This is something I learn from a company President when I’m still a newbie HR Manager. He patiently explained why not everyone should be receiving the outstanding grade in performance appraisal, and receive the highest increase.
The “10-80-10” Principle
Of your total employees, 10% are top performers and self motivated, regardless of the climate. 80%, responds either good or bad, to HR initiatives. The remaining 10% are problem employees who no longer respond to intervention.