REAL RESEARCH: THE MYTHS OF THE PERFORMANCE BELL CURVE

by Gabrielle Lee

Senior OD Catalyst

gabriellelee@pace-od.com

 “Forced ranking is used to determine a quota of high performers, average performers and low performers.”

This statement almost always pops up in our workshops about performance management and we have observed that leaders do not necessarily explain this concept well, leading to misunderstandings between employees, the HR team and the leaders of the company. Rightly so, there is much research about how the bell curve discourages employees’ performance efforts and results in a “rank and yank” outcome. However, advantages of the bell curve system have also been presented; which leads us to ask: How can leaders still use the performance bell curve as a strategic tool to achieve performance commitment and engagement?

Whether you like it or not, a natural bell curve forms when any population comes together. Assuming that goal setting was done rigorously and monitored closely, at the end of the year there will be a number of performers who are more outstanding, a large number who are the critical mass of performers, and some who have large performance gaps. We would like to suggest that leaders consider the following perspectives before making a decision on whether the bell curve is useful:

 

DISTRIBUTION OF PERFORMANCE

 

If you are the leader of company A, what will be your immediate concern for the next 1 year?  If you are the leader of company B, what will be your concern? You will realise that as a leader, you start considering different things for the respective bell curves. The people strategy that follows will differ as well.

 

MANAGE LENIENT AND STRICT RATINGS OF MANAGERS

When there is a large cluster of employees in the high-performing end or a large cluster in the low-performing end, these unbalanced ratings must be picked up by leaders as it could mean that managers are not appraising their people correctly. Research shows that the average manager tends to rate on a more lenient scale, which may demotivate high performers and result in mediocre employees being retained.

 

MEANINGFUL HRM ACTIVITIES

Information from the bell curve can direct these activities in a more meaningful way.

 

Learning and growth activities

Performance development plan: Low performing employees have to be counselled and given skills training or mentoring to close obvious performance gaps, or perhaps be rotated to a position where there is better person-job fit.

  • Learning and development plan: For the critical mass of employees who are definitely valued by the company and who contribute to the stability of the business. A number of these employees may also be groomed to be high-performers eventually.
  • Career development plan: For the high performers who are motivated to work harder to grow in the company, leaders can look at initiatives to retain top talent and build succession pipelines for the next generation of leaders.

 

Reward and recognition practices

  • Information from performance bell curves can be used to review reward and recognition practices so that employees are adequately compensated for their efforts.

 

Sources:

“The Myth of the Bell Curve". Forbes.com. N.p., 2016. Web. 20 Sept. 2016.

"Use Of Bell Curve In Performance Appraisals – Good Or Bad? - Empxtrack". Empxtrack. N.p., 2016. Web. 20 Sept. 2016.

 

How has the performance bell curve impacted your organisation’s performance management practices? We  would  love  to  hear  from  you  at connect@pace-od.com!

 

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