Organizations are built to serve a purpose and employees at all levels are entrusted to live that purpose. An effective Performance Management System is a must to translate effort to performance. How performance should be assessed has been an important and sensitive topic ever since organizations came into existence. The recent decision of dumping bell curve by organizations such as Infosys, IBM, TCS, Accenture is another effort to foster performance. While some organizations have gone the new way, many organizations are still contemplating what is right for them.
Whether one should follow the fad really depends on what purpose we expect our performance management system to serve. If promoting competition by comparison is an expectation then bell curve is just the right tool for it. It is an effective tool to look at the misaligned lot annually and bid them goodbye. It also helps in differentiating performance between high and average performers. However this is the tricky part and this is where it creates maximum dissatisfaction amongst employees. In this fast pace world where employees are expected to be involved 24 * 7 in their work, a relative system of performance often demotivates employees who have performed really well on their goals but are penalized for working with people who are considered smarter than them. The problem compounds when employees suspect that performance appraisal is biased. The employees then feel that they are not respected by the organization. This creates disloyal employees and increases the attrition rate of organization. Thus for any organization which uses bell curve it becomes very crucial to considerably reduce the subjectivity that is built around this process. This is certainly easier said than done. Multi-rater feedback system, use of technology can reduce the biases to some extent however they introduce other challenges in the process. It would not be wrong to conclude that a fair appraisal is highly dependent on the fairness of the manager conducting the appraisal. Any influential manager can easily play with tools to suit his ambitions. Bell curve thus becomes very difficult to manage. While we started with the hypothesis that it serves as an effective tool, in depth understanding of the process nullifies our hypothesis. Given the amount of subjectivity managing bell curve introduces and the cost involved if it is not used wisely, it is better to look for an easier system of appraisal.
Mr Jack Welch in defense of the bell curve has said that evaluating people on values of team work will ensure that people cooperate with each other. To begin with, a lot of organizations do not assess employees on values and even when they do, a combination of bell curve and evaluation on team work value at best calls for selective team work. The purpose of performance management system also depends on the culture where it is being used. Indian culture is a relationship oriented culture. A lot of work gets done informally through relationship. Big giants such as Reliance have grown using this as one of their key strengths.
Looking at it from a different perspective, why do we need to wait for an annual process to examine the misaligned lot? Why not set goals clearly with employees and provide continuous formal / informal developmental feedback to them? This of course calls for training managers to give feedback constructively lest this will become another devil ready to stifle effective performance. The process ofcourse should not end at giving feedback rather this should be the first step towards employees’ development. There needs to be a commitment towards development for them to remain aligned to organization goals. Continuous feedback should also entail continuous recognition to keep the employees motivated.
An absolute system of assessing performance is also not free of subjectivity but is an easier system to manage. Accompanied by continuous feedback process, focus on development it will serve as an effective performance management system. Also from a spiritual perspective, it is unfair to compare any too persons as each person has his / her own karmic (actions) account and life story. The best we can do to motivate employees is to respect them for their current “karma” and set them in the right direction.
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