Measuring Individual Human Capital Performance

Modeling its system after one developed by Jack Welch, former CEO of General Electric, Goodyear graded all salaried employees on a curve; the bottom 10 percent were denied bonuses and raises and told that they might lose their jobs. Some did.

Goodyear ended its two-year-old system just as a class-action discrimination lawsuit was filed against the company. And Goodyear isn’t the only company that had to face issues arising from implementing these rankings: Ford, Capital One, Conoco, and Microsoft have all learned that designing and implementing an effective forced ranking system is a formidable and often legal challenge.