High achievers more likely to bolt when top rankings are restricted | Cornell Chronicle

"At a multinational U.S. pharmaceutical company, the analysis found, employees who were nominated for top performance ratings but not awarded them - because no more than 1 in 5 could be "exceptional" or "outstanding" - were at least 34% more likely to leave the company voluntarily. They were among the most likely to leave despite often receiving bigger bonuses intended to offset the sting of lesser recognition."

""If you're going to engage deliberately with recognition to get more from your people than just motivating them with money alone, forced ranking is the wrong way to do it," said Brittany Bond , assistant professor of organizational behavior in the ILR School. "When evaluation systems are tied to something arbitrary, like a 20% cutoff, they start to lose their power to inform, especially at the margins.""

Forced distribution ranking systems that cap the share of top performers increase voluntary turnover among high-performing employees who are nominated but denied top ratings. In a multinational U.S. pharmaceutical firm, nominated employees who were not awarded top ratings were at least 34% more likely to leave despite often receiving larger bonuses. Arbitrary cutoffs such as a 20% top-tier cap reduce the informational value of evaluations, especially at the margins. Even with equitable, transparent implementation and no negative career consequences for lower ratings, underrecognition produces dissatisfaction and higher turnover. Organizations should avoid forced ranking.

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