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Should Employee Performance be Judged on a Bell Curve?

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The common practice of professional “grading on the Bell Curve” does little to improve employee performance. In fact, it does quite the opposite – employee performance (and happiness) plummets. So, to answer the question, “Should employee performance be judged on a Bell Curve?” the answer is no. A performance appraisal shouldn’t be conducted on a group level with individual performance expectations… they should be performed on an individual basis for group improvement. Here’s why (with a couple of examples to drive our point home).

Reason #1: Forced Rankings and Collaboration Don’t Mesh
The workforce has changed. It’s not always a 9-5 day, and the way we work is changing. Despite the dissonance between old-school style ranking and the evolved workforce, in some cases, performance management hasn’t caught up yet. Flatter organizational structures and the growing desire for a collaborative workforce negate the effectiveness of the Bell Curve performance appraisal system. Why? Say an employee scores higher on the curve than their co-worker. That can place a superiority position in what’s supposed to be a collaborative team.
Computer Sciences Corp., for example, recently started grading performance on a Bell Curve at an astonishing 40% employee failure rate. Well over one-fourth of their employees will fall under what is considered company standards, no matter how well they performed, simply because their coworker [1] did better.
Reason #2: Inaccurate Assessments
When your team hits all of their performance goals – not only reaches them, but knocks them out of the park – employee performance can’t effectively be judged on a Bell Curve. Charlotte A. Donaldson, Senior Learning Strategist at Booz Allen Hamilton, said:

“On those occasions when managers lead truly high-performing teams, someone still must be ranked low, despite meeting performance plan goals. To replace that person with an unknown is expensive.” [2]

So, each performance appraisal, you would then either replace the poor performers or place them on a probationary period while they fought for a place at least in the middle. Bell Curves mathematically can lead to higher turnover rates and an unnecessarily high recruitment budget.
Reason #3: Your Employees Hate Them
Bottom line, forced rankings diminish the value of your top performers, raises middle performers, and ignores the efforts of the under performers. Josh Bersin explained the basic faults of the system [3] and the damages to employee morale in three concise and poignant phrases:
  • Grading on a Bell Curve rations high performers, regardless of those who perform well. These are (typically) the top 10% of the workforce.
  • Forced rankings set a “losers” group at the bottom of the employee food chain. These are (typically) the bottom 10% of your team.
  • Then there’s everyone else, the middle of the herd. Because they make up 80% of the employees you just scaled, that’s where your budget for employee growth goes.

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