In the course of my training programmes, occasionally my participants (who were Managers), complained about the limitations of the Bell Curve. They told that they told that in their team if they have five "Very Good" employees but if the vacancies for "Very Good" are four then the fifth has to be pushed down to "Good" per force. This was they said that a painful process.
Against this backdrop, when I provide consulting services on Performance Management System (PMS), I tell my client to rate the employee on a scale of 100 and let them be covered in the various slabs of performance. The slabs of performance could be like > 85%, 76 to 85%, 66 to 75& etc.
Suppose if a company has 100 employees then the break up could be:
> 85% : - 30
76 to 85% : - 40
66 to 75% : - 20
below 65.9: - 10
The salary increments can be given based on the performance slab. This method helps in eliminating the bottom-level employees. Secondly, the employee does not carry disgruntlement for having rated in lower performance slab.
For further details, feel free to contact me.
This is a good idea that you have mentioned.
But end of the day the slabs are another way of giving grades. I can do it also with in the Bell curve by giving the top most A+ A, B+ ,B and C.
Do you have any idea if the 9 box be incorporated in the bell curve someway. That way I feel the person eventhough at lower grade now can be nutured.
You have written that "But end of the day the slabs are another way of giving grades".
Here my views are different. The manager does not give any grade as such but then the employee earns it. Secondly, like in "Bell Curve", there is no forced ranking as such.
You wanted to introduce "9 Box Matrix". However, may it be noted that this is again individual-centric approach. The success of PMS depends on the organisation-centric approach. I have a few examples when the PMS is made people-centric and how organisation paid for it. Whatever method that you choose, the organisation should not suffer because of it. Call me on my mobile and I shall tell you a few instances of how PMS was self-defeating.
I have certain queries here to your post.
Here you suggested "The manager does not give any grade as such but then the employee earns it" but in 180 degree approach the final grades are given by the manager so no matter what the employee gives himself the achievement level end of the day in most cases ,the reporting manager prevails either with the employee's approval or discontent! Thus from an employee point of view I cant see it any different from a forced ranking unless the organisation accepts without question the achievement level of the employee.
I am in a dilemma as to what approach is better an employee centric or organisation centric since my company is a services oriented company with emphasis on individual contribution.
Also I am trying to understand how organisation centric PMS will actually benefit an employee. It seems dichotomous when at one point we want the PMS to be fair with a positive effect on employee performance but not keeping it employee centric.
I just want to know if this kind of approach will be beneficial in a service sector company or in a manufacturing company.
Your learned views have raised some questions which I have put up here.
I recommend making PMS centric to the organisation because I have seen cases wherein employees' backs were patted at the expense of the organisation. Nothing is paradoxical than this.
In my previous post, I have written that typing the whole thing is difficult. Therefore, you may give a call and seek clarification.
It is not prudent to follow the % mentioned a(> 85% : - 30 76 to 85% : - 40 66 to 75% : - 20 below 65.9: - 10 ).
This approach will not drive performance and doesnot gel with the fact that any organisation will have a max of 30-35% great performers and they normally take the organisation forward.If you give 70% of the people 4&5 rating, that organisation is going to have higher employee cost.
Even high performance companies have max 50% top 2 level performers inthe above category . So always exceeding expectation category can be max 15%, some timesexceeds expectation can be 20% and meeting expectation can be 45-50%.
It appears that you are going back to the "Bell Curve". In the bell curve or otherwise, we have to design the performance slabs. However, what I had written was not to do forced fitment in the slab. What I meant was to measure the actual score and leave as it is. If you do this, then it gives us the actual picture on who stands where and actually how many persons fall in what performance slab.
Otherwise, paragraph-wise replies to your post are as below:
This approach will not drive performance and does not gel with the fact that any organisation will have a max of 30-35% great performers and they normally take the organisation forward. If you give 70% of the people 4&5 rating, that organisation is going to have higher employee cost.
Reply: - Along with the higher employee cost, it will reduce the cost of under-performance. Obviously, the latter is more compared with the former.
Even high-performance companies have max 50% top 2 level performers in the above category . So always exceeding expectation category can be max 15%, some times exceeds expectation can be 20% and meeting expectation can be 45-50%.
Reply: - Why we should not have all the employees who do not have a score is > 85 %? Those who score anything less drag the performance of the organisation. Companies like Google or Microsoft have remained competitive because they just keep highest-performing employees.
Let me give an example of one of the garment factories. In the factory, the tailors are categorised as 'A', 'B' and "C' grade. When a new Factory Manager took over, she started removing 'C' class tailors and starting substituting only with 'A' class tailors. Over a period of time, there were about 90% 'A' grade tailors and 10% 'B' grade tailors. With this configuration of the workforce, it reduced the Cost of Poor Quality (COPQ) in a big way and productivity of the factory increased.
Hope I have clarified my point now.