Who is attracted to an organisation using a forced distribution performance management system?

• DOI: http://doi.org/10.1111/1748-8583.12016
• Author: Brian D. Blume,Timothy T. Baldwin,Robert S. Rubin
• Date: 01 November 2013
• Published date: 01 November 2013

Who is attracted to an organisation using a forced

distribution performance management system?

Brian D. Blume, School of Management, University of Michigan, Flint

Robert S. Rubin, Department of Management, Richard H. Driehaus College of

Business, DePaul University

Timothy T. Baldwin, Department of Management and Entrepreneurship, Kelley

School of Business, Indiana University

Human Resource Management Journal, Vol 23, no 4, 2013, pages 360–378

Arguments related to forced distribution systems (FDS) are often dogmatic, but typically do not consider

for whom such systems might be most and least appealing. We examine the relationships between

participants’ individual differences (cognitive ability, collectivism and core self-evaluations) and their

attraction to an organisation utilising an FDS. From a sample of 143 advanced undergraduate students,

we found that individuals were more likely to be attracted to an organisation using FDS when they

possessed higher levels of cognitive ability and perceived FDS to be fairer. We also found a significant

interaction between respondents’ collectivism and fairness perceptions of FDS, indicating that

individuals who are high in collectivism are particularly sensitive to perceptions of FDS fairness.

Implications for organisational practice and future research are discussed.

Contact: Dr Brian Blume, University of Michigan, Flint, 2122 Riverfront Ctr., 303 E. Kearsley

St., Flint, MI 48502, USA. Email: blume@umflint.edu

INTRODUCTION

Aforced distribution system (FDS) is a type of performance management system in which

an individual performance is evaluated relative to others’ performance. Proponents of

FDS suggest that an FDS can help build a high-performance, meritocratic culture by

ensuring that managers better differentiate among high, average and low performers (Guralnik

et al., 2004). Some have extolled such practices as an efficient and pragmatic means of

‘rewarding doers’ and ‘muscle-building’ an organisation (Tichy and Sherman, 2001; Welch,

2001; Bossidy and Charan, 2002). Others condemn FDS as dysfunctional and suggest that such

systems are hazardous to an organisation’s health and culture (McBriarty, 1988; Pfeffer and

Sutton, 2000; Pfeffer, 2001; Gladwell, 2002).

Despite passionate anecdotal discussions regarding either success or failure of such systems,

empirical evidence has been slow to emerge (Pfeffer and Sutton, 2006). Recently, however,

researchers have begun to explore the usefulness of FDS from multiple angles. For example,

using a computer simulation, Scullen et al. (2005) demonstrated that FDS could lead to

improvement in workforce potential with the improvement largely dependent on the

percentage of voluntary turnover and low-performing workers that are fired. Schleicher et al.

(2009) examined FDS from a rater’s perspective and reported that raters found using FDS to be

more difficult and less fair than a more traditional scale format. In addition, Schleicher et al.

suggest that organisations implementing FDS should expect some resistance from managers.

Other studies have examined FDS from the perspective of the ratees. In a study of research

and development workers in South Korea, Kwak et al. (2009) compared the FDS ratings

that employees expected to receive to those given by their supervisors. Kwak et al. found

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doi: 10.1111/1748-8583.12016

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 23 NO 4, 2013360

© 2013 John Wiley & Sons Ltd.

Please cite this article in press as: Blume, B.D., Rubin, R.S. and Baldwin, T.T. (2013) ‘Who is attracted to an organisation using a forced distribution

performance management system?’. Human Resource Management Journal 23: 4, 360–378.

that employees who received a rating that met their expectation reported the highest

leader–member exchange and lowest turnover intention.

Another line of research is focusing on questions regarding attraction to organisations

utilising FDS. Roch et al. (2007) found that participants rated FDS as being the least fair

performance management system among several absolute and relative systems. Blume et al.

(2009) presented a policy-capturing study reporting how four key FDS elements (i.e. the

consequences for low performers, differentiation of rewards for top performers, frequency of

feedback and comparison group size) influenced students’ attraction to FDS. The authors found

that respondents were most attracted to FDS with less stringent treatment of low performers,

high differentiation of rewards, frequent feedback and large comparison groups.

In the present study, we extend the exploration of attraction to organisations utilising FDS.

Examining perceptions of performance management systems such as FDS is important because

employee perceptions of these systems are related to critical outcomes such as employee

commitment and satisfaction (Mount, 1984; Wright, 2002; Levy and Williams, 2004). If a

performance management system is not accepted and supported by employees, it is less likely

to achieve its goals, and its effectiveness will ultimately be limited (Dipboye and de Pontbriand,

1981; Ilgen et al., 1981; Cawley et al., 1998; Kuvaas, 2011). Previous research has found that

attraction varies considerably by the overall presence or weighting of various elements of FDS.

Yet, interactional psychology suggests that such structural features of FDS are likely to interact

with individual characteristics (e.g. personality, cognitive ability) in driving attraction to

organisations utilising FDS. Thus, the purpose of the present study is to examine relationships

between individual characteristics and attractiveness of organisations utilising FDS.

Person–environment fit

The framework of person–environment (PE) fit emerged from theories of PE interaction (Pervin,

1968; Kristof-Brown et al., 2005). PE fit is defined as, ‘the compatibility between an individual

and a work environment that occurs when their characteristics are well matched’

(Kristof-Brown et al., 2005: 281). One key type of PE fit is person–organisation (PO) fit, and it

represents a critical criterion for both employees and employers in the broad recruitment

process (Breaugh, 2008). More specifically, attraction to various aspects of organisational

functioning has been extensively explored in the literature on PO fit (Kristof, 1996). This line

of inquiry outlines conditions under which strong ‘fit’ is achieved by congruence between

individual and organisational characteristics. Importantly, strong fit is known to be a critical

component for attraction and retention of talent (Kristof-Brown et al., 2005) as employees

become attracted to and remain in environments that are well matched to their own dominant

attitudes, skills and behaviours (Schneider, 1987). Chapman et al. (2005: 938) found that,

‘perceptions of fit (i.e. subjective factors) proved to be one of the strongest predictors of the

attitudinal applicant attraction outcomes’.

Attraction to organisations utilising FDS

HRM systems are among the most salient aspect of an organisation’s environment (Wayne and

Casper, 2012), and the performance management subsystem is of particular importance (Lawler,

1973; Bowen and Ostroff, 2004). Organisations can differentiate themselves on the bases of what

is rewarded and how rewards are distributed (Gerhart and Milkovich, 1990), which is the key

component of an organisation’s performance management system. Bretz and Judge (1994: 533)

noted that, ‘Reward system characteristics reflect fundamental differences in what the

organisation deems valuable, and how it chooses to distribute resources among its members’.

They found support for their proposition that HR systems affects applicant job choices and that

Brian D. Blume, Robert S. Rubin and Timothy T. Baldwin

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 23 NO 4, 2013 361

© 2013 John Wiley & Sons Ltd.