The “forced distribution” – where a supervisor places the majority of employees in the “average” range, others must fall below or above that. Only 10% of the employees can be in the highest category and these employees receive the largest amount of compensation; the 10% who are below average receive little compensation and may be let go. Proponents believe this type of evaluation system assists managers who are too timid to terminate or even discipline poor performers.
The “pay for performance” – percent increase directly related to how well you perform (as rated by your supervisor); has not been used very successfully in the public sector. Interesting study by MIT indicated pay for performance may generate pay discrimination linked to gender, race and national origin.
The organization has done away with performance evaluations altogether. If all employees receive the same increase (as they do in many union environments), why have performance evaluations at all.
Discussion Topic: (Respond to both questions.)
What type of performance evaluation (or lack of one) would or would not be successful for public sector organizations.
Typically, when public sector agencies reduce staff, seniority is used to determine who will be laid off. How could performance appraisals impact this? How would that affect an organization?