Comparing Performance Management: Yahoo!'s vs. GE's Forced System

This report provides a comparative analysis of performance management techniques employed by Yahoo! and General Electric (GE), with a focus on their use of forced distribution systems. At Yahoo!, the forced distribution system is used to rank employees into top, middle, and low-performing categories, which directly impacts compensation and benefits. This system aids in identifying lower performers and fostering communication between managers and employees. Similarly, GE utilizes a forced distribution system, which has evolved over time to promote innovation and improve financial services. The evolution involved categorizing employees into top, middle, and bottom tiers, with a shift towards evaluating employees based on traits and behaviors. The report concludes that while both companies use forced distribution, GE's evolved system emphasizes innovation and employee development more effectively. Desklib provides access to this and many other solved assignments.

Running head: HUMAN RESOURCE MANAGEMENT
Human resource management
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Table of Contents
Introduction......................................................................................................................................2
Performance Management: Using a Forced Distribution System at Yahoo!..................................2
Performance Management: The Evolution of the Forced Distribution System at GE....................2
Conclusion.......................................................................................................................................3
References........................................................................................................................................5

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Introduction
The management of performances is considered as an essential aspect of the human
resource management and here in this report, the methods of performance management at Yahoo
and General Electric (GE) will be compared. Both these two companies use the Forced
Distribution systems to ensure that the human resources are managed properly and long-term
success is achieved in business (Aguinis, 2009).
Performance Management: Using a Forced Distribution System at Yahoo!.
Being of the major Internet destinations, Yahoo provides ease for the internet users to
search for information and data as well as remain connected with people all around the world.
The utilization of forced distribution system by the performance management system at Yahoo
has helped in monitoring the performances of employees consistently. Based on their
performances, the staffs were assigned with ranks like top, middle and low level (Aguinis, 2009).
This has helped in identifying the lower performers and established good connection between the
managers and employees too. It is also useful for the company to assess the performances of the
employees and ensures that the specified standards and organizational requirements are met or
not. The increase in compensation and other benefits is managed by ranking the staffs according
to their performances at Yahoo (Park, 2014). This has helped in managing the employee
performance and created enough scopes and opportunities to maintain a good work culture and
accomplish the business objectives with ease.

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Performance Management: The Evolution of the Forced Distribution System at GE
General Electric also uses the Forced Distribution system and it has evolved from time to
time to adapt to the changes within the organization and maintained efficiency all throughout the
business functioning. Just like Yahoo, General Electric has also proposed the comparative rating
system through the utilization of forced distribution system. This effective performance
management method has allowed the company to maintain stability in its business operations for
delivering the best quality financial services and ensured global expansion in business too. This
comparative rating system as an effective performance management technique has also
categorized the employees of the organization into groups presented as top, middle and bottom
(Blume, Rubin & Baldwin, 2013). The previous distribution system provided ease for the
company split the employee groups into different segments through rankings and with the new
and evolved distribution system, there have been more employees falling under the category of
top-level workers. Previously, the distribution system was not much effective in establishing a
culture at General Electric where innovation could be promoted. However, with time, the
employees’ performances were evaluated based on their traits and behaviors, which facilitated
the development and growth of employees. This fostered the development of an innovative
culture and kept the staffs encourage and motivated to perform to their potential and attain the
business goals of General Electric with effectiveness (Berger, Harbring & Sliwka, 2013). Thus, it
could be believed that the evolution of Forced Distribution had brought several benefits in terms
of better management of human resources and more profit in business for General Electric too.
Conclusion
The report presented the differences between performance management techniques at
Yahoo and General Electric. The forced distribution system allowed the staffs to be ranked

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according to their performances, based on which, compensation and benefits were provided to
them at Yahoo. At General Electric, the forced distribution system changed the entire way of
managing performances by splitting them into groups and reducing the numbers of lower skilled
staffs. The company made sure to create an innovative culture, which favored the business
operations management and allowed the company to improve its financial services and global
expansion aims.

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References
Aguinis, H. (2009). Performance management. Upper Saddle River, NJ: Pearson Prentice Hall.
Berger, J., Harbring, C., & Sliwka, D. (2013). Performance appraisals and the impact of forced
distribution—An experimental investigation. Management Science, 59(1), 54-68.
Blume, B. D., Rubin, R. S., & Baldwin, T. T. (2013). Who is attracted to an organisation using a
forced distribution performance management system?. Human Resource Management
Journal, 23(4), 360-378.
Park, S. (2014). Motivation of public managers as raters in performance appraisal: Developing a
model of rater motivation. Public Personnel Management, 43(4), 387-414.