“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.