"Rank and Yank" Systems Could Improve Organizational Performance

04.03.2005


A study finds that forced distribution ratings systems, where a predetermined percentage of low-performing employees is fired every year, can be an effective way to improve a company’s workforce, although these benefits diminish over time.



"A significant number of organizations either already use, or are considering using, ’rank and yank’ systems of the type we studied, said Steve Scullen, one of the authors and associate professor of management at Drake University. "Many think these systems are a vital key to organizational success. Detractors argue strongly that ’rank and yank’ systems are discriminatory and counterproductive. Unfortunately, there is almost no research available to inform business people about how such systems might affect the quality of an organization’s workforce. This study provides the first step in that direction."

By asking if it is "reasonable to expect that an organization would be able to improve the performance potential of its workforce by firing the workers judged to be performing most poorly, and replacing them with promising applicants," the authors create one of the first studies to address this performance management system.


Supporters of FDRS believe it motivates the best employees, removes dead wood, and helps to develop strong leaders. Detractors see a myriad of problems including a system that is open to bias and discourages teamwork. The authors found that "in all our scenarios, workforce performance potential at the end of the simulation was higher than it was at the beginning." The overall impact of FDRS on the company’s performance was not measured.

Using a computer simulation, they modeled organizations’ ability to improve the quality of their workforces over a 30-year period after implementing FDRS. For the study to be accurate, they included the most significant variables: percentage of employees fired, reliability of ratings that determined who is fired, validity of methods to hire new employees, the selection ratio of new hires and voluntary turnover. Under conditions where the greatest numbers of poorly rated employees were fired and the rating system used to fire them was reliable, the average potential rose 48 percent — the highest. In general, the annual average improvement was approximately 16 percent for the first two years falling to 2 percent in year six and 1 percent in year 10. After year 20 there was no improvement.

"From a statistical or psychometric perspective, FDRS definitely hold promise for improving the average potential of organizational workforces," Scullen said. "We also found, however, that the large majority of improvement would occur in the first few years, after which little or no improvement should be expected. This raises several important questions, which our research so far cannot answer. Is the amount of potential improvement worth the potential cost? What are the nature and the magnitudes of the side effects on morale, recruiting, retention, productivity, etc.? And, finally, what should be done when the point of diminishing returns has been reached?"

This study is published in the current issue of Personnel Psychology, which publishes applied psychological research on personnel problems facing public and private sector organizations. Articles deal with all human resource topics, training and development, performance and career management, diversity, leadership, rewards and recognition, and work attitudes and motivation.

Scullen, who holds a Ph.D. in human resource management from the University of Iowa, has been published in numerous journals and books. His primary research interest is the measurement and management of job performance.

| newswise
Further information:
http://www.drake.edu

More articles from Studies and Analyses:

nachricht Do microplastics harbour additional risks by colonization with harmful bacteria?
05.04.2018 | Leibniz-Institut für Ostseeforschung Warnemünde

nachricht Rutgers-led innovation could spur faster, cheaper, nano-based manufacturing
14.02.2018 | Rutgers University

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Spider silk key to new bone-fixing composite

University of Connecticut researchers have created a biodegradable composite made of silk fibers that can be used to repair broken load-bearing bones without the complications sometimes presented by other materials.

Repairing major load-bearing bones such as those in the leg can be a long and uncomfortable process.

Im Focus: Writing and deleting magnets with lasers

Study published in the journal ACS Applied Materials & Interfaces is the outcome of an international effort that included teams from Dresden and Berlin in Germany, and the US.

Scientists at the Helmholtz-Zentrum Dresden-Rossendorf (HZDR) together with colleagues from the Helmholtz-Zentrum Berlin (HZB) and the University of Virginia...

Im Focus: Gamma-ray flashes from plasma filaments

Novel highly efficient and brilliant gamma-ray source: Based on model calculations, physicists of the Max PIanck Institute for Nuclear Physics in Heidelberg propose a novel method for an efficient high-brilliance gamma-ray source. A giant collimated gamma-ray pulse is generated from the interaction of a dense ultra-relativistic electron beam with a thin solid conductor. Energetic gamma-rays are copiously produced as the electron beam splits into filaments while propagating across the conductor. The resulting gamma-ray energy and flux enable novel experiments in nuclear and fundamental physics.

The typical wavelength of light interacting with an object of the microcosm scales with the size of this object. For atoms, this ranges from visible light to...

Im Focus: Basel researchers succeed in cultivating cartilage from stem cells

Stable joint cartilage can be produced from adult stem cells originating from bone marrow. This is made possible by inducing specific molecular processes occurring during embryonic cartilage formation, as researchers from the University and University Hospital of Basel report in the scientific journal PNAS.

Certain mesenchymal stem/stromal cells from the bone marrow of adults are considered extremely promising for skeletal tissue regeneration. These adult stem...

Im Focus: Like a wedge in a hinge

Researchers lay groundwork to tailor drugs for new targets in cancer therapy

In the fight against cancer, scientists are developing new drugs to hit tumor cells at so far unused weak points. Such a “sore spot” is the protein complex...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

Invitation to the upcoming "Current Topics in Bioinformatics: Big Data in Genomics and Medicine"

13.04.2018 | Event News

Unique scope of UV LED technologies and applications presented in Berlin: ICULTA-2018

12.04.2018 | Event News

IWOLIA: A conference bringing together German Industrie 4.0 and French Industrie du Futur

09.04.2018 | Event News

 
Latest News

Magnetic nano-imaging on a table top

20.04.2018 | Physics and Astronomy

Start of work for the world's largest electric truck

20.04.2018 | Interdisciplinary Research

Atoms may hum a tune from grand cosmic symphony

20.04.2018 | Physics and Astronomy

VideoLinks
Science & Research
Overview of more VideoLinks >>>