1. VOLVII/ISSUE5/MAY2016
Organizations today are intensely focusing on developing
their leaders through innovative developmental programs
SPECIAL STORY
COVER STORY
The Exchange of
Learning in XChange
– A Leadership Consortium
Talent Analytics 2016
BIG INTERVIEW
Ron Kaufman

2. |may 201626
performancemanagement
rohit hasteer
Don’t blame the bell
How does the Bell Curve actually prove useful and what is it that
organizations can do to make their performance processes effective
T
he Bell Curve has been the
elephant in the room for
quite a while now in most
organizations. It is the easy
scapegoat that’s been used by
the management, HR, and the managers to
tell an employee as to why their rating is
not what they feel it should be. It frustrates
everyone and yet most organizations are
still struggling to find a way to live with or
without it.
Let’s look at what the Bell is and isn’t
and how organizations are now relooking
at performance management philosophies
to make them more effective.
What is the Bell Curve or Normal
Distribution?
To put it simply, it is the phenomenon
that says that if you take any reasonable
sized population sample, say a classroom
of 60 kids, a bulk of them would be of
average height, a few who are relatively
taller or shorter and one odd who are
very tall or very short. This is what the
Bell tells you;however, what it does not
tell you is whether you have the ability or
need to differentiate the given population.
For example, unless you need to form a
basketball team you don’t need to really
care what the height of the students is
and even then you’d probably create two
categories only, students tall enough for
Basketball and others.
Now suppose you decide that everyone
who is 5’5” and above is tall enough for
basketball, but the scale you have has
only feet markings which means you
know for sure if someone is 5’ or 6’ but
not whether someone is 5’4” or 5’6”. The
ability and need to differentiate should
form an integral part of the performance
management philosophy of an
organization. This is where organizations
often go wrong by simply implementing
a 4 or 5 point scale with fixed percentages
rather than developing their own thought
and philosophy. So then if not for defining
fixed population percentages, how does
the Bell actually prove useful and what is
it that organizations can do to make their
performance processes effective?
1. Focus on the goals: If you’re not
using fixed percentages, the organization’s
ability to differentiate comes into focus.
Quite often it is observed that employees
come out of performance appraisal
discussions frustrated, where they feel the
manager has taken a biased view. The root
of this dissatisfaction often lies in poor
quality of goals setting. While everyone
talks about SMART goals, not all manage
to get it right. In organizations still in
the early stages of the maturity curve,
The ability and need to differentiate
should be an integral part of the
performance management philosophy
of an organization

3. may 2016 | 27
performancemanagement
what is required of HR is to get involved
in the goal setting process to ensure that
SMART goals are not just talked about
but also created. Goals that can’t be
measured on pure quantitative basis have
good qualitative or quasi-quantitative
parameters defined. Also that managers
while setting the goals and targets also
think about how they will define a picture
of success. This ensures that at the time
of appraisal there is clarity around
whether that picture of success was
achieved or not.
2. Empower the managers: Instead
of using the Bell curve to force managers
to segment employees in a particular
proportion, give them helpful guidelines
to make the right appraisal decisions.
One of the helping guidelines can be that
the average rating of the team should
broadly be aligned to the rating of the
department or the Manager i.e. if a
Manager is rated say 4 it’s not possible
that the team’s average rating is 2.2. The
only way the manager could’ve performed
is when his/her team performed and
vice-versa. The other guiding input that
acts as a counter force and helps bring
equilibrium is that the pay pool should be
predefined — the higher the number of
top raters the lesser value of additional
increment they’d be able to give them. This
gives managers a need to differentiate
rather than differentiation be imposed on
them. Without a fixed percentage cut-off,
the appraisal process often becomes an
iterative discussion and the Bell Curve
then becomes a helpful analytical tool
to help have better probing of appraisal
decisions. This is just one of the possible
ways of empowering decisions. Some other
methods frequently used are providing
discretionary flexibility to managers
for increments, de-linking partially or
completely the performance discussion
from the increment process, etc.
3. Leverage the power of technology:
One of the more important HR systems
that an organization should think
about investing in is the performance
management systems. A good tool will
help link organization goals to individual
goals by allowing individuals to see
goals at organization/departmental
levels and cascade them whole or as
sub-goals into their own goal sheet. This
provides individuals a linkage to overall
organization strategy. In addition, provide
dashboards for managers to be able to
see at a macro level. Managers often
get handicapped since they are making
decisions on an individual basis. Ability
Rohit Hasteer is the Chief Human Resource
Officer at PropTiger
About the author
to calibrate one’s own decisions is
an important ingredient of making
fair decisions. A technology-enabled
performance process not only makes the
process more convenient but also enables
analysis and governance.
4. Communicate: The success of
a performance management process
lies as much in execution as in the
design. While a lot of thought goes into
designing, the execution part often
has a lot of variation not only across
but within departments. One of the
more effective ways was to use videos
during awareness sessions. These
videos were a portrayal of good and bad
appraisal discussions. With today’s high
definition cellphones, creating these
videos is actually fun, watching these
amateur videos is entertaining and
most importantly in a light vein very
important messages get imbibed.
5. Analyze, experiment and
loopback: Coming back to the point
around need and ability to differentiate,
it also implies what works for one will
not work for another. Companies are
experimenting with multiple appraisal
cycles during the year keeping in line
with their business dynamics. Others
are delinking long term career growth,
variable and/or increment from
performance appraisals to reinforce
focus on performance rather than
on compensation. Some are dabbling
with doing away with “appraisal
discussions” entirely and instead
making managers respond to questions
that reveal the rating based on how
valuable they find the employee’s
contribution, desire to keep the person
on the team, readiness for promotion or
risk of low performance. Finding out
what works or doesn’t would require
a few iterations and experiments. An
important pre-requisite to be able to
do that is to collect data. From goals
to appraisal ratings, to employee and
manager feedback, if analyzed together
in various combinations, can generate
good insights which can act as inputs
to improve the process further with
the end goal in mind that it is a process
to both determine as well as improve
organization performance.
A technology-enabled
performance process not only
makes it more convenient but also
enables analysis and governance