Future of Performance Management is not just the Bell Curve System

Future of Performance Management is not just the Bell Curve System

The normal distribution curve or the bell curve system helps to measure how your employees are doing vis-à-vis as everybody else.
But this system which is adopted during appraisals has been debated for a while now because it forces ranking of employees to fit the nature of the curve. This means a few employees get placed on the extreme left; employees with very good and average ratings are placed in the middle and few on the extreme right.
HR experts believe the downside to this is that it often ends up comparing unrelated roles and team efforts don’t get rewarded because of the need to give people ranks according to the curve.

Thus, software major Infosys’ CEO Vishal Sikka is mulling changes to the existing performance management process in the company. Sources said Sikka wants to do away with the existing bell curve process. Instead, he wants to create a system that will reward the rainmakers and align bonus payouts to customer delights that they execute. He believes this will foster a culture of innovation and performance.

Changing the system can bring in a more democratic way of appraising employees to an extent. The risk is that it might bring in an element of subjectivity to the appraisal process and managers may also go soft on the under-performers. The other risk is that budgets for bonus payouts might fluctuate every year as there is no compulsion to fit employees in the curve.
For Infosys, the challenge gets magnified considering it has an employee headcount of 1.7 lakh, so HR experts believe it might tweak the present model to incentivise individuals rather than removing the bell curve completely.

Read more at Economics Times