Everything in the world is distributed normally.
You have 100 women - 10 are beautiful, 10 are ugly-looking, and 80 are average-looking.
You have 100 men - 10 are hardworking, 10 are lazy, and 80 are average.
You have a population of 100 - 10 are intelligent, 10 are mentally retarded, and 80 are average.
Apply this principle in performance.
You have 100 employees - 10 are super performers, 10 are poor performers, and 80 are average performers.
In Performance appraisal with a 5 rating, we can classify people as:
A Super performers (5%)
B Good performers (10%)
C Performers (70%)
D Average Performers (10%)
E Poor performers (5%)
You can decide the percentage with little modification, but C rating should be more than 60%.
Performance appraisal has two elements:
1. Has he or she performed with reference to the targets?
2. How has he or she compared with others in the organization?
Assume all have achieved the targets. How do you then differentiate?
This comparison helps.
After receiving ratings, HR applies normalization, and the Bell curve helps here.
Siva