Before the implementation of the Bell Curve Appraisal System, Please ensure the following,
a) Use of objective parameters for the performance appraisal system.
b) Determine the reason for poor performance of the employee if there is any.
c) Let the employee take responsibility for improved and only offer your assistance if needed.
d) Document all the performance related discussions with the employee because generally the bell curve system attracts a lot of law suits by fired employees in the west and hence its better to have all the discussions documented for your and your company's safety.
Now the following came across to me during a discussion with a friend, he used to work for ABB and hence the practise followed by ABB is just awesome a smart solution to the bell curve appraisal system.
The main business strategy of ABB all over the world is customer focus. It aims to achieve it through TQM, time-based management and supply management. ABB has four business segments in India comprising about 30 independent business areas. Each business area operates like an independent company with its own strategic plans and budgets. Teamwork is central to the achievement of ABB's strategy. Traditionally, ABB's performance appraisal system focused on individual performance and results, and its compensation system rewarded high performers. Although eminently logical, this system of appraisal and compensation discouraged teamwork, which was the prime requirement for a customer-focused strategy. ABB has changed its appraisal and compensation system to foster teamwork. There are nine aspects to the current system: -
Change of nomenclature: The present system is called the developmental appraisal, not performance appraisal. This emphasizes the role of appraisal in promoting individual learning and development.
Planning the job for the following year: This provides role clarity and builds a common understanding between the individual and the team leader.
Counseling for development: Counseling is an integral part of the appraisal system emphasizing openness and disclosure.
Team performance: The individual's contribution to team performance is of major importance.
Process parameters: Process parameters with emphasis on quality, customer focus and systems form the core of the appraisal.
Training: The appraisal system is used to identify the training needs for individuals and teams.
Focus: The appraisal system has a single focus, namely development of individual and teams.
Client-centered: The developmental appraisal system is exclusively client-oriented. There is no complex web of procedures with perforated sheets and flow charts maintained by the human resource department. The forms remain with the team leaders and team members.
Label-free ratings: There is no overall rating with labels such as 'outstanding', 'good', and 'average'.
ABB has also developed a system of compensation for its managers that promotes team effort. In ABB, a business area, which is roughly equivalent to a strategic business unit (SBU), is judged on certain performance parameters. Based on the performance of the business area, the team members in that particular business area receive a percentage of the basic pay and allowance as lump-sum payment. All members of the same grade receive exactly the same percentage. Performance parameters include both qualitative and quantitative indicators. Quantitative parameters include orders and profits. Qualitative indicators include factors such as on-time delivery. The company classifies individuals into three categories: -
Group A includes those who perform far below expectations with special counseling being provided to such individuals.
Group B consists of ideal performers with performance exceeding the expectations of the organization. They are given non-financial rewards in addition to flat equal increments.
Group C comprises individuals who perform strictly according to expectations. All of them receive exactly the same amount of bonus and increments.
To summarize Bell curve by itself is strict no according to my opinion but a few tweaks and this should be the best solution.