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Multiple Bell Curves to Harmonize Performance Appraisal Across Organization

The bell curve system. It is being scrapped by many organizations, but you may not be able to afford the transformation, or you may still need the bell curve system for your business needs. In that case, you can tweak the bell curve system to accommodate the modern needs of the organization and harmonize the performance appraisal process across the organization. You may wonder how to do it. It is all about approach. In this article, the ways to modify the system are listed to lead you to the destination.  

What is a Bell Curve?   

First, let us understand what is a bell curve? Bell curve distribution is a pictorial depiction of employee performance with a large number of employees in the average level and few members in the high and bottom performers’ levels. It is an appraisal method adopted by companies in the late 90s.  

Subjective Review is Accountable for the Myth around Bell curve  

People do not have a problem with the bell curve, but rather, with the lack of transparency or understanding of the process. The bell curve is a well-accepted form of performance appraisal.”   

Sanstrup Misra, Director, Global HR and CEO, Carbon black business at Adithya Birla Group  

Companies assign a weight to goals and competencies for the annual appraisal process. During the process, the goals are data-backed and so there is no question of bias and transparency. But when it comes to competencies, the scoring depends upon the manager or the supervisor.  

If you see this number from the left side, it is 9; whereas, from the right side, it is 6. Similarly, the manager’s opinion may differ from yours. For example, you would have dealt with a client in a specific way. Your manager may not have liked the approach. So, he may rate you as incompetent when a relevant competency is considered. In your opinion, you have done it right, but he thinks you were missing something. He may not have understood your reason for doing it.     

Therefore, objective mathematical scoring should be given more weightage than subjective review, or effective communication and feedback mechanism should be practiced by organizations. The bell curve is not the problem, but the methods of inputs are. 

Bell curve is a statistical phenomenon.  Once you group your team into different buckets, it will always form a bell curve.  No escape from there.  Whether you are categorizing your employees or revenues or expenses or root cause issues in a defect tracking, it will always form a bell curve.  When it comes to performance, how do you assign the rating and reach the grade – it has subjective elements involved.  The subjective elements cannot be completed avoided, but it is important to define the guidelines to reduce subjectivity and bias.

The Way of Handling the Bell Curve Outputs May Change Your View  

A report in 2015 reveals that around 6% of Fortune 500 companies have moved away from the bell curve system. Other companies still use the bell curve system. 

The data of the bell curve should be handled differently to create a positive work culture. Look at the above bell curve with a normal distribution. If we give approximate values to the curve, the data might be, outstanding – 10%, low performers – 10%, and average (in the middle) – 80%. 

For a positively skewed curve, the number of low performers will be fewer than the high performers. For instance, outstanding – 15%, average – 80%, and low performers – 5%.

So, based on the organization philosophy, you can define the ideal bell curve and see how your managers are categorizing their team members (unforced).  Once that is done, how do you use your bell curve post the appraisal is the important step. The improving performers should be given real-time coaching and learning opportunities to move to the next level. The top performers should be rewarded with incentives and bonuses to appreciate their outstanding performance. Cherish the employees of your company. Engage your employees by recognizing their efforts.  

Multiple bell curves help harmonize performance appraisals across the organization  

Expand the ideal bell curve (at the organization level) to each department/ business unit.  That will result in multiple bell curves. For instance, if you are reviewing the performance of the marketing team wherein all the performers are good and best, you cannot use the standard bell curve. You must customize the ideal bell curve to suit the needs of the marketing team. Look at the curve below. 

For engineering team:

Now, the managers will not have the burden of force-fitting any employee. In fact, there will be no bias as the manager can never underrate an employee who performs well. It is time to adjust the bell curve system to increase employee retention and create a positive workspace culture.  

What do you think about the above? Comment below. Let us have a healthy discussion.