The Bell Curve, otherwise known as normal distribution, believes that most employees fall under the average category and the rest are evenly distributed on the top and the bottom.
While it has been used by big companies for a long time, many of them are starting to discard and move away from this archaic employee appraisal method. Why? Because it does not capture nor reflect the actual performance of the employees. In fact, instead of inspiring people to aspire to be in the top 10%, it pushes people to feel discontented which adversely affects their performance and happiness.
It Promotes Discontent and Loss of Morale
As the bottom performers leave, managers are then forced to rank new employees at the bottom because that’s how the Bell Curve works. This means that previous top performers may find themselves in the middle and new sacrificial lambs need to be dropped at the bottom. And the cycle goes on until top performers become endangered species. This promotes discontent, frustration, and resentment toward their work.
While the intention of the managers is to encourage the employees to do better, the fact that they are identified as the bottom performers will eventually lead to loss of morale and motivation to their jobs.
Furthermore, if an employee is always in the middle of the herd no matter how much effort he gives, there’s a high chance that he will stop trying — maybe sooner rather than later. When you are forcing outstanding employees to be mediocre, they will start giving you mediocre work results. However, there are also those employees who are happy being in the middle — as long as they are not rated with a 1 or 2 then they are perfectly happy where they are and won’t strive to improve. In a sense, the Bell Curve rewards mediocrity.
Forcing Employees To Have Lower Ratings Than They Deserve
Because the Bell Curve limits the number of people that can be placed at the top, it forces the managers to choose among the high performers who gets to have that much-coveted five point rating and make up reasons why someone else’s rating should be demoted.
It forces the managers to place a certain percentage of employees at the top and the bottom, and a large percentage in the middle. The bottom 10% are forced to be the ‘losers’ of the group. So even if your team is a group of high performers, someone still has to take the fall and be given a low rating — because not everybody can be winners.
To keep this example simple, let’s say there is a team that consists of five outstanding members with the following raw scores: 4.5, 4.6, 4.75, 4.8, and 4.8. Their raw scores suggest that they are all excellent employees, but the need to satisfy the Bell Curve makes it necessary for the managers to still label someone as the loser of the group, even though he gave as much effort as the rest of the team and that a measly 0.1 difference in their raw scores was all it took to be at the bottom of the food chain.
Forcing Someone Who is Not Necessarily a Top Performer at the Top
Because the number of employees at the top and the bottom of the curve needs to be satisfied, with the right conditions, even someone who is (obviously) not as outstanding as the others can get a place at the top.
For argument’s sake, let’s say that there is a team of five people who are all considered as average. But because the bell curve needs to be satisfied, one of the five people will be promoted to a prestigious spot at the top 10%.
Being Rated on a Five Point Scale is Very Degrading
Performance appraisals should be about encouraging employees to continuously improve. However, a year’s worth of work reduced to a single number is not just degrading, it also puts people on the defensive mode which hinders their improvement and productivity. This also fosters fear in your employees and may lead them to become flight risks.
It Promotes Unhealthy Competition
Why would you help a fellow employee when you know full well that he is a competition in getting top marks in the annual performance appraisal? Ranking an employee against the work of his teammates instead of his own work efforts will eventually lead to an unhealthy competition, so much so, that they will stop helping each other. To each his own, right?
An Expensive Endeavor
If the company’s goal is to identify and reward the top 10% performers and weed out the bottom 10% performers by using the Bell Curve method then this could be a potentially expensive endeavor for the company as they will need to hire and train new employees every year.
The Bell Curve method suggests that most of the employees are mediocre at best. This undermines the actual contributions of potential high performers which make them feel insignificant. Why do you think giant companies like Google, Microsoft, and Adobe have ditched the Bell Curve? It’s because, after decades of using this performance appraisal method, they have finally realized that they are driving top talents out of their companies.