Understanding Bell Curve Appraisals: How Do Financial Companies Cluster Employees?

Does anyone know how companies cluster their employees using the bell curve appraisal method, especially in financial companies? If so, could you please provide some insight or relevant links to answer my question?

Thank you,

Regards,
Fachrul
HR Staff

Thanks, Ankita. And then, I was grouping employees in the bell curve system based on what? Are they grouped in a single unit, division, or the whole company? Thanks.

Grouping Employees in the Bell Curve System

Ideally, it should be done with people across geographies with the same or similar roles. However, most companies group together employees in the firm regardless of job roles. Many factors sometimes come into play, and it's important to note that every firm is different, just like every individual. They say one man's food is another man's poison, and the same is true for firms as well. I suggest gathering information but not blindly following anyone's suggestion.

Can you help me with the following questions:
- What is the employee strength, and are there any branches or is it a single-branch firm?

Regards.

Questioning the Use of Normal Distribution in Employee Clustering

Your question asks "how" the clustering into a normal distribution should be done. A more important question is: Should clustering into a forced normal distribution be done at all?

The first question is based on the assumed "fact" that employee performance will be normally distributed with performances varying from -3 to +3 standard deviations across the spectrum. If it is found that performance does not adhere to the normal distribution curve (NDC), then it should be corrected by applying a forced distribution.

In the case of performance ratings, it is also assumed that ratings which are not "normally" distributed are somehow the fault of the managers or supervisors who did the ratings, i.e., "easy/lenient" raters or "tough/harsh" raters (or the effect of "halo" in the ratings done). The fact of the matter is that employee performance need not (and probably is not) normally distributed. It is much more likely that the tails of the distribution are uneven with a greater bunching on the left (low end) and a tail to the right extending much more than the assumed 3 standard deviations.

In summary, it is likely that a small proportion of employees contribute a lot more than the rest. Alternatively, a large proportion don't contribute much at all. It is unlikely, however, that the power distribution approach suggested here would be adopted rather than the normal distribution approach. The latter is likely to be regarded as "fairer" and a lot easier to defend because of the axiomatic status of the NDC in management and behavioral sciences.

Employee Ranking and Bell Curve Appraisal

An employer has 20 employees managed by two managers, Manager A and Manager B. Manager A has 10 direct reports who are all exceeding their goals. Manager B has 10 direct reports, none of whom are exceeding their goals. Should all 20 employees be lumped together and then ranked 1 to 20? Should each manager's 10 direct reports be ranked 1 to 10? If yes, is that fair to all employees, both managers, and the employer?

If an employer hires employees so that employees' job performances fit a bell curve, then maybe a bell curve could be used. But what should we do if all employees are long-term successful employees who exceed their goals and make money for the employer? Bell curve ranking makes sense if hiring successful employees is more of a random event than a planned event, i.e., the top 10-15% exceed their goals.