Bell curve system of performance appraisal is a forced ranking system imposed on the employees by the management. Through this system, the organization tries to segregate the best, mediocre and worst performers and nurture the best and discard the worst. And this segregation is based on a relative comparison of the performance of the workforce against those engaged in a similar activity and ranking them accordingly.

Bell curve method assumes that employees in a company can be divided into groups such as:

  • High Performers – Top 20%
  • Average Performers – The middle 70%
  • Non-Performers or Below Average Performers – The bottom 10%.

This forced method of ranking the employees has its own advantages and disadvantages.

Advantages of the Bell Curve in appraisal system:

It is always important to identify top-performers and reward them substantially. This helps the organization to retain the top talent with them. This way both the employee and the organization grow.

Bell curve is probably the only method by which managers in the organization can implement leniency or strictness of ratings. If the managers implement leniency in their rating a large majority of employees will fall in the high rating group. If the managers implement strictness in their rating a large majority of the employees will fall in the low rating group, which will demotivate the employees. So on average, most managers tend to rate on a lenient scale.

Also Read: 3 points to keep in mind while doing Performance Reviews for the Next Gen

This evaluation system helps identify the suitability of employees in a job position. By doing forced ranking with adequate analysis and HR interventions we can identify the strengths and areas of improvement of the employees and place them in positions which map better to their capabilities.

Disadvantages of the Bell curve in Performance appraisal:

The Bell curve model might turn out to be too rigid in cases where the employee strength in the organization is less. Here the manager might be forced to put employees in specific ratings just for the sake of bell curve requirements.

As in the bell curve model, the managers can give only a limited number of employees in the top performer’s category, employees who have actually performed exceedingly well through the year might be forced to be categorized in the Average performers’ category for some valid Bell curve requirements. This will lead to a loss of morale among the employees.

But we should understand that timely and appropriate feedback is definitely essential to improve employee performance. Telling everyone they are doing better than what we expect from them might send a wrong message to the employee that they need not strive more for success.

Companies like CSC have begun rating employees on an extreme bell curve with the expectation that 40% of the workforce will fall short of expectations. At the same time, software giants like Microsoft have abolished the Employee Evaluation System and have started to follow a new approach that will make it easier for the managers to allocate rewards in a manner that reflects the unique contributions of their employees and teams.

So probably we could conclude this on-going debate by considering 360-degree feedback from the employee’s subordinates, peers and seniors to know how they are perceived in the workplace along with the bell-curve based normalization methodology. This would bring a more well-rounded review and help in a more accurate assessment of the employee’s performance.

What are your thoughts on the bell curve method of performance appraisal? What is the evaluation method followed in your organization? Share your views in the comments section.