Bell curve is a widely used tool for the longest to reward employees during appraisals. This is a reflection on how some of the early adopters are coping without it.
A few years ago some of the large consulting and technology organisations announced the discontinuation of the bell curve systems. The bell curve method used during appraisals was forcing managers to rate their colleagues against each other. This was perceived to be creating a discriminatory system to reward or punish employees. This 9 box method forced employees who were at certain quadrants to leave as they were boxed into a corner. The ditching of the bell curve sounded like a great idea. But, what replaced them needs a closer evaluation as the bell curve was used by many iconic companies for the longest time. Its been a couple of years into this implementation and we stopped by to check the progress made. We spoke to 15 large organisations who are undergoing this transition though they maintained that its still early days.
We picked organisations who had an employee base between 10,000 and 2,00,000 and the observations are worth reflecting.
The New System
First of all lets review this new performance management system. Though each of these organisations has their own unique processes, broadly they had more or less the same philosophy. They all want to provide real-time feedback to improvise over the once a year appraisal system of the past. Their intent is to evaluate each unit or individual independently than a relative comparison with other colleagues or departments. Organisations followed this up by aligning compensation and reward systems to individual and team achievements.
Ring your feedback timely
First Few Steps
Organisations transitioning from bell curve had to intensively communicate to their well spread out workforce through various mediums. However, the most important step was to train their managers who had to implement them. This was understandably a critical exercise as 90% of this change was dependent on the manager’s buy-in and subsequent execution. A user-friendly tech platform was the next key enabler. The first few firms who embraced the change were Tech companies themselves. They had an in-house tech capability and so building a user-friendly platform became even easier.
The Bottle Necks
Every organisation has a limited budget and the Bell Curve fitted into it appropriately. Getting the managers to relate to the new system and absorb the financial angle was a key step. The budgets with the new system are still limited and only the distribution methodology changed. The new distribution system is preventing the push some colleagues to poor ratings to accommodate a few top performers. Another bottleneck is making the busy managers available. Meeting colleagues once a year itself is a logistic nightmare. HR managers told us how they had to chase the line managers for months together to complete the appraisal process once a year. The new system mandated 6 monthly feedback in some cases and many organisations insisted on quarterly reviews. Making time for this real-time feedback was certainly a big ask.
The mandate from these organisations is clear. They are asking for a highly communicative culture which was a huge shift from the earlier once a year connect.
Bell Curve to Straight line
That is how one of the Business head described the new process. These organisations agreed that the frequency of interacting with their colleagues increased with the new Performance management process. The benefits of real-time feedback and rewarding quarterly feedbacks meant faster reach out to the employees. Managers also felt their connection with reportees improved due to the timely interactions. Thanks to technology humungous amount were data was now being gathered which has become a delight for the HR data scientists. The Tech companies believe these data points can throw interesting business intelligence and people analytics over a period of time.
Appraisals or Increments?
Any change is difficult. Especially, the bell curve overhauling is a massive one as it has a direct influence over one of the most important outputs of appraisal. Money! We have made appraisals and increments synonymous. Yes, we no longer ask people if they got a raise, we ask if appraisals are over to mean the same. This mindset change though will take time and the new system of frequent feedbacks and immediate rewards may change this mindset. Most organisations still have an annual increment cycle and they believe that doesn’t need a change.
In summary, employees seem to be happy with the high touch communication channels that have come into play. The abandoning of the bell curve is seen as a measure to engage the vast millennials who have entered the workforce. Likewise, the workforce across the spectrum of generations are appreciating this new approach. Some call it a straight line. It is too early to declare the demise of the bell curve as most organisations are still using them. Maybe the time has come for organisations to check the learnings from these early adopters.
Organisations who are in dilemma about the bell curve can draw inspiration from this famous quote from the 18th Century. “The chains of habit are too light to be felt until they are too heavy to be broken."