Case Study: Founded in 1987, Haier Enterprises is a health, wellness, and beauty products company that has nearly 7,000 employees. In 2009, Haier began developing a new performance management evaluation system. According to the new PM system, performance ratings uses forced distribution model of performance ranking in which employees are ranked with respect to one another (i.e., not absolute but relative ranking system). The company codified responsibilities and measures for each job class, and managers were instructed to have goal-setting meetings with employees. In January, all performance reviews were conducted in conjunction with the annual goal-setting process. Employees were categorized into one of four ranking categories as below.

Ranking Category Targe Constraints Top Achiever (T) 10% Max of 14%% Achiever (A) 75% Min of 70% Low Achiever (L) 12% Min of 7% Unacceptable (U) 3% No Minimum