Reference no: EM131121373

Many employers are ranking employees, or "placing them in buckets" as it is commonly called, as part of their annual performance evaluations. For example, Ford Motor Company, when it used this system, had 18,000 managers who were grouped into sets of 30 to 50. Of each group, 10 percent must be assigned an "A" grade, 80 percent must be assigned as "B" grade, and 10 percent must be given a "C" grade. Those with the bottom grades are then eased out of the company. Those with a "C" grade cannot be given a pay raise, and those with a "C" grade for two years in a row are demoted or terminated. No exceptions are made for any of the groups, but Ford did cut back on the "C" requirement to 5 percent in 2001 and changed the system in 2003. Other companies with grading system include Intel and Sun Microsystems. Cisco Systems has established a goal of getting rid of 1 of very 20 employees, with the purpose of terminating employees who are given substandard performance evaluations. GE has a 20-70-10 plan for ranking employees. GE follows a carrot approach in that it rewards the top 20 percent so well that few ever leave the company. GE uses the 10 percent group to terminate employees, and it erminates about 8,000 management and professional employees each year. Former GE CEO Jack Welch noted that employees in the 10 percent bottom group would end up leaving the company anyway because they are unhappy in not performing, and GE just makes the inevitable decision for them early. Workers' right group cal lthe systems inhumane. Some say that instead of motivating employees to do better, the result is that they are demoralized and do worse or leave the company. Do these systems violate any laws? Are they a mandatory collective bargaining issue? ARe you comfortable with them from the persepective of business ethics? Why or Why not? Explain.