The Normal Distribution Creates an Abnormal Work Culture
Forced bell curve systems are a statisticians way of looking at the organization. Much like everything else that statisticians do, the forced bell curve is also a mere hypothesis. However, this hypothesis has been largely romanticized and adopted by many companies. In fact about a decade ago, forced bell curve was the norm and companies that did not follow this system were considered to be primitive and off base with reality.
In this article, we will look at the forced bell curve or the normal distribution approach to performance appraisal. We will also see some of the pitfalls that have resulted from blindly following this approach.
What Are Forced Ranking Systems
Statisticians believe that everything in the world follows a similar pattern. Well, if not everything, then most of the things do! In fact this pattern is so ubiquitous that they call it the normal distribution.
Statisticians observed variables like height, weight, income and even attractiveness of individuals. They realized that there are 5% of people at both ends that have exceptionally high and low scores compared to the average. Then there are 10% people at both ends that have significantly high and low scores compared to the average. The other 70% of the people are very close to average. Their scores and the average are virtually interchangeable!
This same assumption is put to use when a forced ranking system is put into place. It is believed that the workplace performance as a whole fits the normal distribution. Performance management therefore simply becomes a task of identifying which person is the best fit for which category.
Part of the assumptions on which forced ranking systems are based is true. People do fall into three categories i.e. exceptional performers, average performers and below average performers. However, their percentages are not the same!
In fact if the percentages were the same across all organizations, then there would be very little to differentiate the performance of two organizations, isnt it! Better organizations are better because they excel at attracting and retaining large amounts of high performers. The number of high performers at a company like General Electric will be much higher as compared to an average business.
The idea that performance necessarily follows a bell curve in all organizations is therefore flawed. Each organization has varying mix of these three kinds of performers. This is a fact that should be acknowledged if performance appraisals are to be better managed.
It is for this reason that stalwarts like Microsoft have started deviating from forced ranking systems. Also, other companies like world famous IT services giant Infosys have also been following suit.
The Problem with Forced Rankings
Forced ranking simply isnt a system that can be ignored. Its effects on the company are not neutral. Instead, companies that tend to follow it face certain detrimental effects. These have been listed down below.
The bell curve based performance management systems are the relic of an era gone by. Companies that follow such systems would be better off if they abandoned these systems and moved on to a system that better reflects the realities of organizational life.
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