The disgusting lazy (bell) curve

GE’s Jack Welsh popularized it. The bottom 10% need to go. Every year, employee appraisal would bucket people in terms of their performance and the bottom 10% were asked to either shape up or ship out! This philosophy of people management later caught on the fancy of few others. I have personal experience with this kind of performance appraisal informally and formally at Oracle and recently at Mayer’s Yahoo!. ¬†While this kind of management has its place, I think it is one of the laziest management tool a company can use. To its credit, it does produce quick and (bell) shapely results – if that’s the objective. Let’s look at how it changes the behavior and culture of a company

1) Gaming. The first thing you will notice is that people become extremely performance focused. Its good in a way but bad in another way. Performance is typically measured in terms of numbers – so, employees fervently game the system. Managers pad their teams with sacrificial goats. Employees game it by padding their goals/time/effort.

2) Like breeds like. There is a lot of subjectivity in building the bell curve. An employee doesn’t get to tell her story. Her manager gets to do it. So, a manager has a lot of discretionary power to determine where an employee falls in the bell curve. Guess what this breeds? – Yes, nepotism, and favoritism. If you were to give it a positive slant to it, it also brings in alignment faster. Less friction within teams.

3) Insecurity. Ultimately people become risk averse because they don’t want to be on the wrong side of the bell curve. They become insecure and that creates problems in leadership, collaboration and teamwork. We are all watching our backs.

What should be the intent of measuring and reviewing performance?

My personal view is that performance review should be done with the view of seeing what’s working and what’s not working and iterating on it until you get the right results. To do this, the fundamental tenets of performance appraisal should be

1) It should uphold your values. There is no better way to reinforce your company values than by measuring people on it. Most often values are watered down because we put revenue over principles. We fire people because they didn’t achieve quota, but we tolerate people who violate company values. Measure and reward values. That’s how you build a “Built to Last” company!

2) Employees should feel secure. The second important aspect is that employees should not feel threatened about performance review. Often employee and managers are on opposite side of the table. It should be the review of the situation, not of the person. Employees should know that they are not going to be fired on performance alone. There will be good and bad quarters. Don’t give them reason to hide the reality

3) Every performance review should build leadership. In my 2 decades of experience, I can cite may be one or two incidents where my manager’s review was truly transformational for me. Mostly its like cattle grading: “You get 3 on this, 3.5 on that. By the way, you should be happy that you are in the top 10% of the team here”. This is a wasted opportunity. I believe that performance is the result of the belief. Not the other way around. Change belief, and you will change performance. We don’t need managers today, we need leaders. Every employee should be a leader in her own way. And leadership is not possible without the right belief.

And why am I against the bell curve?

Bell curve is a statistical method to “manage” your talent. It doesn’t help you build leadership. All companies do have wrong hires and they get weeded out. You don’t need a bell curve for it. But for the majority of folks who have the potential to make critical contribution, bell curve is not the right way to manage them. ¬†Focusing on getting the right people in the right place and creating the right belief should be the focus of the performance review system in a company. It should help employees grow and along with it, the company. Slotting them into a bell curve is short-changing them and the company’s potential.

Do we give up on the bell curve?

Bell curve has a place. But in the background. And maybe at the SVP level. Use it for workforce/talent planning. Use it as a diagnostic tool to see what’s going wrong and how to fix it. Just don’t use it as a lazy machete on your employees.


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