Forced Distribution Method

1. Forced Distribution Method

Figure 1: Forced distribution method- All you need to know. (SuccessDart, 2017)
Prepared by
Dmitry Evstigneev
Elina Devyatkina
Maria Stepanenko

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

3. 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.)

4. 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)

5. 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

6. 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
Figure 4: John F.Welch, Jr (GE, n.d.)
(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)

7. References

Forced distribution method- All you need to know [Image], 2017. Retrieved
from http://www.successdart.com/forced-distribution-method-need-know/
Forced distribution method [Image], n.d. Retrieved from
https://www.mbaskool.com/business-concepts/human-resources-hrterms/15258-forced-distribution-method.html
Reflective Management Inc. “Why Force Distribution Performance Systems
Don’t Work” [Image], 2017. Retrieved from
http://reflectivemanagement.com/forced-distribution-performance-systems/
CareerAddict. “Pros and cons for using forced ranking within your
business”,2015. Retrieved from https://www.careeraddict.com/pros-and-consfor-using-forced-ranking-within-your-business
John F.Welch [Image], n.d. Retrieved from https://www.ge.com/aboutus/leadership/profiles/john-f-welch-jr
Quartz. Why GE had to kill annual performance reviews after more than three
decades, 2015. Retrieved from https://qz.com/428813/ge-performance-reviewstrategy-shift/
Jack Welch, “Jack: Straight From the Gut”, 2001.