Improves Productivity and Profitability If you get rid of the bottom 10 percent

Improves productivity and profitability if you get

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Improves Productivity and Profitability: If you get rid of the bottom 10 percent of workers who aren't contributing much, over time the quality of the workforce improves. You're getting rid of the people who don't add value, which frees up space for talented junior staff members to rise through the ranks. For the top performers, being recognized and rewarded for having a fabulously productive year encourages them to repeat that performance over and over again. This results in high productivity and profitability for the organization. This is a very controversial way of using performance appraisal data. Disadvantage: Thrive or Die: Almost by definition, the ranking system creates a cutthroat work environment that favors competition over teamwork. This is not good news. When employees know they're pitted against one another, they may engage in risky or unethical behavior to beat out the competition. For example, employees may refuse to collaborate, share ideas, or help their colleagues. They might cheat, sabotage co-workers, hoard resources, or steal another's ideas and pass them off as their own. For the business, there's a fair chance that this heads-down, narrow focus will hurt the bottom line. Competition makes people focus absolutely on the tasks they're being assessed on. Workers may be too worried to ask for help in case they are identified as low performers. As a result, they stop improving, innovating and collaborating, and they also stop bringing their best selves to the job. The business suffers as a result. High Stress and High Turnover : Living with the sword of Damocles over your head is stressful, and the business could end up sleepwalking into a situation of burnout, absenteeism and high staff turnover. It's demoralizing to
see a percentage of your colleagues miss out on a pay raise each year and even more demoralizing to know that next year, it could be you. Employees are unlikely to perform their best in this type of environment. Many will leave and look for positive work experiences elsewhere. The limitations of ranking performance include the creation of a negative environment, it may demotivate employees and decrease their morale with increased anxiousness and stress being build up. The corporation environment gets heavily competitive and this decreases teamwork. People get extremely selfish only focusing on their job and this creates a very hostile work environment. From the perspective of the organization dismissing and removing the bottom 10% every year to recruit new ones is extremely costly. The costs of recruitment and selection increase. Moreover, every time you remove the bottom 10% and introduce new ones the newly introduced ones may not effectively performing and giving their best as it takes employees time (a couple of months) to learn how to do the job, the processes of the organization and just get familiar and adjusted to the organization. This means that there are significant operational costs related to this. This

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