Performance grading on a bell curve means that in a company, all employees’ performance is distributed along a bell curve. When you use a bell curve for categorising your employees, you divide them into ‘top performers’, ‘average performers’ and ‘poor performers’. HR sings paeans about the effectiveness of using the bell curve to identify the calibre of the employees. The reasoning that HRs give is that it becomes easy to reward the top performers, goad the average performers to put in extra effort while identifies low performers so that a different action plan can be given to them to improve their performance. What are the disadvantages of using the bell curve to grade your employees?
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There are instances of employees being given specific gradients so that the bell curve requirements are satisfied. I had a professor in my b-school who made us redo a test because our marks did not reflect properly as a bell curve. Her accusation was that we did not perform the test in a fair manner while we argued that it was an easy test. It is a forced rating system that does no good other than classifying employees.
Let’s say you have five employees in the same department; you need to grade them using the bell curve method. You would have to give an excellent rating to one person, another person gets a poor rating, and the other three will get an average rating. This might not be the case because there are chances that all of them are top performers or average performers, but with bell curve grading, it has to be evenly distributed. This leads to lack of morale.
Performance appraisal using the bell curve will create a sense of uncertainty in the minds of the employees who have been graded badly because they might assume that in a tough job market, they would be the first ones to be fired. This would lead to a loss in morale and even poorer performance at the workplace.
Once you grade the employees based on a bell curve, it is difficult to maintain the sanity of a team. A higher ranked employee might behave bossy in front a lower ranked employee. The way we work these days is also changing rapidly. It is not wise to stick to standards that were followed years ago. There will not be a factor called team spirit as it is shrouded with disbelief and mistrust. You certainly do not want to spend a lot on hiring, do you?
These forced rankings insult the intelligence of the employee who has been graded as the low performer. The employees who are in the ‘average’ section, feel under appreciated. Think of it this way. How can there be a uniform percentage of people in each grade? There are chances that an average employee has been shifted to the under-performing group because of the need to show it as a perfect bell curve result. This will also lead to a high attrition rate because people are always of the impression that they will be shown the door at the slightest mistake.
Companies like Adobe and Microsoft have changed their grading system. They realise that bell curve grading discourages collaboration and doesn’t help in productivity. Indulge in a grading system where the employees are assessed based on their record with themselves and with their team work.
Instead of indulging in regressive policies like grading on a bell curve, you need to look at how are goals set, who tracks them. Do you want to know who performs well? How was a particular task done? Is there consistency across all the areas of work? Are they good team players? Are the assessments spot on? Is there a feedback system for both the employer and the employee? Is there a redressal system where the needs of the employees are addressed?