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Hi Llrena

Thanks for the comments.

I was giving a few examples of what is happening in the initial stages.

I did mention that Bell curve is not a performance appraisal system. It is a tool.

I do agree that ranking is critical.

I was consciuously mentioning about three ratings. From my experience in India, there is a tendency to add plus and minus on their own by the rators.Especially the organisation starting PMS will face this issue in India. The management will specify 5 ratings syay A,B,C,D,and E.

HR will receive the following ratings.

A+,A,A- B+ B B- C+ C C-, D+ D D- E+E and E-. I may be exaggeratting a bit but many HR professional In india will agree with me.In fact, in an Organisation where I was working, it took two years to educate the rators on this alone.Ultimately it required a firm stand by the Top management, any plus or minus rating will be treated as same!!

Seven to nine categories will be alright after ranking the employees. There were some personal queries to me. and I clarified these issues.

Thanks once again

Siva

From India, Chennai
I have drawn a bell curve with ten ranges, often called a STEN Graph.
Each * represents one employee if there are 200 employees to be assigned to a bell curve.

01 (2.5%) *****
02 (4.5%) *********
03 (9.0%) ******************
04 (15.%) ******************************
05 (19.%) **************************************

---------- 50th percentile -----------
06 (19.%) **************************************
07 (15.%) ******************************
08 (9.0%) ******************
09 (4.5%) *********
10 (2.5%) *****

From United States, Chelsea
Hi Bob,
Nice . But what I understood from the initial question, is how we actually relate the Bell Curve to PMS.
Bell curve is not a tool for PMS and it is a major tool for linking Performance appraisal system to Rewards. In reality, let us admit , this is where it has its maximum use.
If the ratings fall in a bell curve and the rewards do not,then the purpose of the BELL CURVE is defeated.
Siva

From India, Chennai
Hello Siva:

>Nice.<

Thanks.

>But what I understood from the initial question, is how we actually relate the Bell Curve to PMS.

We don't.

>Bell curve is not a tool for PMS and it is a major tool for linking Performance appraisal system to Rewards. In reality, let us admit , this is where it has its maximum use.<

It has little to no use in performance management but it does give poor managers something to hide behind.

>If the ratings fall in a bell curve and the rewards do not, then the purpose of the BELL CURVE is defeated.<

There is no purpose to using a Bell Curve other than it looks good and it is easy.

Reward employees as individual contributors as well as members of their immediate work group and overall organization.

Employees need to know if they exceed, meet, or fail to meet expectations and why.

Employees then need to know how to meet and exceed expectations and they'll need to be coached, trained, mentored and managed well to become successful. The bell curve does not help at all.

Using a bell curve is all about making life easy for managers who do not know how to manage effectively.

If all employees exceed expectations, then the bell curve is a waste of time and misleading.

If all employees meet expectations, then the bell curve is a waste of time and misleading.

If all employees fail to meet expectations, then the bell curve is a waste of time and very misleading since the problem is with management not the employees.

Come to think of it when there are employees who are less successful than expected we need to look the employees' supervisors and their managers and the executive team.

Bob Gately


From United States, Chelsea
Siva, Bob, et al.

If the Bell Curve has no better use other than what you guys are trying to say in your posts, organizations would have dropped them long time ago.

But the fact that they are still with us despite its worldwide criticisms, then there must be something in it that some of us don't see and understand.

Siva's concept of performance ratings falling along with the Bell Curve is wrong and is part of a very old misconception. This thing happens only in organizations that makes the curve an appraisal tool.

Organizations continue to use the Bell Curve because it is an effective tool in:

1) rationalizing and justifying budget limitations in dispensing rewards to top performers within the organization; and,

2) justifying immediate or future disciplinary actions to poor performers.

As Bob mentioned, in a mature and highly motivated organization, it is possible that majority of the employees can perform "outstandingly" (O). Without the Bell Curve, the expected management action for an outstanding promotion is either a promotion and/ or cash award or both.

In the same manner, without the Bell Curve, everyone that performs badly must be given the appropriate sanction.

But because the reality in almost all organizations (anywhere in the world) is that they operate based on budget and uses the principle of "operational convenience", not everyone can be promoted and/ or given cash reward. Not everyone can also be punished because when so many perform badly, any drastic disciplinary action (DA) implemented can seriously affect business operations.

As such, organizations must find a way to justify why only a certain quantity of the outstanding performers at a given time will have to be promoted and why not all poor performers will have to be punished.

The Bell Curve is the best tool that provides the scientific, logical, and legal justification. Why? The reasons are as follows:

1) The Bell Curve is considered scientific because it uses the assumptions of statistical science;

2) The Bell Curve is logical because it is correct to assert that the best among the best can still be identified by simply comparing them and ranking them;

3) The Bell Curve is generally legal because it provides a clear methodology and shows a fair procedure adapted for the management action taken.

Of course the Bell Curve (and top management) will never say that the bottom line for the use of the tool is that it is able to implement things within the allocated budget for the given performance period.

Best wishes.

Ed Llarena, Jr.

Managing Partner

Emilla Consulting


From Philippines, Parañaque
Really.............this is a very new thing for me. I never been heard about it. This is very knowledgeable information. Thanx & Rgds
From India, Mumbai
Hello Ed:

>If the Bell Curve has no better use other than what you guys are trying to say in your posts, organizations would have dropped them long time ago.<

I would hope so but ineffective practices are all too frequently still used by managers. For instance some hiring managers use the MBTI for employee selection but the MBTI publisher says the MBTI should not be used for employee selection.

>But the fact that they are still with us despite its worldwide criticisms, then there must be something in it that some of us don't see and understand.<

It is easy and it is fast and it takes no thought what so ever. I think that is why it is still used by those who don¡¦t really want to do the work of managing.

>Organizations continue to use the Bell Curve because it is an effective tool in:

1) rationalizing and justifying budget limitations in dispensing rewards to top performers within the organization; and<

Like I said it is easy to use a Bell Curve to ¡§rationalizing and justifying budget limitations in dispensing rewards to top performers¡¨ but that does not make it an effective management tool unless by effective we mean it minimizes the work of managers.

>2) justifying immediate or future disciplinary actions to poor performers.<

If supervisors wait until the annual bell curve is developed to justify corrective actions, then that is an indictment of the supervisors, the managers and the executives.



>¡K without the Bell Curve, everyone that performs badly must be given the appropriate sanction.<

In that case the managers need appropriate sanctions rather than the employees.

>But because the reality ¡K is that they operate based on budget and uses the principle of "operational convenience", not everyone can be promoted and/ or given cash reward.<

Yes, of course, but employees don¡¦t need to be told that they are in the bottom 75% to justify their not getting promoted or a big bonus. Unless an employee knows where they are on the Bell Curve the Bell Curve is irrelevant to them.

>Not everyone can also be punished because when so many perform badly, any drastic disciplinary action (DA) implemented can seriously affect business operations.<

Yes and the DA needs to be applied to management not the employees. Managers either hire problem employees and/or tolerate problem employees. Management creates the problems or tolerates the problems therefore management gets the employee behaviors they create or tolerate, i.e., they deserve the employee behaviors they get.



>As such, organizations must find a way to justify why only a certain quantity of the outstanding performers at a given time will have to be promoted and why not all poor performers will have to be punished.<

The answer to that problem is a word That All Leaders Know--TALK .

And the talk must occur when it is needed not on a schedule such as annual reviews.

Supervisors must talk with their staff so that the employees know what they are doing right and what they are doing wrong and how to correct their mistakes. Using a Bell Curve prevents TALK.


>The Bell Curve is the best tool that provides the scientific, logical, and legal justification. Why? The reasons are as follows:<

But it is misused. Why do employers use the MBTI for employee selection? It is fast, it is cheap and it is gives the impression of scientific accuracy, it appears to be logical, and users presume it is legally justifiable.

>1) The Bell Curve is considered scientific because it uses the assumptions of statistical science;<

There is no science involved in using the Bell Curve but scientists do use statistics.

>2) The Bell Curve is logical because it is correct to assert that the best among the best can still be identified by simply comparing them and ranking them;<

It is not logical to me since it does not help managers improve the job performance of their direct reports.

Employers may train many employees at one time but employees need to be managed one at a time.


>3) The Bell Curve is generally legal because it provides a clear methodology and shows a fair procedure adapted for the management action taken.<

Where do the numbers come from? Who decides the numbers? How fair and accurate are the numbers?

>Of course the Bell Curve (and top management) will never say that the bottom line for the use of the tool is that it is able to implement things within the allocated budget for the given performance period.<

You mean it makes it easier for management? :wink:

Thanks for a thoughtful reply and your position is far more common and acceptable than mine.

Trying to correcting your managers on such issues will only lead to conflict so wait until you are in a position to make the change yourself if you think using a Bell Curve is counterproductive.

Bob Gately


From United States, Chelsea
I totally agree with Bob.Altough I am a new manager, while I do not find any logic and fairness in applying bell curve.



According to me if we have under performers in team in any organizations, we should try to improve their performance by identifying their areas of opportunities. And even if after continuous coaching things will not work, then anyway in almost all the organizations we have different rating structure, which will vary from 0-30%. Mostly under performers will get 0-5% based on company's policy for one particular year and will be given chance to improve their performance for next year. It is not that they don't want to perform, it is that they are not able to perform even after efforts and it is managers responsibility to coach the.



Also if internal targets are set and individuals are able to meet same, while not able to exceed their peer group (average), we should not penalise them for same.



Forced rating is something which will create big pressure on individuals to perform extremely well at all times even though if they are meting their targets, this may lead to stress, health problems and in turn will affect performance.



In my organization they have started applying now, but I do not feel any sense in same. Also many of the managers are discussing monthly ratings and applying forced rating on monthly basis, which will again create a pressure on individuals from beginning. Also if an individual will come to know that s/he is not able to perform for 6 months, it means anyways they will not get anything at the end of the year, then why to perform for next six months.



Can anyone tell me why organizations are applying forced rating? I think only to



1) increase profits or

2) may be they feel that managers are not identifying real under performers, which lead to giving the more %age of increment. (for e.g. if in a team of 15, two individuals are not performing well will get at the end of the year 0-5% and if managers are not identifying properly end up giving them 5-15% increment).



I am really new to this, please explain me so that if given a chance at some point of time, I will be able to explain clearly to my peers and higher management.



Regards,

Shiv D

From India, Visakhapatnam
Bob, please find my comments to your reactions:

I would hope so but ineffective practices are all too frequently still used by managers. For instance some hiring managers use the MBTI for employee selection but the MBTI publisher says the MBTI should not be used for employee selection.

Comment:The use of certain tools, theories, techniques, systems, etc. in managing and/ or running organizations is an entirely the prerogative of individual managers. The perception of whether they are good, bad, effective, or inefective is subjective to the individuals concerned. Some things that others may consider good or effective may not be to you. In the absence of an internationally accepted standard or matrix, whom can we beleive as having the better perspective and judgment.

>But the fact that they are still with us despite its worldwide criticisms, then there must be something in it that some of us don't see and understand.<

It is easy and it is fast and it takes no thought what so ever. I think that is why it is still used by those who don¡¦t really want to do the work of managing.

Comment: I don's agree with your perception that the Bell Curve is very easy to understand and that it can be done fast. The fact that so many inquiries are posted in this site shows that a lot of people don't know what it is, its purposes & objectives, and how to use them. As a matter of fact, in a parallel discussion of this topic, someone said they implemented the Bell Curve as a performance tool that they really determined the exact quantities of performers per rating according to the prescribed quantities or percentages assigned by their management.

>Organizations continue to use the Bell Curve because it is an effective tool in:

1) rationalizing and justifying budget limitations in dispensing rewards to top performers within the organization; and<

Like I said it is easy to use a Bell Curve to ¡§rationalizing and justifying budget limitations in dispensing rewards to top performers¡¨ but that does not make it an effective management tool unless by effective we mean it minimizes the work of managers.

Comment: I am not a supporter nor an advocate of the Bell Curve and Forced Ranking. What I said is simply my explanation of how I understood its usefulness to organizations after many years of implementing it in one of the companies that I worked for before.

>2) justifying immediate or future disciplinary actions to poor performers.<

If supervisors wait until the annual bell curve is developed to justify corrective actions, then that is an indictment of the supervisors, the managers and the executives.

Comment: The real intent of periodic/ annual appraisals, and even of PMS, is not to substitute, delay, or postpone the corrective actions of managers/ supervisors. Supervisors and Managers are expected to do their jobs daily. Their day to day jobs is tosupervise and manage people. And managing includes teaching, coaching, and implementing corrective or disciplinary action when warranted.

Periodic and/ or annual appraisals can be compared to the major or quarterly exams in many schools. While teachers are free to use short quizzes and oral exams to validate students' learning in a particular subject anytime within a semester, they are mandated by the school to let all the students undergo periodic or quarterly major examinatins.

Why? The major periodic or quarterly exams in many schools worldwide is not just a scheme to re-measure the students' learning. From the school owners' view, it is an effective tool in compelling parents to pay for the unpaid tuition fee balances of their kids.

>¡K without the Bell Curve, everyone that performs badly must be given the appropriate sanction.<

In that case the managers need appropriate sanctions rather than the employees.

>But because the reality ¡K is that they operate based on budget and uses the principle of "operational convenience", not everyone can be promoted and/ or given cash reward.<

Yes, of course, but employees don¡¦t need to be told that they are in the bottom 75% to justify their not getting promoted or a big bonus. Unless an employee knows where they are on the Bell Curve the Bell Curve is irrelevant to them.

Comment: I think you should understand the Bell Curve from the point of view of business owners. When you do, then you will gladly show the curve to every employee that will complain why they did not get their expected promotion and/ or cash reward.

Those who use the Bell Curve in such a manner that ratings are changed as a consequence of the forced ranking, they deserve to be told and be made to understand the entire process. Otherwise, those who were shown their initial high ratings by their immediate supervisor will curse and accuse their supervisors of lying if they will not be promoted and given cash rewards for the ratings they initially saw.

>Not everyone can also be punished because when so many perform badly, any drastic disciplinary action (DA) implemented can seriously affect business operations.<

Yes and the DA needs to be applied to management not the employees. Managers either hire problem employees and/or tolerate problem employees. Management creates the problems or tolerates the problems therefore management gets the employee behaviors they create or tolerate, i.e., they deserve the employee behaviors they get.

Comment: You have a unique way of seeing and understanding things differently in organizational environments. You are incorrect but entitled to your own negative views.

>As such, organizations must find a way to justify why only a certain quantity of the outstanding performers at a given time will have to be promoted and why not all poor performers will have to be punished.<

The answer to that problem is a word That All Leaders Know--TALK .

And the talk must occur when it is needed not on a schedule such as annual reviews.

Supervisors must talk with their staff so that the employees know what they are doing right and what they are doing wrong and how to correct their mistakes. Using a Bell Curve prevents TALK.

Comment: Same as above.

>The Bell Curve is the best tool that provides the scientific, logical, and legal justification. Why? The reasons are as follows:<

But it is misused. Why do employers use the MBTI for employee selection? It is fast, it is cheap and it is gives the impression of scientific accuracy, it appears to be logical, and users presume it is legally justifiable.

Comment: Please see my first comment.

>1) The Bell Curve is considered scientific because it uses the assumptions of statistical science;<

There is no science involved in using the Bell Curve but scientists do use statistics.

Comment: I said that "it uses the assumptions of statistical science". The Bell Curve is the "normal distribution curve" in statistics. That's why it is able to camouflage its real motives.

>2) The Bell Curve is logical because it is correct to assert that the best among the best can still be identified by simply comparing them and ranking them;<

It is not logical to me since it does not help managers improve the job performance of their direct reports.

Comment: You must study logic to improve your perception and understanding of things around you. Things are not necessarily wrong when they don't fit your mindset and/ or agree with your ways of looking at things.

Employers may train many employees at one time but employees need to be managed one at a time.

Comment: Your real exposure must have been in very small organizations whose employees do not reach thousands.

>3) The Bell Curve is generally legal because it provides a clear methodology and shows a fair procedure adapted for the management action taken.<

Where do the numbers come from? Who decides the numbers? How fair and accurate are the numbers?

Comment: There is a popular maxim in capitalist societies that runs this way: HE WHO HAS THE GOLD RULES!

>Of course the Bell Curve (and top management) will never say that the bottom line for the use of the tool is that it is able to implement things within the allocated budget for the given performance period.<

You mean it makes it easier for management?

Comment: I said that many organizations are managed using the principle of "operational convenience" or "expediency".

Thanks for a thoughtful reply and your position is far more common and acceptable than mine.

Trying to correcting your managers on such issues will only lead to conflict so wait until you are in a position to make the change yourself if you think using a Bell Curve is counterproductive.

Comment: Hired guns in organizations are simply implementors of the business owners. You are FREE to implement the mandates of the shareholders. Otherwise,you have to get out and create your own organization and manage it the way you want it. But for as long as you are employed, your only option ti to follow the rule!



Best wishes!

Ed Llarena, Jr.

Managing Partner

Emilla Consulting


From Philippines, Parañaque
Shiv, please find my comments below:

<I totally agree with Bob.Altough I am a new manager, while I do not find any logic and fairness in applying bell curve.

Comment: I also do not agree with all the assumptions and theories behind the use of the Bell Curve. But unlike you and Bob, I can understand and see the logic of this tool from the point of view of organizations, business owners, and/ or top management.

<According to me if we have under performers in team in any organizations, we should try to improve their performance by identifying their areas of opportunities.

Comment: I agree with your understanding of the supervisor and manager's job. Please read my earlier comment on Bob's latest reply before your post. Try to read my comparison of periodic/ annual appraisals with that of major quarterly exams in schools so you will understand better.

<And even if after continuous coaching things will not work, then anyway in almost all the organizations we have different rating structure, which will vary from 0-30%. Mostly under performers will get 0-5% based on company's policy for one particular year and will be given chance to improve their performance for next year. It is not that they don't want to perform, it is that they are not able to perform even after efforts and it is managers responsibility to coach the.

Comment: Rating structures and performance standards are essentially internal to organizations. They can be designed in any manner to suit organizational goals and objectives. All you need is to communicate them, explain them clearly so they will be understood, and implement them consistently so confusions and problems will be minimized.

<Also if internal targets are set and individuals are able to meet same, while not able to exceed their peer group (average), we should not penalise them for same.

Comments: The action that managers can take within organizations depend entirely on company policy. You cannot implement something that is not within your internal rules. You cannot also implement a policy differently from how other managers are doing it just because you happen to have a different way of looking and understanding things around you.

<Forced rating is something which will create big pressure on individuals to perform extremely well at all times even though if they are meting their targets, this may lead to stress, health problems and in turn will affect performance.

Comment: Any system, methodology, or tool that is not properly explained and understood will always create tension and pressure upon individuals, esp if such tools/ systems will have direct impact on monetary rewards and/ or promotion.

<In my organization they have started applying now, but I do not feel any sense in same. Also many of the managers are discussing monthly ratings and applying forced rating on monthly basis, which will again create a pressure on individuals from beginning. Also if an individual will come to know that s/he is not able to perform for 6 months, it means anyways they will not get anything at the end of the year, then why to perform for next six months.

Comments: When an organization implements a directive or mandate from top management, everyone is generally expected to comply and support. You are lucky if you will be given the option to do otherwise.

<Can anyone tell me why organizations are applying forced rating? I think only to

<1) increase profits or

Comments: There is no concrete link between an organization's profitability and the Bell Curve. However, if you view its ability to limit cash rewards to a minimum quantity desired, despite a huge actual number of "outstanding performers" in a given period, then top management/ shareholders are successful in limiting the reduction of the operational income that they will divide among themselves.

<2) may be they feel that managers are not identifying real under performers, which lead to giving the more %age of increment. (for e.g. if in a team of 15, two individuals are not performing well will get at the end of the year 0-5% and if managers are not identifying properly end up giving them 5-15% increment).

Comment: Again, let me say that there is no hard and fast rule on the quantities assigned in each segment of the Bell Curve. The percentages you are mentioning are internal and unique to your own organization.

<I am really new to this, please explain me so that if given a chance at some point of time, I will be able to explain clearly to my peers and higher management.

Comment: I am wondering why you said your organization is already implementing it, and yet you seem to be not well informed about it. Don't you think that the right thing to do is to ask your superiors first to explain and convince you what they are implementing in your organization now?

I would just be happy to visit your organization should you feel that there is a need for your people to understand more the Bell Curve and Forced Ranking that you are implementing now. Maybe, we can even teach you a better way of doing things by implementing it together with a good PMS.

Best wishes.

Ed Llarena, Jr.

Managing Partner

Emilla Consulting




From Philippines, Parañaque

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