Ring in the new; ring out the ‘Bell Curve’

The employee assessment tool popularly known as the ‘bell curve’, made famous by General Electric decades ago is fast losing favour (and rightly so) in today’s dynamic VUCA (Volatile, Uncertain, Complex, Ambiguous) environment under which present day businesses have to operate.

Soon after global technology giants Microsoft and Adobe announced that they had decided to junk the bell curve they were followed by KPMG, Accenture and, closer home, Infosys. And the list of companies junking the bell curve is only growing….

So what is the bell curve? Simply put, the bell curve is a tool based on a statistical model with ‘forced’ rankings which aligns a small set of people rated as ‘hyper-performers’ on one extreme with an equally small set of people ranked as ‘very low performers’ on the other extreme with the balance majority being rated ‘average’ performers. Graphically plotted this results in a bell shaped curve with the two extremes being the ‘outliers’ and the bulk ‘average’ performers forming the rump of the curve. It is for this reason it’s detractors disparagingly dismiss it as the ‘rank and yank’ practice!

To be sure, bell curve has its merits and is useful in companies with very large employee base where it helps to identify out performers and the laggards who are then singled out for special treatment-out performers for out sized rewards and laggards being shown the door!

However, the biggest criticism of the bell curve is that it requires the appraising supervisor to ‘force fit’ his/her team members into ‘out performer’, ‘average’ and ‘laggard’ categories inevitably leading to subjective biases creeping in and generating a lot of unnecessary tension and heart burn come appraisal time in companies which follow this system.

As rightly pointed out by it’s critics, the bell curve based system fosters unhealthy competition as it limits the number of high performers assuming, as it does, that most people are ‘average’ performers with very few being ‘out performers’. In other words, some high performers get pushed out of the top bracket simply because there’s no space for them!

With the nature of work itself changing, with much greater emphasis on teamwork, collaboration across geographies and time zones, highly compressed time-to-market cycles and need for constant innovation in real time, even very large companies foster multi disciplinary project based teams which come together for a specific project. Fostering a climate of innovation, team spirit, comfort with ambiguity are hence key challenges for management leading many organizations to experiment with innovative approaches focusing on encouraging and rewarding teamwork and collaboration.

In conclusion, one may say, the bell curve has had its moment in the sun and it is time to move on to a more humane and transparent recognition and reward system, which is more in tune with contemporary business realities.

I will discuss contemporary approaches to employee assessment, keeping in mind the changed business context due to disrupting technologies and ever-increasing globalization, in subsequent blogs.

Leave a Reply