Forced ranking : friend or foe? : on forced ranking and its effect on intrinsic motivation, justice perceptions and performance

Abstract

This study explores the effects of forced ranking, conceptualized as a summative, norm‐referenced form of feedback, on performance. It was hypothesized that the lower ranked individuals would demonstrate less performance improvement than the higher ranked individuals after receiving feedback. The results were opposite as hypothesized, with higher ranked individuals performing worse compared to lower ranked individuals. These results are explained and discussed in light of both earlier and more recent feedback theories. To further investigate the effects of forced ranking, three mediating variables were included. The first mediating variable, intrinsic motivation, had only a marginally significant effect on performance. Forced ranking also failed to reach statistical significance on intrinsic motivation, and mediation is therefore not supported. The second and third mediating variables were distributive and procedural justice. Forced ranking did not achieve a significant effect on these variables. The effect of distributive‐ and procedural justice on performance did not produce significant results either, which rejects the mediation hypotheses. Nonetheless, post hoc interaction analyses discovered a significant interaction effect of procedural justice on the relationship between forced ranking and performance; participants with lower perceptions of procedural justice performed better than those with higher perceptions, and this effect was the most pronounced when higher ranked. A possible explanation for this rather unconventional finding is discussed, together with explanations and discussions of the insignificant and significant findings of all variables. In sum, some of the propositions of feedback theory are supported by this study, and the facilitating tendency of intrinsic motivation on performance is to some degree further established. Nevertheless, in order to sort out of the effects of forced ranking on performance and other work‐related variables, more research is clearly needed.