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Many organizations today use a bell curve for performance evaluation processes. They reward a small percentage of top performers, encourage a large majority in the middle to improve, and lay off the bottom performers. Companies believe that such a pay-for-performance system encourages employees to perform better. The question we explore in this paper is: does the system increase the overall performance of the company over time? We observe that pressure, if maintained below a certain level, can lead to higher performance. However, with layoffs, constant pressure demoralizes employees, leading to a drop in performance. As the company shrinks, the rigid distribution of the bell curve forces managers to label a high performer as mediocre. A high performer, unmotivated by such artificial demotion, behaves like a mediocre. Furthermore, managers begin to reward visible performance over the actual. Finally, the erosion of social capital could cripple the company. We recommend the use of a semi-bell curve where someone who performs like a top performer is rewarded as one. Additionally, we recommend balancing pressure and morale. We recognize that such a balance is very difficult to strike and can be successfully achieved only by decoupling the issue of layoffs from the performance evaluation process, to some extent.