Bell curve also called as Gaussian distribution or Normal distribution used in performance appraisal is a forced rating or grading system in Performance management systems (PMS). It helps corporates in identifying- High, Average and Poor performer employees. Bell Curve works with the assumption of 10-80-10, meaning 10 % candidates are High-performers, 80% are average and rest 10 % are low performers. It works as a way of rewarding the high performers. Theoretically it is suitable in very large organisations, where top management can visualize trends of their employees performance in Bell shape curve. PMS helps management in estimating planned attrition rate. Management can use the output of Bell curve to identify the employees who needs training or re-training in their respective areas.
But many researches have shown that, there could be more high performers in a corporates as oppose to assuming just 10%. It arbitrarily limits the number of employees who can excell. If your forced curve allows for only 10% good performers, but say 15% employees have outperformed , then 5% of them will be unfairly punished.
The major reason of it's being adopted in companies is because "Mostly HRMS software Vendors have inbuilt Bell Curve in their appraisal systems". Using Bell Curve HR mangers can easily meet their goal of doing appraisals without any major change in existing software. Bell curve is too rigid a system, which forces managers to put employee in specific grade just for the sake of its requirements, without knowing actual grading of those employees. Employees hate this Bell curve.
Many a time we have seen it as a sever talent destroyer, people get panicked of job loss if they are kept in Low performance zone. Sometimes it ends up creating biased categorization, as many employees show hard work and shows noble efforts towards the end of appraisal period. There are chances of putting actual hard-worker into wrong categories. In my opinion making use of assumptions is good in case where someone is dealing with data for statistical analysis, but real people can not be averaged based on assumptions. Many big companies like Google, Infosys, Microsoft, KPMG, Cisco, HCL, TCS have stepped away from using Bell Curve as a tool for appraisal. They have chosen to appraise employees based on their individual performance. They have developed PMS systems where year-long feedback keeps coming, which is more transparent and merit based while doing appraisal ratings. Unlike in Bell Curve where vast majority is treated as average, which results in demotivated employees. And those being good achiever are pulled in average basket for the sake of fulfilling requirements of age-old system, finally forces them to look for another opportunity outside the organisation.
These days where market is changing every moment and embracing newer technology, most companies are looking for a robust and transparent appraisal system, whereby they can keep their workforce motivated and goal-oriented.
Experts strongly felt that irrespective of any performance management system you adopt, the performance of individuals reflect the performance of the organization. Managements should implement appraisal framework in such a way that "individuals with a lower level of compensation and a higher level of performance receives the higher rewards." This will keep employees motivated and year on year they will add value to the organisation.
Ironically , many companies are still using the Bell Curve which in my opinion is sever talent destroyer.
Comments