A theoretically effective solution to the problem of ratings inflation is to introduce some standardization in ratings. One popular practice that aims to do this is forced ranking. In a forced ranking system, raters are not only prevented from giving everyone the highest possible rating but also forced to abide by a predetermined distribution. Forced ranking was advocated by Jack Welch when he was CEO of General Electric, as a way to stop inflation in ratings and to ensure “candor” in performance reviews. Many companies adopted it, only to abandon it later, citing undesirable side effects on
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