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CASE STUDY:

Alex, the recently appointed Human Resource (HR) Manager at Travel Co., has just walked back to his office, following a meeting with the company's CEO, Jet Bonza. Jet arranged the meeting with you to discuss complaints he had recently received from a small number of travel consultants working in their network of customer service centres. The travel consultants have each complained that despite their travel sales being the highest in their customer service centre for the last 12 months, that the company hasn't rewarded them for their outstanding performance in any way. Out of frustration they have all indicated that they are being denied access to performance bonuses because of their centre managers, who they believe are threatened by their success, and as such are discriminating against them in their performance appraisals, rating their overall performance as 'good', just like all their customer service centre colleagues. Alex indicates to you that the company's bonus system requires a staff member's overall performance to be rated as 'outstanding' before they are rewarded with a performance bonus. Performance ratings at Travel Co have always been made using a basic grading system in which staff are graded as one of: outstanding, good, average, needs improvement, and unsatisfactory. Ratings are left to the discretion of the customer service centre managers, as they work most closely with the travel consultants. Jet indicates to Alex, that the travel consultants who have complained to him, are threatening to use their sales records to find jobs elsewhere. He is worried, as the company can't afford to lose them. He wants you to 'fix' the problem. He has scheduled a meeting with you for the next day and expects you to brief him on the problems with the current performance appraisal system, and how the company can address them in the short-term.

QUESTION

In the short-term, explain how the current grading system can be refined by introducing a forced distribution. How would this work, and what would be the advantages and disadvantages of such an approach to performance appraisal ratings?