Purpose – Performance appraisal based on a forced distribution system (FDS) is widely used in large
corporate sectors around the globe. Though many researchers have pointed out several drawbacks in
FDS, due to the absence of any suitable alternative, it has been (and continues to be) adopted by many
industries over a long period of time. The purpose of this paper is to point out some serious limitations
of this system and propose a simple modification to overcome these limitations.