In view of the criticism it faced by the lawmakers, last year, for giving bonuses to the executives after a U. S. bailout, the American International Group Inc. has initiated an incentive plan that will give the top 10 percent of employees, the largest awards.

Christina Pretto, AIG's spokesperson, told that Based upon their performances, the employees would be rated on a scale of 1 to 4. "About 10 percent of the New York-based company's workers will be placed in the top rank, getting the biggest bonuses, while 70 percent will fall in the middle tiers", she said. And the bottom 20 percent of performers will get the lowest pays.

AIG would implement the plan on a few thousand employees first before implementing it firm-wide.

Being executed by Chief Executive Robert Benmosche, the initiative is called "forced distribution".

"A forced-ranking system can change a corporate culture and "help drive consistency across large organizations", says Ravin Jesuthasan, Leader of the Talent-management Consulting Practice for Towers Watson, which is a human-resources consultancy that isn't involved in AIG's planned ranking effort. "The approach can work in turnaround situations by helping to foster more accountability, but could be risky if not communicated well or if links to consequences like compensation and employment are not properly thought through", he added.