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Already there is a psot on this subject and I have given my reply I am reproducing the same
Quote:
Forced ranking is a procedure that requires managers to assign employees into predetermined groups according to their performance, potential, and promotability..
The best know company following this procedure is General Electric.
They sort the employees into three groups.: a top 20% on whom rewards ,promotions and stock options are showered; a high performing middle 70% with good futures; and a bottom 10%. The bottom 10% is unlikely to stay.
Some other Companies:
Microsoft, Cisco Systems,HP,EDS,Pepsi Co and Sun Microsystems.
What all these systems have in common is the requiremnt of comparison of people in addition to conventional performance appraisal..
Managers must place each person into one of a limited number of categories with a fixed percentage assigned to each one.
In India the pioneers to introduce was Murugappa Group in late 1980s.
If you understand this, your doubt on Bell Curve will get answered. To make it more clear, after the performance appraisal, the numbers should fall in a bell curve...top 20%at one end, 70% in the middle and bottom 10% at the other end of the curve and the curve will look like a Bell.
It is incorrect to say that any adjustment is made. Actually no adjustment is made. Manager may rate all his employees say in category A to please all. How do we correct this. The principle to correct this derived from the concept of Forced Ranking based on well known statistical maxim....Uniform Distribution. or Normal Distribution.
I hope I make some sense. I have been part of Murugappa Group and that is where I learned this. I also tried to implement in one or two companies but not with much success .The failure was basically due to very small numbers I was having in different companies. This works well when you have large number of employees to be rated. In small numbers, say for 50 to 100 or even 200, this may not work perfect as you may not get a perfect bell curve.
Once the appaisals are done & ratings submitted it the system, the rating go through a normalisation process to ensure that overall ratings are in the form of a bell curve (eg on a rating of 1-5), maximum emplyees must fall at a rating of 3, similarly not more than 10% at a rating of 1 & 5.
Eg If an apprasiee is at 4.8 rating & the system has exceeded its quota of 5 rating with employees having 4.9 & 5.0 ratings, the rating of the appraisee with 4.8 is considered as 4 so that the curve is not deshaped
The ratings can be viewed by the appraisee only after the normailisation is done.
I work with TCS & this system is successfully implemented in my org
Personally I am completely against the implementation of Bell Curve appraisal system in India. It had considerable success in the west because of the work culture followed by corporates there.
In India we tend to have a more emotional approach and hence such an implementation could seriosly hamper the name of the company in the Candidate and Graduate Market.
Three major flaws I see in this system are:
a) This system is implemented department wise instead of the entire employee database and hence there are chances that the worst in some departments are much better than the average in other departments but still they are forced to leave.
b) When this system is implemented in a department where the performance has been very good and the company cant afford to fire the lower 10% the bonuses and the raise in salary is quite less compared to other departments and hence sooner or later the firm seems the top 20% leave because they are not happy with their respective packages.
c) This system alongwith improving the top performers in your company would also attract hyper competitive nature among employees and hence resulting into a dysfunctional working environment in the same department.
d) The trainees are generally the ones who get fired.
Now for the implementation:
Its generally based on three levels of performances the top 20 is extraordinary the mid 70% is ordinary but the backbone of the company and the rest 10% are the guys who are worthless and cant be trained and hence are fired if the performance doesnt improve for three consecutive years.
The appraisal system is done department wise and The respective line managers are supposed to rate employees into these three groups.
The candidate who is not able to come out of the lower 10% for two/three years is then fired.
I hope the above clears all doubts on drawbacks and implementation of bell curve appraisal system
Will have to agree that the bell curve with a few tweaks can be very fruitful. Please check the attachment for a better implementation of tweaked bell curve appraisal system.
Thanks for sharing such an information on the Bell curve Methodology.I tried with your guidelines as a test run but for random, data Analysis icon is not there in Tools. Kindly guide me on this.
I'm Robert Bacal, author of a number of performance management books published by McGraw-Hill. This is a topic of interest to me, since I'm absolutely AGAINST the use of the bell curve. A number of companies, including Microsoft have stopped using it, and there have been some successful lawsuits in the USA.
