Final answer:
Organizations implementing forced distribution rating systems often experience gains by eliminating lower performers, as opposed to comprehensive 360-degree feedback intended for employee development.
Step-by-step explanation:
Organizations that introduce forced distribution rating systems where low performers are systematically identified and, where necessary, eliminated from payrolls often experience quick improvement gains.
Unlike self-rating or peer-rating, which can be unreliable according to studies by Atkins and Wood, and create discrepancies that require discussion for learning perspectives, a forced distribution system imposes rankings on employees based on their performance, often leading to a 'rank and yank' approach where the lowest performers are let go.
Forced distribution rating systems contrast with 360-degree feedback systems, which derive ratings from a combination of supervisors, peers, employees supervised by the employee, and from the employee themself. The purpose of 360-degree systems is to provide comprehensive feedback for improvement and development, rather than focusing strictly on elimination of lower performers.
Moreover, the effectiveness of performance appraisal systems can be greatly influenced by the organization's culture and the suitability of the system to that culture, according to Schraeder et al.