“Bell Curve” will never let a company stay ahead of competition. And that’s what it ensures.

Once a teacher enters his class and announces that instead of taking a final exam, the students will have to take a series of four exams for the most challenging subject. Each student will then be awarded the highest average that the class scores in any one of the four exams.

The hard workers and the intelligent lot worked very hard, as always, and got top score in the first exam. To their utter shock, they realized that a number of students in the class performed abysmal and merely scored borderline passing marks while a few flunked too (as they always did in the past). However the average score of the class yet stood at a respectable 65 mark and this was largely attributed to the performance of those 35% students in the class who got the top marks. To illustrate, out of 100 students:

1. 20 students scored either full marks or were in the 90’s
2. 15 students scored between 75-80
3. 35 students scored between 50-80
4. 30 students were either borderline cases or shamelessly flunked

The average score slid to 55 after the second exam and at the end of third exam the average score stood at 40. Guess what, the average score slipped to less than 35 after the fourth exam.

What transpired is a no brainer – those who were motivated lost the motivation after the first exam since they could very well see the average and non-serious students (65% of them) reaping  the result of the top 35% students’ hard work. Why the top performers must let this happen? It may well have been a case that the average and non-performers could not derive any motivation either. ‘Averaging the score’ suited them just fine.

This is a classic example what socialism can do to a company in today’s time. HR tool what they call ‘bell curve’ takes away the motivation from the performers. At best this motivates only the average and non-performers to not put extra effort. If at all the “bell” rings because the curve that the companies give it so passionately and rigorously during the appraisal cycle, they must do some research whether the sound of it is desired and actually lasts as they intend. I have my doubts.

In my belief, companies that reward their top performing employees, no matter how many of them they are at the end of an appraisal cycle, stand to gain in the long stead. Further the companies that do not take corrective steps to generate an environment of competition internally will find themselves ill-equipped to deal with the external competition.

The internal competition can be generated when:

• the non-performing resources are ridden swiftly;
• 25% of the average performing resources are warned to improve their performance and if they do not improve, they too need to be asked to go in the future appraisal cycles;
• HR polices be reinvented and must be revisited as frequently as every year (including pay scales, entitlements, job roles, expectation management etc.) to hire only the top talent. This will ensure the existing top talent feels challenged and face competition internally;
• Those who are few notches short of becoming top talent are nurtured better so that they can join the top bracket; and
• All measures to be directed to retain the top performers – the competition want them at all given times. The companies cannot gain if its top talent does not gain (or does not feel gained) contemporaneously!

The concept of ‘bell curve’ needs to be redefined or the shape of “bell” perhaps requires a bit of redesigning.

There is just too much competition out there which is growing by every passing day. And guess who can help the company to beat the competition and keep it ahead of them all!

23 January 2016