For whom the bell tolls !

Our HR professor just busted the use of bell curve in performance appraisal systems…It’s funny how you sometimes just accept some things as norm when they may not be appropriate at all …here’s why the bell curve is flawed…

Reasons:

The bell curve seeks to slot human beings in a standard normal distribution which has the following properties:

a) The objects picked are random

b) The objects picked are homogenous

c) The sample size should be greater than 30 preferably

considering that human beings being evaluated under performance management systems are neither homogenous , nor random, using the bell curve may not be the brightest way to evaluate and grade your team. Interestingly, bell curves were first deployed historically in performance management systems in late 90’s, and their use coincided with companies wanting to get rid of employees in bad economic cycles…

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5 thoughts on “For whom the bell tolls !

  1. Looking at the pre-conditions, arent we implying that bell curve is a way to plot parametric data ? If so then since science, research and corporate systems are leaning towards objectivity….isnt it true that employee performance should be measured parametrically rather than choosing the qualitative route?
    Interesting perspective though, but is qualitative and subjective assessment the next big thing in the business world or are there any other parametric routes being suggested.
    Interesting discussion…keep posting!

  2. hey ruchika,

    by all means, you can’t help but be subjective when it comes to evaluating people, especially when you have to evaluate potential for someone to perform a task which that person may never have performed before….very often people get moved into positions which call for development of new skills, a staffing decision like that would always have some subjectivity…bell curve does a forced parametric distribution, something which may or may not be right for your group…

    ~rajesh

  3. From my experience at companies where we used absolute performance appraisal systems (measurement against agreed goals) vs relative performance appraisal systems (bell curve rating as an example), one key piece that stands out is communicating the rating objective, defining the rating standards very clearly to the employees and providing feedback frequently helps set expectations. Some will not like it and will leave (which is ok since you cannot satisfy everyone); the folks who remain will be agreeable with the system, if not in agreement with the appraisal itself. Some questions from me that may help in providing clarity to the employees being appraised
    · What is the organizational objective of the forced rating using the Bell curve. Do you need to weed out consistent low performers because your company is growing at a tremendous rate or do you want to compensate differentially based on the ratings within the curve or both?
    · Do you define and communicate the rating standards clearly enough for the employees to know what they should be striving for? When you provide the appraisal, do you provide an example of key characteristics of the performers in the top category? This would considerably remove subjectivity
    · How is the peer group formed when doing the ratings? Do you form groups of employees with similar job roles and within a cluster of responsibility levels? Comparing a junior ‘new’ employee with a relatively senior or experienced employee could result in inequity and cause an unfair rating
    · What do you do to the performers on the lower end of the curve? Is there a constructive effort by the direct manager to provide a path for them to move ‘up’ in the curve or are they destined to be at that relative position year after year? Do you or the direct managers provide appropriate opportunities for them to move up? As appraising managers (whether functional resource or human resource managers), performance appraisals such as these are useful only if you provide a path (to the employees being appraised) for moving from the bottom of the curve upwards.
    · When you provide periodical feedback, do you indicate how they’re trending and why? And how can they improve?
    – How do the appraising managers get assessed if they consistently fail to improve the performance of employees in the lowest bucket? They should also ‘own’ improvement in the performance

    One of the downsides of a bell curve (or relative) rating system is that it is good only when the company is able to provide equal opportunities to similarly rated employees consistently; sadly, this is never true in any company and results in genuine dissatisfaction. Companies following this rating system have to suck this up.

  4. To Shantanu:
    That was very insightful, I agree – if there has to be a parametric performance appraisal, it’d be a great idea for any company to include a sample of this form in the orientation package.
    This would clarify to the employees what the goals and expectations from their roles are and I would think this would improve productivity. This would eliminate the need to weed out low performers and would improve employee retention rates too.

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