18. A large firm needs to dismiss the bottom 5% of its workforce and wants to use a performance appraisal system to choose which workers should be laid-off. Which type of performance appraisal is appropriate in this context?
Answer: B
Forced-distribution appraisal by a supervisor is the appropriate choice.
Using a forced-distribution appraisal allows the firm to categorize employees into specific performance tiers, enabling the identification of the bottom 5% effectively for potential layoffs.
A) A narrative essay appraisal by peers
A narrative essay appraisal relies on qualitative descriptions from peers, which can be subjective and may not provide a clear quantitative basis for ranking employees. This method lacks the structure needed to identify the bottom performers definitively, making it unsuitable for the firm's requirements.
B) A forced-distribution appraisal by a supervisor
This method systematically categorizes employees into a predefined distribution curve, ensuring that a specific percentage, such as the bottom 5%, can be identified. It provides a clear, objective framework for decision-making regarding layoffs, aligning perfectly with the firm's need to dismiss the lowest performers.
C) A paired-comparison appraisal by a supervisor
In a paired-comparison appraisal, each employee is compared directly with every other employee. While this method can yield a rank order of performance, it can be time-consuming and complex, making it less efficient for quickly identifying a specific percentage of low performers needed for layoffs.
D) A paired-comparison appraisal by peers
Similar to the paired-comparison by a supervisor, this method relies on peer evaluations, which can introduce bias and inconsistencies. Additionally, it does not provide a straightforward mechanism for identifying the bottom 5% and may lead to subjective results that are not suitable for making layoff decisions.
Conclusion
The forced-distribution appraisal by a supervisor is the most effective method for the firm's objective of identifying and dismissing the bottom 5% of its workforce. Other options, while they have their merits, either lack the necessary objectivity or efficiency required for such a critical decision-making process.