Ranking employees is found to have adverse effects but ultimately contributing very little when it comes to employee performance.
New research, by Tilburg University and Vienna University of Economics and Business, observed the effect of rating employee performance. Researchers Eddy Cardinaels and Christoph Feichter analysed forced and free rating systems on both employee reactions and supervisor rating behaviour. Together they found that forced ratings are unlikely to improve employee performance over free performance ratings, and instead increases their stress levels – resulting in a negative effect on employee creativity.
Results indicate this to be especially true in jobs where performance is difficult to capture via objective measures such as consulting, auditing, and communications. Even in jobs where objective criteria exists (e.g. sales), performance evaluation ratings still heavily rely on the subjective judgment of superiors. In all these situations, forced ratings might lead to problems for employees and superiors.
The study showed that the main cause for lack of creativity stems from people ‘choking under pressure’ as a result of the forced ratings. While some individuals may thrive under a competitive environment, the study suggests that most people don’t, in which the freedom to express and create without colleague comparisons is far more welcomed.
Professsor Christoph Feichter comments:
It is really important that firms are aware of potential costs and side effects, such as higher stress and supervisors not assigning appropriate ratings. Especially as these can lead other long-time side effects, such as higher turnover rates, health problems, and lack of motivation.
Feichter suggests forced rankings negatively impact employees because supervisors’ are not accurately evaluating them. Instead, managers are focusing on other aspects other than the true performance. As Professor Feichter explains:
In our study, supervisors with forced rankings tend to incorporate aspects in their ratings that have no relation to the real performance of employees but seem easier to justify towards employees. Moreover, supervisor strategically switch ranks of employees across periods, to assure each employee receives the highest rank at some point in time, although this cannot be explained by their real performance. Supervisors feel uncomfortable with the rankings and want to appear fairer towards the employees. Therefore, they start to game the system.
It would appear staff ranking among employees is not a robust tactic in motivating members of the team. When it comes to encouragement, reinforcement and general staff morale, employers should consider alternative methods.
Joanne is the editor for Workplace Wellbeing Professional and has a keen interest in promoting the safety and wellbeing of the global workforce. After earning a bachelor's degree in English literature and media studies, she taught English in China and Vietnam for two years. Before joining Work Well Pro, Joanne worked as a marketing coordinator for luxury property, where her responsibilities included blog writing, photography, and video creation.
