Dear All,
It's that time of the year when we in HR have to hand over increments and pink slips to performers and non-performers. I have been rather uncomfortable with the concept of branding employees as non-performers, as there are factors that affect employee performance over which the employee has no control. These factors are not considered when making decisions about increments or handing over pink slips. Therefore, I have been trying to find an alternative to the Bell Curve that does not categorize employees based on such issues.
Seeking Alternatives to the Bell Curve
My dear friends, I seek your opinions and valuable experiences on different approaches other than the Bell Curve that you have either followed or are aware of as part of the performance appraisal. Your views will be of great help to me and others who also feel the need for an alternative approach besides the Bell Curve.
Thank you.
From India, Mumbai
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8It's that time of the year when we in HR have to hand over increments and pink slips to performers and non-performers. I have been rather uncomfortable with the concept of branding employees as non-performers, as there are factors that affect employee performance over which the employee has no control. These factors are not considered when making decisions about increments or handing over pink slips. Therefore, I have been trying to find an alternative to the Bell Curve that does not categorize employees based on such issues.
Seeking Alternatives to the Bell Curve
My dear friends, I seek your opinions and valuable experiences on different approaches other than the Bell Curve that you have either followed or are aware of as part of the performance appraisal. Your views will be of great help to me and others who also feel the need for an alternative approach besides the Bell Curve.
Thank you.
From India, Mumbai
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Dear Anuradha, in the course of my training programs, occasionally, my participants (who were managers) complained about the limitations of the Bell Curve. They mentioned that in their team, if they had five "Very Good" employees but only four vacancies for "Very Good," the fifth employee had to be pushed down to "Good" by force. They expressed that this process was quite painful.
Against this backdrop, when I provide consulting services on Performance Management System (PMS), I advise my clients to rate employees on a scale of 100 and categorize them into various performance slabs. These slabs could range from > 85%, 76 to 85%, 66 to 75%, etc.
For example, if a company has 100 employees, the breakdown could be:
> 85%: 30
76 to 85%: 40
66 to 75%: 20
Below 65.9: 10
Salary increments can be given based on the performance slab. This method helps in eliminating the bottom-level employees and ensures that employees do not harbor disgruntlement for being rated in a lower performance slab.
For further details, feel free to contact me.
Thanks,
Dinesh Divekar
[Phone Number Removed For Privacy-Reasons]
From India, Bangalore
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Against this backdrop, when I provide consulting services on Performance Management System (PMS), I advise my clients to rate employees on a scale of 100 and categorize them into various performance slabs. These slabs could range from > 85%, 76 to 85%, 66 to 75%, etc.
For example, if a company has 100 employees, the breakdown could be:
> 85%: 30
76 to 85%: 40
66 to 75%: 20
Below 65.9: 10
Salary increments can be given based on the performance slab. This method helps in eliminating the bottom-level employees and ensures that employees do not harbor disgruntlement for being rated in a lower performance slab.
For further details, feel free to contact me.
Thanks,
Dinesh Divekar
[Phone Number Removed For Privacy-Reasons]
From India, Bangalore
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Dear Dinesh,
This is a good idea that you have mentioned. But at the end of the day, the slabs are another way of giving grades. I can do it also within the Bell curve by giving the topmost A+, A, B+, B, and C.
Do you have any idea if the 9-box can be incorporated into the bell curve in some way? That way, I feel the person, even though at a lower grade now, can be nurtured.
Regards, Anuradha
From India, Mumbai
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This is a good idea that you have mentioned. But at the end of the day, the slabs are another way of giving grades. I can do it also within the Bell curve by giving the topmost A+, A, B+, B, and C.
Do you have any idea if the 9-box can be incorporated into the bell curve in some way? That way, I feel the person, even though at a lower grade now, can be nurtured.
Regards, Anuradha
From India, Mumbai
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Dear Anuradha,
You have written that "But end of the day the slabs are another way of giving grades." Here, my views are different. The manager does not give any grade as such, but then the employee earns it. Secondly, as in the "Bell Curve," there is no forced ranking as such.
Introducing the 9 Box Matrix
You wanted to introduce the "9 Box Matrix." However, it may be noted that this is again an individual-centric approach. The success of PMS depends on the organization-centric approach. I have a few examples where the PMS is made people-centric and how the organization paid for it. Whatever method you choose, the organization should not suffer because of it. Call me on my mobile, and I shall tell you a few instances of how PMS was self-defeating.
Thanks,
Dinesh Divekar
[Phone Number Removed For Privacy-Reasons]
From India, Bangalore
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You have written that "But end of the day the slabs are another way of giving grades." Here, my views are different. The manager does not give any grade as such, but then the employee earns it. Secondly, as in the "Bell Curve," there is no forced ranking as such.
Introducing the 9 Box Matrix
You wanted to introduce the "9 Box Matrix." However, it may be noted that this is again an individual-centric approach. The success of PMS depends on the organization-centric approach. I have a few examples where the PMS is made people-centric and how the organization paid for it. Whatever method you choose, the organization should not suffer because of it. Call me on my mobile, and I shall tell you a few instances of how PMS was self-defeating.
Thanks,
Dinesh Divekar
[Phone Number Removed For Privacy-Reasons]
From India, Bangalore
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Dear Dinesh, I have certain queries regarding your post. You suggested, "The manager does not give any grade as such, but the employee earns it." However, in a 180-degree approach, the final grades are given by the manager. Therefore, regardless of the employee's self-assessment, the achievement level at the end of the day, in most cases, is determined by the reporting manager, either with the employee's approval or discontent. Thus, from an employee's point of view, I can't see it any differently from a forced ranking unless the organization unquestionably accepts the employee's achievement level.
I am in a dilemma as to which approach is better: an employee-centric or organization-centric one, considering my company is a service-oriented company with an emphasis on individual contribution. I am also trying to understand how an organization-centric Performance Management System (PMS) will benefit an employee. It seems paradoxical when we aim for a fair PMS with a positive impact on employee performance without keeping it employee-centric.
I am curious to know if this kind of approach would be beneficial in a service-sector company or a manufacturing company. Your insights have raised some questions that I have presented here.
Thanks, Anuradha
From India, Mumbai
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I am in a dilemma as to which approach is better: an employee-centric or organization-centric one, considering my company is a service-oriented company with an emphasis on individual contribution. I am also trying to understand how an organization-centric Performance Management System (PMS) will benefit an employee. It seems paradoxical when we aim for a fair PMS with a positive impact on employee performance without keeping it employee-centric.
I am curious to know if this kind of approach would be beneficial in a service-sector company or a manufacturing company. Your insights have raised some questions that I have presented here.
Thanks, Anuradha
From India, Mumbai
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It is not prudent to follow the percentages mentioned as follows:
- Above 85%: - 30
- 76 to 85%: - 40
- 66 to 75%: - 20
- Below 65.9: - 10
This approach will not drive performance and does not align with the fact that any organization will have a maximum of 30-35% great performers who typically propel the organization forward. Giving 70% of the people a rating of 4 or 5 will result in higher employee costs.
Even high-performance companies have a maximum of 50% top 2 level performers in the above category. Therefore, the "exceeding expectations" category should be capped at 15%, "sometimes exceeds expectations" at 20%, and "meeting expectations" at 45-50%.
Regards
From India, Thiruvananthapuram
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- Above 85%: - 30
- 76 to 85%: - 40
- 66 to 75%: - 20
- Below 65.9: - 10
This approach will not drive performance and does not align with the fact that any organization will have a maximum of 30-35% great performers who typically propel the organization forward. Giving 70% of the people a rating of 4 or 5 will result in higher employee costs.
Even high-performance companies have a maximum of 50% top 2 level performers in the above category. Therefore, the "exceeding expectations" category should be capped at 15%, "sometimes exceeds expectations" at 20%, and "meeting expectations" at 45-50%.
Regards
From India, Thiruvananthapuram
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Dear Mr. John P. Daniel, it appears that you are considering a return to the "Bell Curve." In this model or any other, we must design the performance slabs. However, my previous point was not to enforce forced fitment within these slabs. Instead, I suggested measuring the actual score and leaving it as is. This approach provides a clearer picture of each individual's performance and the distribution across different performance slabs.
Otherwise, paragraph-wise replies to your post are as follows:
This approach will not drive performance and does not align with the fact that any organization will have a maximum of 30-35% great performers, who typically propel the organization forward. If you assign 70% of the people a 4 & 5 rating, the organization will face higher employee costs.
Reply: Along with the higher employee cost, it will reduce the cost of under-performance. Obviously, the latter is more significant compared to the former.
Even high-performance companies have a maximum of 50% top 2 level performers in the above category. So, the "always exceeding expectations" category can be a maximum of 15%, "sometimes exceeds expectations" can be 20%, and "meeting expectations" can be 45-50%.
Reply: Why should we not have all employees scoring above 85%? Those scoring less drag down the organization's performance. Companies like Google or Microsoft remain competitive by retaining only the highest-performing employees. For example, in a garment factory, tailors were categorized as 'A,' 'B,' and 'C' grade. When a new Factory Manager took over, she started replacing 'C' class tailors with 'A' class tailors. Over time, the workforce consisted of about 90% 'A' grade tailors and 10% 'B' grade tailors. This configuration significantly reduced the Cost of Poor Quality (COPQ) and increased factory productivity.
Hope I have clarified my point now.
Thanks,
Dinesh Divekar
[Phone Number Removed For Privacy-Reasons]
From India, Bangalore
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Otherwise, paragraph-wise replies to your post are as follows:
This approach will not drive performance and does not align with the fact that any organization will have a maximum of 30-35% great performers, who typically propel the organization forward. If you assign 70% of the people a 4 & 5 rating, the organization will face higher employee costs.
Reply: Along with the higher employee cost, it will reduce the cost of under-performance. Obviously, the latter is more significant compared to the former.
Even high-performance companies have a maximum of 50% top 2 level performers in the above category. So, the "always exceeding expectations" category can be a maximum of 15%, "sometimes exceeds expectations" can be 20%, and "meeting expectations" can be 45-50%.
Reply: Why should we not have all employees scoring above 85%? Those scoring less drag down the organization's performance. Companies like Google or Microsoft remain competitive by retaining only the highest-performing employees. For example, in a garment factory, tailors were categorized as 'A,' 'B,' and 'C' grade. When a new Factory Manager took over, she started replacing 'C' class tailors with 'A' class tailors. Over time, the workforce consisted of about 90% 'A' grade tailors and 10% 'B' grade tailors. This configuration significantly reduced the Cost of Poor Quality (COPQ) and increased factory productivity.
Hope I have clarified my point now.
Thanks,
Dinesh Divekar
[Phone Number Removed For Privacy-Reasons]
From India, Bangalore
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We are a company of around 25-30 people, comprising two major fields: Operations and IT field. Kindly advise on how to implement a Bell Curve appraisal system and what other alternatives exist. I would appreciate your candid views.
From India, Dehra Dun
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From India, Dehra Dun
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Bell Curve - Forced Distribution
Forced distribution is essential for differentiating between poor and excellent performers. The bell curve is particularly useful when cost factors are considered, as it highlights the necessity of differentiation. Without it, poor performers may not improve. If a poor performer does not show improvement, they should be moved out of the system. This approach is clear and straightforward.
9 Box Matrix
The 9 Box Matrix is primarily used for succession planning and talent management. It can be applied to appraisals but has limitations, such as how to rate an employee's potential.
Long Tail Method
This method is more beneficial and less harsh on employees and HR. It suggests that 80% of an organization's achievements are due to 20% of employees, categorizing them into Hyper Performers (20%), Good Performers (70%), and Non-Hyper Performers (10%). As HR professionals, we must identify and develop Hyper and Good Performers. Some employees are naturally gifted Hyper Performers, while others can be developed from Good to Hyper Performers through coaching, training, and mentoring.
Essential Elements for Performance Management
1. SMART Goals - Linked to BSC or FAST Goals, which are Frequently Discussed, Ambitious, Specific, and Transparent.
2. Robust Appraisal System - Includes half-yearly reviews.
3. Buy-in from Top Management and Heads of Departments.
Regards,
Indrajeet Sengupta
[Phone Number Removed For Privacy-Reasons]
From India, Mumbai
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Forced distribution is essential for differentiating between poor and excellent performers. The bell curve is particularly useful when cost factors are considered, as it highlights the necessity of differentiation. Without it, poor performers may not improve. If a poor performer does not show improvement, they should be moved out of the system. This approach is clear and straightforward.
9 Box Matrix
The 9 Box Matrix is primarily used for succession planning and talent management. It can be applied to appraisals but has limitations, such as how to rate an employee's potential.
Long Tail Method
This method is more beneficial and less harsh on employees and HR. It suggests that 80% of an organization's achievements are due to 20% of employees, categorizing them into Hyper Performers (20%), Good Performers (70%), and Non-Hyper Performers (10%). As HR professionals, we must identify and develop Hyper and Good Performers. Some employees are naturally gifted Hyper Performers, while others can be developed from Good to Hyper Performers through coaching, training, and mentoring.
Essential Elements for Performance Management
1. SMART Goals - Linked to BSC or FAST Goals, which are Frequently Discussed, Ambitious, Specific, and Transparent.
2. Robust Appraisal System - Includes half-yearly reviews.
3. Buy-in from Top Management and Heads of Departments.
Regards,
Indrajeet Sengupta
[Phone Number Removed For Privacy-Reasons]
From India, Mumbai
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Bell Curve Appraisal Tool.doc
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