Differentiation of Performance: Forced ranking aims to categorize employees into fixed percentages, often resulting in a small percentage labeled as top performers, a majority as average, and a set percentage as low performers.

Competition and Motivation: Advocates argue that forced ranking fosters healthy competition among employees, motivating them to perform better to avoid being labeled as low performers.

Identification of Talent: Proponents suggest that it helps in identifying high potentials and low performers, allowing organizations to focus on developing and retaining top talent.

Merit-Based Rewards: Often used as a basis for merit-based rewards, promotions, or layoffs, where top performers are rewarded and low performers might face consequences.

Negative Impact on Collaboration: Critics argue that forced ranking can foster a cutthroat environment, damaging teamwork, collaboration, and fostering a fear-based workplace culture.

Subjectivity and Bias: It's often criticized for being subjective and prone to biases, especially when managers are forced to differentiate employees arbitrarily.

Stress and Demotivation: Employees might experience stress, demotivation, and distrust in the system if they feel unfairly judged or pitted against their colleagues.

Employee Retention Challenges: It can lead to retention challenges, causing high performers to leave due to feeling undervalued or labeled unfairly.

Adaptability in Performance Evaluation: Some argue that a more flexible and continuous evaluation system might be more effective in assessing performance than rigid rankings.

Alternative Performance Management: Organizations might consider alternatives such as continuous feedback, coaching, and development-oriented approaches rather than forced ranking systems.