Understanding the 'Bell Curve' in Performance Appraisal
A 'Bell Curve' is a statistical indicator of the distribution of appraisal scores of employees in an organization. Ideally, each Head of Department/Function should have access to this curve concerning employees of their department/function. The purpose is to normalize the scores at their own level. This normalization considers all the Managers who are lenient in rating their subordinates (meaning a rating of 8 to 9 out of 10 is given to all) and the Managers who are too harsh/conservative (meaning rating all employees in the range of 4 to 6 points). Unless these rating tendencies are normalized, some good employees placed under harsh managers may be at a disadvantage compared to their counterparts reporting to lenient managers. Thus, normalization helps in removing subjectivity and can be done easily if Bell Curves are readily available.
In some organizations, each Manager is given online access to the Bell Curve for his/her own subordinates and is expected to rationalize the scores before forwarding the appraisal reports to the next higher level of reporting. This enables normalization at the origin.
The final normalization takes place at the company level when appraisals of all employees are received by HR. A 'Bell Curve' for the complete organization is seen, and its statistical mean and deviation are determined. These parameters are correlated to those at the Functional/Departmental level, and the aberrations are addressed through a consultative approach. This requires a high level of maturity of an organization's HR processes since the outcome is eventually used for the grant of increments and/or performance-linked variable pay.
The entire process discussed above requires an automated HR environment. Effective tools such as 'EmpXtrack' are available in the market today to enable the 'Bell Curve' approach to performance evaluation becoming realistic.
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