Friday, December 5, 2014

Is it a death time for Bell Curve?- A view from HR discussion

I am thankful to Ashish Gakrey from MTHRGlobal and Capgemini for adding me to whatsapp group HR Shapers. Finally, there is something where whatsapp can be used for knowledge and productivity. The topic, I am reproducing here (as a transcript of the discussion) which is self explanatory.

For me, Bell Curve is an outdated tool and good only for the oganisation where you need to decide termination at mass level. It cannot be performance measurement tools. I agree to following statement from an article from The Forbes Magazine

"Research shows that this statistical model, while easy to understand, does not accurately reflect the way people perform. As a result, HR departments and business leaders inadvertently create agonizing problems with employee performance and happiness."

Human performance has no relevance to bell curve model. The claim that every organisation has specific number of super performers and equal no of under performers and rest are average performers has no logical backing. (10-80-10; as the bell curve model suggest). 

Here is the discussion.

3 Dec 00:07 - : Welcome guys...

3 Dec 06:44 - : Thank You Ashish

3 Dec 07:05 -: Welcome Falguni & Sakina looking forward for good sharing...

3 Dec 08:06 - : Good morning to all current members and admin of HR shapers
3 Dec 08:07 - : Here is 2day topic guys...
3 Dec 08:08 - : 1. Philosophy of the Bell curve in performance appraisals
2. It's relevance. ... whether it is really required

3. How can it be convincingly communicated to employees...

3 Dec 08:12 - : Let me make a bold statement here - philosophy of bell curve is outdated. Thats what most of the companies feel so

3 Dec 08:14 - : Agree Aniket......many cos getting away wid bell curve concept slowly-slowly...

3 Dec 08:15 - : My thoughts- 
Bell curves definitely encourages to reward top performers and provide opportunities to improve bottom one. 
We share this information pro actively with employees and set expectations. As we have adopted  continuous  performance appraisals/ promotion model. It is helping us substantially and communication becomes easier. 
Also with changing business scenario pyramid structure is going away. Good number of customers are looking for resources as individual contributor with solid experience. Customers pay premium rates as well for such resources. 

Its good to identify bottom performer and provide them opportunity to improve instead of exit. We may hold their increments till they improve.

3 Dec 08:15 - : Yesterday we spoke abt PIP, Poor Performance n all. If there were no poor performer's, then Bell Curve would be of no use. But even if all are good performers, thanks to bell curve, FORCED Ranking is done.

3 Dec 08:15 - : In most  of the organisations I have worked for bell curve is not taken very kindly by the business.

3 Dec 08:15 - : the bell curve is a way of thinking and provides a simple framework on ranking perf. The question largely is around, shud it be rigid, forced, loose or conveniently applied. All of us use a balance approach and the bell doesnt look like a bell most times. As long as it helps u to pull up the rider of efficiency year on year.. We have achieved the objective. Poor line manager conversations will create problems in communication and hence needs to he neatly tied up with LMs on the communication piece

3 Dec 08:15 - : If they are getting away from traditional bell curve.... Then wat is the next best industrialised tool to rank

3 Dec 08:15 - : Yes internal ranking is done but with a lot of reluctance and there has been a pressure to rank down exiting employees rather than the existing ones.

3 Dec 08:16 - : @sujaya. Agreed... There a lot many instances like this where some employees get targetted. But if u see the variance btw self assessment rating & manager assessment rating, you will also see employees not being objective of thier own perf.

3 Dec 08:16 - : N I m also trying to understand how. Bell curve is so ingrained in our minds that frankly even I at times cannot fathom appraisals without it

3 Dec 08:17 - : Ali..that's where co n HR has 2 come up wid other innovative process etc bcoz bell curve is misused n not serving purpose...

3 Dec 08:19 - : Agree Ashish the grassroot prob is managers effectiveness in understanding the importance of a effective performance appraisal and the overall bell curve... There is bucket full of biasness

3 Dec 08:20 - : And managers not going 2b in discipline mode ever...

3 Dec 08:24 - : Bell curve when used blindly can add a negative mindset within the organisation about performance management process.

Bell curve automatically falls in place when goals and mid year reviews are done regularly. 
If bell curve is considered blindly then one can't say that the organisation has a performance driven culture.

3 Dec 08:24 - : In term of its relevance it is required which helps to differentiate your various performers...when gets link  to your monetary benefits

3 Dec 08:27 - : But it has nothing 2do wid increment n promotion..those decision taken separately wid again in bias..

3 Dec 08:30 - : However, I strongly believe that it needs to be re-read and re-interpreted again... i am sure many cos are doing that incl the ones that i was associated in the past

3 Dec 08:30 - : The linkages with the business and employee investments need to be relooked into

3 Dec 08:50 - : True..

3 Dec 08:52 - : Agreed. But till we get the right process we may have to go ahead with the bell curve in organisations. Having said that some may term it as unfair but knowing the business model / revenues we may need to categorise top performers/ performers who are at expectation level/ pip cases.

3 Dec 09:07 - Govind Sharma: I do not agree to bell curve's philosophy that only a specific percentage of employees are top performer and similar no of employees are non performer and rest are average who are majority its too subjective. For me, it may be used in a factory or such kind of set up but in any modern organization it has lost its relevance. I agree to Ashish, it has nothing to do with the promotion and increment. I think a KRA/ KPI is a more suitable way of PMS for increment and promotion decision. I agree to Aniket too.

3 Dec 09:21 -: @aakash to know top performers you don't need a curve. All that is required is an objective measurement criteria that can tell you who your key performers are. Keeping bell curve till we have right process doesn't apply here.

3 Dec 09:22 -: If there is an objective measurement your poor performers are easily identifiable

3 Dec 09:22 - Govind Sharma: Agree. KRA and its measurement is enough to know top performers. I give more preference to management by Objective let people measure on the basis of objective they achieved

3 Dec 09:29 - : Agree to know performer u need KRA...but 2 differentiate best out of best...u need bell curve rating criteria...
3 Dec 09:33 - Govind Sharma: Thanks Ashish, can you cite a few examples how the bell curve helps to find best amongst good

3 Dec 10:09 - : Govind..bell curve normally come out of normalization of rating where we know one manager can rate his team member outstanding for x work where as another manager can rate his team member average are above average and that's where differentiation has 2b understood n thought through within team to boss, super boss n HR....

3 Dec 10:21 - : Bell curve depends on the maturity of the organization and depends on how the managers rate their subordinates

3 Dec 10:22 - : There r chances that some of the managers are too protective on their team and do notwant to expose themselvess by rating low to their team.

3 Dec 10:23 - : When u forced rank u need to identify the cream so that they r not poached by other companies

3 Dec 12:00 - : Stats may not be a true indicator of performance

3 Dec 12:01 -: As HR Professionals we need to bring a better mechanism that lets managers ensure proper rating for visible performance
3 Dec 13:56 - : Thanks Sujata for such sensitive topic

I am sure many here, maybe also in favour of the SEMI Bell Curve

In order to maintain pressure on optimum level and morale at a high level 

I believe this is quite possible, but not very easy for the company which is shrinking year on year basis

3 Dec 13:56 - : In my opinion a bell curve is nothing new and provides an opportunity to distinguish based on performance. Take for example when we went to school. We had periodic assessments, term exams, class quizzes, project work and end term exams and we were finally provided a rank in class based on a culmination of all the above assessments on how we performed. We normally did not feel surprised with our rank at the end of the year as we were constantly aware of our performance through the year. If you were in the bottom of the class you were counselled by the teacher and some extra attention came from her/ him for you to improve. If you were on top of the class appreciation and some extra responsibility came your way. All this was done in a non threatening atmosphere where the teacher's objectives were to ensure maximum kids learnt and as an acknowledgement passed out. While the students at the bottom felt sad and bad, they knew why they were there and most tried to improve. Now shift the scenario to work, if the manager acts like a teacher to ensure that he/she reaches the objectives, makes it clear to the team, constantly provides feedback to them through the year rather than just one at the end of the year, counsels low performers and encourages high performers to reach the objective, then bell curve or ranking flows smoothly into the equation with no issues at the end of the year with no surprises for anyone. Acceptability also increases. And the tool achieves what it is to achieve. In my opinion, in the absence of anything different or better to differentiate, the bell curve is here to stay and it is for each one of us and the professionals in the workforce to use it in the right spirit.
3 Dec 13:56 - : Agree with Varadarajanji for this balance thought process....only Q remain that considering gen y n their aggressive approach...v need to come up with better tool, process n system.

3 Dec 13:56 - : @varadarajan... That's a really great analogy and an objective view on bell curve.  We can also look at the GPA process in B-schools with a similar methodology. But that clearly promotes competition entirely over collaboration

3 Dec 13:56 - : Bell curve is not always the right method for appraisals. Most of the times managers misuse it.

3 Dec 13:56 - : Not sure on why we consider Gen Y to be aggressive. I would change it to expressive. Also, they would lap it up if they are given constant feedback on how they are doing

3 Dec 13:57 - : Yup, more expressive and assertiveness better word..
3 Dec 13:57 - : I think the bell curve is an important tool to ensure that employees have some basic pressure to perform. Besides, let's not forget its direct linkage to talent programs.leadership development programs...bonus / PI payouts etc. It forces business to assess performance objectively and differentiate between employees it would otherwise not have done...very high level of maturity is needed overall in a system to actually do away with a bell curve. Most orgs do not force 5% associates to be belled down and are OK with even 2% since they give ranges to the managers to play within. On a 5 point scale the last 2 ratings are both impacted in different ways thereby enabling the org to meet its budgets as well.
3 Dec 13:58 - : Superiors are superiors and they have explanation for everything, but when they don’t have any valid justification, they refer the matter to HR.

The supervisor also referred the employee to HR. When employees went to the HR Manager, she actually had no explanation either. The performance management system was established in the company almost few years back on the recommendation of some top consultant. When the system was implemented the circumstances were different, however there were no changes in the performance management system.

Above story is common in corporate world. Almost everybody follows the similar performance management system, same KRA and KPI system; based on “What should be achieved”. Some organizations add the element of “How it should be achieved” by introducing some competencies, capabilities and behaviour where they make the system more equivocal. At the end of the year. Off course they also don’t forget to classify their employees in forced distribution. By doing this all, they don’t even consider the nature of their business. At the end of the year, it becomes just one of the rituals and tool for giving salary hike to beloveds in the hand of line managers. You can see the examples where business is not doing well, but employees in team are rated excellent. Most of the times, HR is clueless as usual. Line managers are more smarter than HR to adjust any HR system as per their convenience.       

Deloitte consulting had published the research on global HR trends and clear cut assumption is related to performance management. It says,:    

“Today’s widespread ranking- and ratings-based performance management is damaging employee engagement, alienating high performers, and costing managers valuable time.

Only 8 percent of companies report that their performance management process drives high levels of value, while 58 percent said it is not an effective use of time.

Leading organizations are scrapping the annual evaluation cycle and replacing it with ongoing feedback and coaching designed to promote continuous employee development.”

We need the system where employee would be evaluated but also be fairly evaluated. However the system should be in align with your organizational business and culture. If your business needs more teamwork and collaborative thinking, you may have to choose the combination of team based and individual based targets and complimented by bahviour, but if your business needs “daily bout” like FMCG segment or media marketing,  you may choose to have more focus on individual targets.

I am not saying the whole performance management should be replaced, but we need to take the holistic approach as per the business need and cultural context of the organization.   

Also read Performance Rating Or Quota System....

3 Dec 13:58 - : I think the most important drawback of using the Bell curve is that it cannot account for individual behavior and traits. This is true for any model used where people are part of the system. In all such cases the conventional models fail to stand the test of time.

3 Dec 13:58 - : Take the example of ADP...they rate employees on an upto single decimal number on a scale between 1-10. Based on that years budget Managers are told to ensure an avg rating of say (example) around 6.1 /10. This gives them the opportunity to assess and differentiate between every resource an be extremely objective. They can rate some as 2 and others as 10 based on result achievement. There may also be others who are all between 5 and 7 with a closer grouping...therefore while there is no bell curve per set the org still force fits them to achieve budgetary targets and announces promotions eligibility etc for those rated above 7.5 or 8.

3 Dec 13:59 - : If HR doesn't know then they have to be responsible for it and suffer!

3 Dec 13:59 - : See also remember most HR folks tend to mixup Performance
Management and Performance Assessment and use PMS loosely when I fact Bell curve is part of the PA process and overall a tool within the PMS framework of the organization

3 Dec 13:59 - : PA has to be objective...competency based segment etc are parallel process which can be included in PMS...the most effective tool in this case would be the 9 block grid since that identifies separate action plans for performance and potential and doesn't mix up the two like the 5 point scale does...managers judgment is clouded and they don't know whether the rating is for performance or for potential to perform

3 Dec 14:00 - : Managers always rate team members in view of potential to perform...

3 Dec 14:00 - : This is a little random but would you also rate different teams on a bell curve?

3 Dec 14:00 - : Bell Curve is a big B'S in my view. It only serves the purpose of the business leaders. It creates barriers within teams and manager an subordinate...defeats the very purpose of performance appraisal. For ages....CEOs have used it to promote their own agendas. It's wrongly implemented and HR should own the implementation which rarely happens.

3 Dec 14:00 - : Using bell curve as a RANKING tool is fine, but forcing the RATINGS to a normal distribution curve is grossly unfair and it can be misused.

3 Dec 14:00 - : We never force the ratings and we have seen some teams have a right-handed curve while some may have a left-handed curve. As long as we are able to justify that with the overall business performance, it should be fine. If not,then there is intervention to review the ratings.

3 Dec 14:00 - : Since this practice is going on for some years, the instances of intervention have reduced and the distribution of individual performance mat hes the team performance by and large.

3 Dec 14:00 - : Bell curve is gud only when the parameters and all conditions are same...then the output is comparable...

3 Dec 14:01 - : Forced ranking has no meaning

3 Dec 14:01 - : Managers should place mphasis on hw ones quality, productivity and morale cn be improved...rather than doing comparative assessments

3 Dec 14:04 - : Would lime to share 2 snippets from VUCA conference

3 Dec 14:04 - : In NHRD conference Adil also said the same thing

3 Dec 14:04 - : They are also moving away from bell curve

3 Dec 14:05 - : Shiv, CEO Pepsico, mentioned that learning  organizations can sustain in the long run only with  equal focus on top and bottom performers, constant communication, hand holding and tolerance towards failures is important.. The ceiling and floor has to move together.

3 Dec 14:05 - : I heard about a concept called snap ratio ..few days back..we all discussed the same topic. .had shared some pics from a book on it..
It's like..there is no fixed % defined for any level...but a predefined snap ratio is shared...for eg 3.5 which is called as magic it means...the % of number above mid divided by % of number below min..

Eventually this snap ratio has to be organization level..
There is much documents on Web gor can get to hear this in Robert mosely's session on cnb

3 Dec 14:05 - : Mr. Venkateamanan from L&T mentioned that VUCA has always been there and they were able to gear up by letting go the bottom x percentage gracefully... This ensures elimination of complacency...He stressed on organizations ability to communicate and manage this well as the key to success

3 Dec 14:05 - : My own experience ...productivity peaked in our organized station during 08-09 recession as everyone was afraid if loosing their jobs..

3 Dec 14:05 - : To put the views from DD, vardgarajan, KV and shiv... Bell curve if used well is a great performance enhancement tool as it would keep complacency at bay. The approach should be developmental rather than punitive.

3 Dec 14:06 - : It has to be managed well to jeep the impact to the minimum... Positive when really low performers are asked to leave as everyone has a level playing ground... Negative if it is not managed well and when there is poor  communication which leads to a negative impact on morale of the ones left behind.. Take an example from sports/ army... The team is as good as the weakest link...Weak players are either repositioned , sent to training or fired....but how this is handled is very important...and if it is dine well it would lead to greater understanding a bonding and h

3 Dec 14:07 - : Some input fm group I...

3 Dec 14:09 - : i m having less experience on this subject but the discussion gives me a great input on this.

3 Dec 14:15 - : Yup share to learn n learn to share..

3 Dec 19:05 - : Thank u all members for ur time n input for today topic...if any member wud like to contribute more or left out ..feel free to do...looking fwd..

Dec 19:43 - : Hearty thanks to start  with  valuable learning.

3 Dec 20:48 - ‪: Thanks. Excited to be part of this vibrant group.✌
3 Dec 20:50 - ‪: Welcome to all fellow HR professionals­čĺÉ
3 Dec 20:51 - ‪: Good discussion.  Lots of learning.

I hope you enjoyed the article. 

Please comment.

December 05, 2014

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