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Bell Curve Method of Performance Appraisal
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“In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment” - Charles Darwin. This rule is applicable for any “person”, be it a business entity or an individual. The companies to prove their competency in the highly competitive market, has to come up with innovative ways of resource management. With employees being a strong determinant of the company’s performance, various performance appraisal techniques are introduced into the system to analyse the individuals’ share to the company’s objectives.

Bell curve system of appraisal is a forced ranking system imposed on the employees by the management. Forced ranking has been defined as “a workforce management tool based on the premise that in order to develop and thrive, a company must identify its best and worst performers, then nurture the former and rehabilitate and / or discard the latter” - SWlearning. Bell curve system rates the entire workforce by comparing the performance of those engaged in similar activity and ranking them on the basis of their performance. The entire workforce is segregated as the top performers, medium performers and the poor performers. The percentile varies with the company policy; it could be the top 10%, middle 80% and the bottom 10%.

The employees belonging to the higher grade contribute significantly to the enterprise. They are showered with rewards like restricted stock options, bonuses, etc so as to motivate them to continue their excellent services to the business entity. The middle percentile employees are significant in number and their presence ensures uninterrupted work flow within the organisation. They generally have some weakness which is negated by the training facilities offered by the company. Similarly training is also provided to enrich their key skills to utilise in a way profitable to the entity. The bottom ranking consists of those whose performance needs significant improvement and whose is unsatisfactory. The ranking acts as a warning system that tells the employee where he stands in relation to his peers. The employees belonging to the lower strata are at times given the opportunity to improve their efforts or are renounced from the system.

The bell curve system of appraisal provides the momentum to the employees to push them forward, aiming higher. This system also states the criteria that are essential to drive the organisation forward. For instance, it is stated that GE has identified 4E’s as the measuring standards, namely, high energy level, the ability to energise others towards the company’s goals, the edge to take crucial yes/no decisions, and the skill to execute and deliver the promises on time. These standards help the company to recognise the key talents who contribute to the overall objective of the organisation.

The greatest disadvantage of the system is that it is dependent on the supervisors who judge the capability and contribution of the employee. The supervisor is to keep a day-to-day physical record of the favourable and unfavourable tasks performed by the employee. But as it is a time consuming task, many supervisors record them just before the submission of the appraisal sheet to the HR leaving ample room for errors and omissions. This system is also open to the bias and prejudice of the supervisors. Ranking based on favouritism is a failure.

It is assumed that the bottom performers are replaced every year on account of their unsatisfactory performance by fresh talents who can add up to the output of the organisation. This is impractical as the replacement is always an expensive affair, and the high attrition rates can reflect a negative outlook towards the goodwill of the company. The likelihood of the presence of poor performers amongst the new additions is another possibility which can adversely affect the success of this system.

A single system of appraisal has high chances of giving out false reports leading to dispirited workforce. However the bell curve system backed by other measures of performance appraisal can be an added advantage.

Comments Listing
Posted: 29/10/2014 18:05:15

Hi this bell curve system does not genuinely prooves the bad and good performance , rather this practice brings lot of unhealthy practise from the mnagement and supevisors, which demotivates employees.Can this be challenged in supreme court


Posted: 11/07/2014 08:14:26

as a system it appears wonderful and worth being followed and adopted. However, the subjectivity on part of the supervisor ...and supervisor(S) may influence accurate evaluations and shift a well deserving candidate to the mediocre category or vis-a-versa...Secondly as it is a game of percentile, we may find even mediocre candidate from HRD in the list of best candidates,and the best candidates in the operational departments in the list of mediocre candidates....leading to frustrations....I write this based on experience


Posted: 08/07/2014 09:21:20

I don't think that Bell Curve is competitive tool as employee forced to one of the ratings.


Posted: 04/07/2014 11:17:00

Moreover it doesnt work where you have small teams. To have effective BC system you should have atleast 15-20 team members in an team.


Posted: 11/05/2014 09:33:47

A bell curve method of employee appraisal
ignores the fact that group effort is vital for growth of an organisation or a company.


Posted: 11/03/2014 15:56:19

In my view bell curve is no more a very effective tool. Rather, I would prefer to consider MBO approach over bell curve.


Posted: 20/01/2014 02:32:18

Bell Curve is the tool or approach to be handled with utmost care. It is beneficial specially when your orgsisation is thinking of COST OPTIMISATION. It is rationale to use once a while in such conditions but not a repetitive. Repititive use can bring only fear, unhealthy competitiveness, high cost on attrition and replacement and unspirited or stressed workforce.


Posted: 08/08/2013 20:49:50

It is amazing to me that companies go through elaborate interview processes to hire the best person, but then by using a bell curve decided that the majority of them are only average.


Posted: 19/07/2013 05:10:45

I could not understand the fact that due to bell curve a supervisor has to put few of his top achievers in lower grade to bring up the lucky top achievers. Does this has to go on this way every year. Only the close ones are outstanding and the other top achieves stay in good for ever.NOT FAIR I M SURE


Posted: 25/03/2013 12:30:48

Does anyone have data for which in an HR assessment, how small a group the bell curve should be applied to? We have approx. 65 people in our HQ broken into 8 different departments. For example, HR has 5 people, sales and customer service has 8 etc. I imagine it would be appropriate to apply the bell curve to the entire office of 65 people but we are being asked to apply the curve to each department, most of which have less than 10 people in the department. If you have any formal reference to the size of the population to be characterized by the bell curve, I would appreciate that as well.

Thanks!!!


Posted: 13/12/2012 01:46:29

Bell curve should be a natural outcome of a process rather than being a driving force for it. I have seen management asking managers to ensure that their appraisal ratings are forming a bell curve so that there is a bell curve at organization level. This is like hitting a bullet and then drawing target around it....


Posted: 20/11/2012 22:31:39

Hi

I personally think that it will be not truthful and honest to assess an employee by Bell Curve assessment - by Forced Method inspite of he met all the KPI by comparing with his/her peer.

Straight assessment - 360 degree is still the best.


Posted: 18/11/2012 21:53:07

KRA with bell curve is essential & results are matching


Posted: 08/09/2012 13:27:18

Pls. tell me the various performance appraisal systems normally followed in public sector and private sector Banks.


Posted: 31/07/2012 02:04:18

Good Stuff! I also agree with some of the comments like bell curve system is appropriate when a company wants to implement succession plan. Otherwise, we can use straight expectation method, where the performance will be compared with the benchmark.


Posted: 25/07/2012 00:20:13

I agree with the comment that Bell curve is spoiling the Team spirit. The performance management system needs to be understood and implemented in letter & spirit. An employee's performance must be compared with the target/benchmark set for himself in the beginning of the year. There must be regular meaningful interaction between the employee & his Manager for assessment/improvement in the performance. The strength & weakness of the individual must be identified by 360 dgree appraisal and on the basis of that an Individual Development Plan should be made for the enhancement of his knowledge, skill etc. Retention and development of talent is possible in this way.


Posted: 09/06/2012 00:25:16

We must understand the difference between Performance APPRAISAL and Performance MANAGEMENT system. Bellcurve if used only to "appraise", it is extremely bad and avoidable situation, However, if you are using it from "Management" perspective, it is good. To put it in most simple words, any system which helps to measure Targeted performance, is good.


Posted: 10/05/2012 03:13:45

This is a never ending debate on a hot topic. The key is to understand the Pros and Cons of the system and than adopting the system as per the organization's need. You may have to customize it as per your requirement. For more insights, read this http://qubehrm.com/blog/bell-curve-for-performance-appraisal-is-it-a-right-choice


Posted: 08/05/2012 10:55:23

Yes. Bell curve is most ridiculous. Whoever has started it but why current leaders are not having the vision that this method is spoiling team attitude. Why perfomance is compared with peers performance. Why not the expected benchmark?

When peers success is threat to self rating obviously team attitude is destroyed. When peers success is added advantage to self then can support also peers success at every step that in turn will gain large for organization.

It is simple common sense. A message to all senior business leaders who are spoiling human culture at work by adopting bell curve.


Posted: 08/05/2012 07:26:26

I work in a compancy where the salary is linked to band we fit in the bell curve. Its the most ridiculous way of appraising an individual's performance comparing with the peers in the organisation. Its a totally biased and the evaluation process has no rationale of a top performer or poor performer. The bell curve fitting has large room in the lower bands thereby concluding all those who are accomodated in these lower bands are average or below average performers. My company takes advantage of this concept and gives minimal increment to all those who fall in average or below average bands.

For e.g. I am suppose to be an average performer as per the bell curve appraisal system. I had an increment of Rs.1000 in my overall CTC. which amounts Rs.83 hike in my gross salary per month. This is a shame to me and my company as well to still retain me when it has been concluded i am not worth considering the salary hike i have.

I am not sure who has invented this concept of bell curve appraisal system without measuring the pros and cons of this system. Sadly companies adopted this for their benefit instead of adopting an appraisal system to motivate employees parallely identifying the gaps or improvement areas an employee needs to work upon !!


Posted: 06/05/2012 06:51:20

Hi all,
Instead of bell curve forced rating we can use straight expectation model. In this model performance is compared with expected excellence level. no forced rating and if performed well good rating is guaranteed.If not performed low rating is guaranteed. no peer comparison. so every employee strive for excellence as a team. where as in bell curve method of relative comparison success of one is threat for others rating.

if anybody really want efficient resource utilisation model contact me at devaraja@live.com


Posted: 24/04/2012 03:18:49

Bell Curve is the right tool for the companies who want to implement Succession Plan.


Posted: 12/03/2012 06:41:30

While the article is great and gives an insight into what it means (something which Jack W. of GE proudly mentions in his several books) I have not yet understood when it taks so much money and efforts to get a peron son board why do the concerned people ensure each and every person on board does well adn contributes in whatever manner to the growth of the organization. Sadly we have management taking decisions on which persons to be retained and which to be thrown out while the same management hardly plays a role in identification of average or poor performers and then takes the challenge to improve them - unfortunately its some of the concepts identified by some great thinkers and which we all tend to adopt - no wonder there is hardly any creativity or innovative approach adopted on people - the greatest resource of any organization.
Sometimes I wonder why do we have HR & OD team and what role do they play and their accountability when the average and poor performers are identified.
My apologies to the various verticals I have mentioned - nothing personal against them but I still have till date after more than a decade working with top organizations failed to understand what is the role of a bell curve! Should we motivate our resources to further add value to the shareholders an dcreate wealth or should we demotivate them and ask them to leave - food for thought!


Posted: 07/03/2012 23:14:07

Better to implement 360 degree performance appraisal instead of Bell curve based performance model.


Posted: 09/02/2012 08:37:38

I don't think so this is error less. The abstract of Bell curve paints attractive picture. But it seems there is less working/calculations on this concept, less practical data (especialy non-numerical data). I mean did anyone took response from employees, especially from high-rated(actaul).
High scored people are dishearted when they find less score after this process(and on same page they find high score from manager).
First of all why HR is forced to restrict on figures/numerics, will it help to retain high performer? Other thing is why we can't we provide a best mix of different systems.
Anyways, restricting on this Performance system, there must be a range/a bracket of margin or for high performers especially. Like there should be +,-(a certain figure) to lessen disheartness of high perfomer.
because in my opinion, 2 low performers are less dangerous than forcing actual high performer to low.


Posted: 06/02/2012 00:13:39

Good stuff. Mainly when you have the competency framework in place for all classifactions. I am going to test the system at my work when time permits, will let you know the outcome, guys.

Cheers


Posted: 24/01/2012 02:01:46

This is an informative article. But the question which comes in mind is that :

Is there any system which can also judge The Appraiser ? whether he/she is judging the employees on ethical basis or not?

One thing we all can never neglect is that this system and all other appraisal systems require human input and thats why Biaseness error remains in all systems in some form.

Hope that Professionals who are working as appraisars must take necessary actions for removing those biased factors.

Guys This is my opinion.


Posted: 02/01/2012 11:24:21

May i know the latest appraisal and advanced techniques after 360 degree appraisal


Posted: 10/08/2011 05:13:56

It was a awe-inspiring post and it has a significant meaning and thanks for sharing the information.Would love to read your next post too......

Thanks

Regards

Best B Schools in india


Posted: 18/07/2011 03:52:53

The Bell-Curve rating of performance is not a very new concept. However, application of the theory in real objective conditions, which differ from organisation to organisation, is very challenging. The concept perhaps came from the Gaussean Theorem of Probability also called Gaussean Deviation (I may be corrected if I am wrong). This study was based on a huge sample data and the curve was derived from the result exhibited by them. Thus one thing that becomes clear is that 'bell-curve' behavior is visible only when the sample data is very large. Should anyone apply a 'bell-curve' performance rating on a population of say 3 ? What message will percolate from such application ? Insistence of management to rate the workforce in a 'bell-curve' rating without studying the volume of the sample is preposterous.

I would continue writing in this post after I get your feedback on this point.


Posted: 30/06/2011 03:51:53

I agree With all the above comments


Posted: 20/06/2011 23:01:16

I agree with all the above comments, however, if an Organization do their employee performance assessment correctly with superior quality check as per the KRA's defined and supervisors rate their apraisees as per their peroformance and not biased, definitely bell curve works. Even sometime managers need not to do forced distribution process. Automatically you will get bell curve.


Posted: 13/06/2011 17:53:39

It is not the best appraisal system.I would like to know the best...


Posted: 01/06/2011 07:04:36

Hi All,

Can anybody explain how this has to be implemented on floor. What are criteria when you judge the particular person, what kind of data is required to get the bell curve system. i wanted to check how usefull is this to the organization.


Posted: 27/05/2011 09:29:06

For all those using Bell Curve, Please think of a situation like this. Let us suppose that the client specified QC rate is 98% and in an year, none from the team attains 98% quality. But, by the end of year, if team size is 20 and if company feels that 15% are to be rated as Outstanding, 30% are to be rated as Exceeds Expectation, then, among 20, even though not even a single out of 20 succeeded in getting a score of 98% on work, 3 (20*15/100) will get decorated as Outstanding performers. Note, none of this met the SLA!!Is this not rediculous? Bell curve can be drawn on any data, provided the data is normal and follws Central Limit Theorum. It is the organization which decided the % rate for a specific rating. In any organization, since the level 1 to 3 are in majority, and TLs and Managers are in minority, the real outstanding TLs and Managers will not get Outstanding rating during the time of normalization and forced rating is the only option for moving these people up. Hence, the bell curve goes with the majority. If someone knows the meaning of having a left-skewed or right skewed curve instead of a normal bell curve corelating the skewedness to organization's performance and resulting revenue, this would be greatly appreciated. Thanks Vishwa,


Posted: 25/05/2011 18:42:40

The bell curve distribution system should be a tool of analysis. It should be used by the larger organization to make sure that the managers are not blowing off their duties, and giving everyone an "Excellent" rating. However, it should NOT be used as a tool to determine a person's ranking, because it is arbitrary, disingenuous, unethical, and at times immoral, as it forces some managers to lie to individuals about their performance. Jack Welch laid a goose egg on this one.


Posted: 25/05/2011 07:22:57

This system gives more attrition than actually retaining talents.

This system does not gives jutice.

This system should be banned.


Posted: 03/05/2011 00:27:13

good morning to all

I feel the bell curve performance appraisal method is a significant method adopted by a company to identify the top,middle and low performers and to concentrate its efforts and resources on the top and middle performers.However, it suffers from the disadvantage of the supervisors judging and evaluating the efforts made by the employees in order to place him in one of the 3 slots.This can be overcomed by using a 360 degree appraisal system to rate the employees.Also, the company should be flexible enough to not adopt bell curve in times when it leads to forced distribution and in this case should go for absolute performance rather than go for a relative one.


Posted: 30/04/2011 04:00:29

1. How much % of objectivity is possible in KRA system which is the vital for Bell Curve. - Early response is highly appreciated.
2. PMS needs to be linked with the business results and to be dynamic
3.The policy for promotion and % of Top Middle and Bottom to be defined always starting of the year.


Posted: 30/04/2011 02:45:41

on my exp, Bell Curve is a effective system for PMS where we can fit the employees exactly based on their performance. Its a simple bt effective system. also the limitation is we have to fit the employees on the specified ratio, it may leads to drop the assessment of good performer to the below ranking. Appraiser should be very careful while ranking the employees.


Posted: 29/04/2011 05:36:24

Article is very informative. Monitoring system should be effective one.


Posted: 28/04/2011 09:21:16

Bell Curve is a better tool where an organization has a set of people are put on a similar or same job. Many company's are following this has a wrong practice. (i.e Ranking Finance Vs Operations Vs Sales Vs Admin

Is this correct?


Posted: 19/04/2011 07:09:03

Bell curve system is very good and adoptable to the Organizations.


Posted: 18/04/2011 06:50:37

I feel Bell Curve is actually a policy adopted by the company/managers to make their task easier. They put the Bell Curve in place to ensure that the employees are on their toes all the time.
The worst part is that even when everone has contributed significantly to the organisation, some employees have to be put into the middle/lower bracket of the curve, just to satisfy the graph, which, in my opinion is absolutely ridiculous.
Why can't we have an absolute performance instead of a relative one?
Also, where does the so called 'flawless' recruitment procedure of the company go, when they blatantly lay off ppl based on the bell curve rating. The companies are equally responsible for the incorrect hiring, if they ask the person to leave.


Posted: 13/04/2011 23:35:14

Bell Curve is one of the best method for assement. Some companies are applying the bell curve model to groups as small as 20-50 individuals. As a result, people in a particularly talented group will suffer if a certain number of them must be given poorer ratings than they would get in another group. This can occur because the forced distribution process requires that a set percentage of employees fall into each category. So the bottom line is that even in a talented group, someone has to lose - typically 10% of the total group. The question becomes whether or not they have the right people in the right sections of the bell curve.


Posted: 11/04/2011 00:52:07

Good mornng All,

One fact that all of us need keep in mind is that we are employed by a company/organization because of our promise to perform at the time of employment. So doing a job informed and agreed to execute is not a favour. Hence an employee needs to be on his/her toes to ensure that his/ her performance meets with the requisite parameters specified. And when the Appraisal is able to clearly differentiate between the good, the average and the riff raff and plans a course of action post that... what's wrong with that?
It also an warning for the employee to buck up... Checks and balances have to happen all the while!!!!

This is my point of view .. no offence meant.

Thanks You.


Posted: 26/03/2011 03:06:28

Bell curve system of appraising is effective only performance is reviewed regularly and not at the end of year and is free from biases.


Posted: 07/03/2011 22:41:19

this performance system gives a good result by avoiding errors in it, this is a good system to rate the employee performance and giving proper training according to the skills needed. this evaluation gives a real report by evaluating by the employees through the year.


Posted: 04/03/2011 00:52:04

I think the article is fabulous and I am totally agreed by this bell curve performance appraisal method and as the author mentioned above that the dependency on supervisor who decides about the employee capability is a major disadvantage. So I feel that there is a need of finding the alternative that make this system out of any major human intervention. As it should be either totally the human process or some technical process.
I take up the call to ask the author and the followers about how to get over of it.


Posted: 02/03/2011 06:14:28

I couldn't understand the main them of Bell Curve Performance Appraisal System.

Is is for removing or identifying the poor performers and if so what is the effect of individuals by this system.

They will always work in fear and not give their best to the organisation.

Ajay


Posted: 25/02/2011 13:04:58

yea


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