Fundamentally I wonder why people see red when you speak about the normalization or rationalization process connected to performance management framework in organizations. I tried to figure this out listening to diverse perspectives whenever I had an opportunity. One common denominator that I found was that people usually get disillusioned with the process rather than the concept and that is the good part to begin with.
When organizations fail to avoid the feeling of "I'm a victim of the process" or the "I wish I was told before" or "Why did he /she get a better rating" then the aversion or disliking for the normalization process is much higher.
To understand why this happens we need to understand why the normalization process was introduced in the first place. The normalization process was brought in as a tool by decision makers to distribute reward (pay rises) in some controlled way and to have some fixed slots that can be mapped to a certain level of increase. (merit increase)
One argument made by opponents of the bell curve is that "when we hire best of best talent" why do we expect low performers. (tail of the bell curve). The key to this mystery lies in the terminology and I will elaborate more on this later.
How does the organization make this important concept more acceptable and the process more tolerable. Key Focus should be on : Execution ; Transparency ; Governance.
Execution: Excellence in execution implies that common understanding or shared understanding is important. Managers / Leaders and HR play a key role in creating this shared understanding. Chose the Labels correctly.... Rather than say Excellent, Good, Average... Stick to Outputs Way Beyond Expectations, Beyond Expectations, Met Expectations, Just Below or Below. You cannot expect more than 5% at the maximum to be labeled under the Below expectations. Also in a good year and with a good team you can have almost everyone beyond or meeting expectation. Be ready to shift the curve (moving bell) and be flexible. That way everyone celebrates. So terminology is important. Avoid any more than 2 to 3% actually being below. And if someone meets expectations then should the payout be 100%. Not necessary.... In high performance organizations an element of variability (15 to 30%) can be introduced which is for higher than expected and you need to ensure people focus on how much of that component they get. The problem today with way compensation is understood is by Gross Numbers so people compare Gross with Gross. They should be shown how to compare (and get used to that...) Fixed with Fixed and Variable with Variable over fixed time periods over which the payout was given. Easier said than done... but it's not impossible to do this.
One good way to take care of the disgruntlement is to publish openly what the achievements are for all those who are above or way above expectations and this way you won't have people resorting to water cooler whispers and stoking grapevine. This is the element of Transparency that we speak of.
Governance and a eagle eye for misuse is very important. Do a regular audit as to who are the stars, what did they achieve, was it more than what was expected in hind sight or was it something that that was fixed post the achievement. Just like an Audit Team for your financials you need a audit team to review your performance assessment outcomes and how individuals were rated across groups. Don't leave it to the HR team to do this but let it be a business driven initiative.
How many CEO's and Directors of Operations ensure this audit as a practice. If you can tick off a YES to this practice being practiced in your organization you are on the right track.
Again as I said earlier it is not about the Mountains that we need to worry when we drive the road but the small rocks, stones and pebbles along the way. Once again I would emphasize that the shift in view of the Bell Curve need small things to be ironed out and it would be a much more acceptable with a more robust and acceptable process in place.
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