Bell Curve In Performance Appraisal - CiteHR
Tsivasankaran
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Shijit
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Ed Llarena, Jr.
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Jayaseelanganeshan
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Puneessn
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Prativa
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Hi All,
1. Do anybody have any idea about Bell Curve in Performance Appraisal..
If anyone is working with some organisation where this bell curve method is applied for the performance appraisal,then please share some information...
2. What is Forced Ranking method..in Performance Appraisal..
3. How employees know that the rating changed bcoz of forced ranking in bell curve...about their performance appraisal
Please Reply...I need the support from the experienced HR people.....
as I dont have much practical knowledge ....
Regards
Prativa

Hi

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.

Hope, I make some sense

Siva

Hi,
Thanks a lot for sharing the information...
But as you mentioned it is applicable in GE,I know it.
I am working with GE from last 3 years and I came to know about this Bell curve strategy this year performance appraisal..
How can a person know that what rating has been given by the manager and how the HR people change the rating to keep the curve in a bell shape.
How the HR people change the rating..
Are they discuss it with the manager or they do it by themself...
Managers need to share it with the employee whose rating is going to change further bcoz of forced ranking or it is not needed..
There are 4 ratings...Outstanding,Superior,Meet Exepectation and Need Improvement
The %age is..
O : 20%
S : 30%
ME : 40%
NI : 10%
how this %age give a bell curve..
As it is very unrealistic issue..could you please keep a transparent idea about it..
Thanks & Regards
Prativa

Hi

There are two questions you have asked.

1. How this % form a Bell Curve?

2. Whether HR does this on their own or whether Managers are involved?

Question 1

Look at 40% and 30% Meets expectation and Superior. They together form 70% Outstanding of 20% and and lower performance of 10% make the other two sides of the curve. Now this will make a decent bell curve.

You may now ask, why these two mid points. Retention and sourcing is a major issue today. Supply of these professionals is less than the actual demand. Hence some adjustment need to be done. Consider a situation where supply and demand are equal, then organisations will follow this percentage perfect. Of supply is more and demand is less, adjustment will be made accordingly.

Question 2

It is a major policy issue in any organisation and HR can not and will not and should not do on their own. Normally a steering committee decides the percentage.If the ratings are skewed, then the HR shall return all the forms for reconsideration. They highlight the percentage norms and request the Managers to correct and send them back. If the variation is minimal, they sit and resolve. HR s role is to highlight the Policy and ensure that policy is maintained. If some variation is to be done, it is referred to the steering committee. I firmly believe that we should not tell the employees that the rating is reduced because of the Forced Ranking. It is reality. Any alternative step one takes to communicate the employee will only lead to confusion and employees will lose confidence in your appraisal system. For example, one year, we can tell an employee that this method has brought him down, But for how many employees you will tell this reason? If this is repeated the next year, what will you tell him?

To sum up

1. Market position will decide the percentage but 20/70/10 will remain more or less constant.Some adjudtment will be made on this 70% which is dependant on market conditions.

2. HR certainly will not do on their own and consult the managers. HRs role is not about individulas here but implementing the policy correct

Am I clarifying little better this time??

Siva

Hello Prativa:
A normal curve, i.e., bell curve, is not useful for performance appraisals.
Employees need to know if they exceed expectations, meet expectations or fail to meet expectations and then they need to know how to exceed expectations.
If all employees exceed expectations, the employer should be very pleased. However, an arbitrary bell curve will assign some successful employees to the bottom category which is misleading, counterproductive and useless.
Where there are unsuccessful employees we need not look beyond management for the reason.
Bob Gately

Hi Shiv, Can i get your email id. I have certain clarifications on Industrial Trianee and Management Trainee. would like to clarigy. As i’m doing the Process and Procedure. Regards, Manjula.
Hello Shiv
Warm Wishes
Read the explanation you have given for Bell curve. Honestly quite well written. Seems you have got good number of years of experience in the same.
Thanks for sharing your knowledge base.
Regards
Nishtha.

Dear Nishta
Thank you for your comments
Honestly I had been working on this for the past 7 years buy could not succeed completely I can give many reasons. But i was working with less than 150 employees and this did not work well
and these employees are know and had experience of more than 10 years in that co
Any way i am looking for an opportunitry to work on a similare project as it is one of my favourite subjects
Siva

hello..friends...
it is a pity that the so called great companies claiming they are world class and in fact care nothing for their employee...
it is one such process this bell curve by GE...
actually it is done to eliminate people from their organization...
and for that they do all these forced ranking...
and in the end you hace to find a scapegoat for all the failures...
and as Edward Deming rightly said America is the country that misuses /abuses the entire gamunt of HR...

Siva,
You told it is difficult to do bell curve for small number of people like 50 -100 or 200. In our org we have many teams and each team is individually making one bell curve. Is that not wrong.
Bell curve is made for each Team, each Process, each project, each vertical and then on the whole org.
My point is that when u tell more than 200 we should see based on each process (if it has headcount more than 200) and not to split on teams, where bell curve will not be a perfect one. Coz i have seen 2 people with same points 3.25 (one in higher range and and one in lower range)
also let me know how to classify people for bellcurve rating. Should we take the seniority or the process expertise


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