Today's Solution, Tomorrow's Problem.
Peculiar are the ways in which organization change things without understanding the real issues, the real problems they are trying to address and then live with a whole new set of problems down the line.
The same is to come with Big Bell. The Normal Curve or Bell Curve approach to manage organizations came about for two reasons...
a) Do away with a small fraction of non performers each year and replace them with stars
b) Next year you should have more stars and less non performers and in the long run you don't have any poor or non performers
Oh La, this never happens. Why?
The assumption is flawed. Here is a way to look at it. Your individual performance (of employees) will be randomly distributed (like a bell curve) if you hired them at random from a crowd of talent. However organizations work on deliberate attempts to source, select and bring on their talent to their turf. So fundamentally performance cannot be randomly distributed when selection is deliberate attempt to hire people who are good in the population. .
Furthermore if your work was about doing some sorting exercise or widget breaking exercise where everyone is doing same kind of work and same standards apply then you can expect work outcomes to have a normal distribution. When buckets of work effort are non comparable or when team effort is determining outcomes then what normal are we talking about.
The problem was GE brought in Bell Curve for axing non performers, good for them. Everyone tried to copy but remember you can never develop sustained advantage from any system unless you understand the substance behind the form. So many organizations tried to follow and voila....... everyone was using bell curve.
Then came more problems, people who were paying out rewards found it a good way to easily segregate people and dish out salaries and increments. But that was also a flawed assumption. They were creating tomorrows problems. Real pay differentiation should be skill differences (capabilities) and resultant impact created for business. When you cant' do this you find the easy way out. Use something else which really does not do its job well (the bell curve)
Now everyone's talking about Doing Away With the Bell Curve. This is the seed for tomorrow's problem. The idea behind the bell curve was that you did a fair discussion elaborated to your team why A was different from B, and B was different from C in a convincing manner giving feedback twice in a six month period and finally when outcomes came no one felt he or she was a victim of the system that was unfair.
If companies were really sure their bell curve worked then the best thing to do was to put up on the notice board (intranet that so many have, or the notice board) highlight all the A banders with their achievements. Who would deny such open culture and when people see what was delivered for an A there would never be a complaint. Today all agenda's are hidden... Managers dont' want to give feedback. They just pass it as another HR bungling by bringing in the normal curve and escape the questions they cannot answer. Don't you remember the most quoted line after the Great Dictator ..... "You were great but ... we have a normal curve so you were pushed down"
Now doing away with Bell has become a fashion because Cisco's and Big Co's Did it but what is that you will do after Bell Curve is abandoned is not even simulated in the mind. If you really need to give up the bell curve ask the following
a) How will you award increases. If you think you will leave it to managers of teams to decide you are in for a great .... challenge. Managers will come back saying give me a spread, or they will end up playing GOD. The problem will be attrition due to unfair managers. If they become socialists distributing increases evenly you will end up losing your best talent to competition as your best performers will become average salaried people within 2 to 3 years.
b) How To Make them Give Better Feedback and Improve Appraisals: This was always the case, but how will that change happen. It needs deliberate attempts to understand what is meant by excellent versus what is mediocre in each and every work function. Then be ready for your compensation teams to start groping in the dark how to distribute merit increase, how to compare jobs and how to make people happy with the rewards system.
c) How will you promote people. Today it is generally based on High Performance as a lag indicator compared to similar groups. The down side of doing away with Relative forced Ranking is having a good way to identify potential that is scientific and predicts performance rather than scuttles performance in the long run.
d) Finally it is about asking What Next on Distributing Annual Increments: With Bell curve managers were seen as forcing people into buckets without proper reason (Read it as poor feedback giving practice). Without Bell curve managers will be seen as playing favorites or as being so non-discriminatory that their best performers will have no reason to stay back.
Just a couple of years down the pendulum will swing another way when maybe another CAPCO will start adopting the Bell and Everyone follows... without remembering that the last thing that can make your practice sustainable is the form, however the right substance behind the form is what needs to be understood.
Peculiar are the ways in which organization change things without understanding the real issues, the real problems they are trying to address and then live with a whole new set of problems down the line.
The same is to come with Big Bell. The Normal Curve or Bell Curve approach to manage organizations came about for two reasons...
a) Do away with a small fraction of non performers each year and replace them with stars
b) Next year you should have more stars and less non performers and in the long run you don't have any poor or non performers
Oh La, this never happens. Why?
The assumption is flawed. Here is a way to look at it. Your individual performance (of employees) will be randomly distributed (like a bell curve) if you hired them at random from a crowd of talent. However organizations work on deliberate attempts to source, select and bring on their talent to their turf. So fundamentally performance cannot be randomly distributed when selection is deliberate attempt to hire people who are good in the population. .
Furthermore if your work was about doing some sorting exercise or widget breaking exercise where everyone is doing same kind of work and same standards apply then you can expect work outcomes to have a normal distribution. When buckets of work effort are non comparable or when team effort is determining outcomes then what normal are we talking about.
The problem was GE brought in Bell Curve for axing non performers, good for them. Everyone tried to copy but remember you can never develop sustained advantage from any system unless you understand the substance behind the form. So many organizations tried to follow and voila....... everyone was using bell curve.
Then came more problems, people who were paying out rewards found it a good way to easily segregate people and dish out salaries and increments. But that was also a flawed assumption. They were creating tomorrows problems. Real pay differentiation should be skill differences (capabilities) and resultant impact created for business. When you cant' do this you find the easy way out. Use something else which really does not do its job well (the bell curve)
Now everyone's talking about Doing Away With the Bell Curve. This is the seed for tomorrow's problem. The idea behind the bell curve was that you did a fair discussion elaborated to your team why A was different from B, and B was different from C in a convincing manner giving feedback twice in a six month period and finally when outcomes came no one felt he or she was a victim of the system that was unfair.
If companies were really sure their bell curve worked then the best thing to do was to put up on the notice board (intranet that so many have, or the notice board) highlight all the A banders with their achievements. Who would deny such open culture and when people see what was delivered for an A there would never be a complaint. Today all agenda's are hidden... Managers dont' want to give feedback. They just pass it as another HR bungling by bringing in the normal curve and escape the questions they cannot answer. Don't you remember the most quoted line after the Great Dictator ..... "You were great but ... we have a normal curve so you were pushed down"
Now doing away with Bell has become a fashion because Cisco's and Big Co's Did it but what is that you will do after Bell Curve is abandoned is not even simulated in the mind. If you really need to give up the bell curve ask the following
a) How will you award increases. If you think you will leave it to managers of teams to decide you are in for a great .... challenge. Managers will come back saying give me a spread, or they will end up playing GOD. The problem will be attrition due to unfair managers. If they become socialists distributing increases evenly you will end up losing your best talent to competition as your best performers will become average salaried people within 2 to 3 years.
b) How To Make them Give Better Feedback and Improve Appraisals: This was always the case, but how will that change happen. It needs deliberate attempts to understand what is meant by excellent versus what is mediocre in each and every work function. Then be ready for your compensation teams to start groping in the dark how to distribute merit increase, how to compare jobs and how to make people happy with the rewards system.
c) How will you promote people. Today it is generally based on High Performance as a lag indicator compared to similar groups. The down side of doing away with Relative forced Ranking is having a good way to identify potential that is scientific and predicts performance rather than scuttles performance in the long run.
d) Finally it is about asking What Next on Distributing Annual Increments: With Bell curve managers were seen as forcing people into buckets without proper reason (Read it as poor feedback giving practice). Without Bell curve managers will be seen as playing favorites or as being so non-discriminatory that their best performers will have no reason to stay back.
Just a couple of years down the pendulum will swing another way when maybe another CAPCO will start adopting the Bell and Everyone follows... without remembering that the last thing that can make your practice sustainable is the form, however the right substance behind the form is what needs to be understood.
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