Bell-curve appraisal systems estimate the performance of the employees based on a graph, segregating them into three major categories- top performers, average performers, and low performers. It is a traditional way that companies use to assess the performance for appraisal of their employees.
However, there have been several debates around whether it is a fair way to assess the employees- whether putting them in a graph is fair or not.
The use of bell curve in performance appraisal
A normal distribution curve is known as a bell curve considering its shape. It is an easy way for HR professionals to ensure rewards for the top performers and improvement for the average performers.
For instance, if your organization follows a bell-curve performance management system, they will first see the performance rating given to you by self or manager review. And accordingly, they will put you on the curve based on the rating.
The most generic distribution of the curve is
- 20% – High performers
- 70% – Average/Satisfactory performers
- 10%– Non-performers
Disadvantages of the bell curve in performance appraisal
Generic view irrespective of the department
The overall performance of an employee should be measurable on an individual basis. When you compare the performance rating of the employees, you considerably remove the basic deciding factors- that is the department, the role, and the daily tasks of the employee.
It is natural that if these factors are different for each employee, the expectations ought to be different. Hence, comparing that rating on an overall basis is unfair to the employees.
Lack of active feedback
When you rely on the bell curve for performance management, you remove the practice of active feedback. You have to ensure that the employees get feedback regularly and not once a year.
A bell-curve appraisal system gives a very shallow view of the employee’s capability. Instead, employee performance needs to be assessed personally based on their role and factors like their team coordination, empathy, business excellence, adaptability, and more.
A bell curve performance review does not take into account their competencies.
This system of ranking the employees is pretty rigid. Organizations simply use it because it is more convenient and quick. Putting them into different categories is unfair to the hard work employees are putting in every day.
Not beneficial for smaller organizations
A bell curve appraisal method does not prove to be helpful for organizations with a lesser number of employees. You require more data to get the average of all the employees. An ideal range of the number of employees for the bell-curve appraisal would be at least more than 150 employees.
Loss of morale
When the bell curve formula for appraisal fails to show accurate results for your employees, the lower rating might lead to a loss of morale. In addition, it might lead to hampered productivity and lowered performance. To ensure that this does not reduce the quality of work/lead to more turnover, organizations need to ensure that they find a better alternative to performance appraisals.
Great performers remain average
An employee must be great in his role, but according to the curve, he will be in an average position as it considers all other employees together.
This way, great performers remain average while the average performers might end up in a better position. It leads to an unfair measurement of performance, and employees might resent the functioning of the review system.
Alternative to bell curve appraisal
Ensuring a continuous feedback loop
Every task your employee completes has room for feedback, good or bad. Ensure that your employees are not clueless for months wondering how they are performing. Hold regular 1-on-1s and performance reviews within the organization to keep them in sync and give them a chance to improve. How they work on improving their performance can be a great deciding factor in considering their appraisals.
Management by Objectives
MBO is the assessment of the performance of the employees through set, quantifiable standards and values. These standards can be around business expectations, culture, engagement, and more.
It is obvious that performance review is a significant element in an individual’s career. Ensure that it is smooth and, more importantly, fair.
How does the bell curve work in performance appraisal?
The bell curve segregates employees into a bell-shaped graph having three categories: top performers, average performers, and low performers. The ones who come under the lowest category are shown ways for improvement, while the top performers are rewarded for their contribution.
How is the bell curve calculated?
The general form of calculation for performance appraisal through a bell curve is
Top performers: 20%
Average performers: 80%
Low performers: 20%
However, it varies from organization to organization.
Why is bell curve important in performance appraisal?
The bell curve performance review is a quick way to analyze the performance of the employees, even though it turns out to be often unfair. Additionally, it is a way to go for huge organizations as the process cannot be manual.
What is a bell curve analysis?
Bell curve analysis is a graph with a curve shaped like a bell. It is often used to visualize the distribution of certain values in a graph.
What is the purpose of the bell curve?
This concept is often used for employees’ performance appraisal systems. However, debates show that results can often be unfair to a reasonable level.