Bell curve in performance management
Who started it?
The origin of bell curve dates back to the 1980s, when late Jack Welch, former Chairman and CEO of General Electrics (GE) developed this system with the goal of bringing in objectivity in the process of measuring and distinguishing between the high and low performers in the organization. During a time when the economic reality at GE demanded efficiency and operational excellence, the company became well-known for its hard-charging and intense approach to performance reviews.
The bell curve is a mechanism aimed to weed out?under-performers?& move?towards a high performing organization, a concept that in today’s age poses questions on its validity courtesy the high number of organizations which are already above average on the performance curve.
The biggest disadvantage of the bell curve in a compensation liked performance management system is that the organization will end up spending large portions of its compensation allocation budget on the average performers or those on the mid-range of the bell curve.
How is GE Performance Management process today?
Under the new direction of CEO Jeff Immelt, GE began to shift from annual performance reviews to a system that is supported by a simple, contemporary smartphone app, designed with the sole purpose of facilitating more frequent communication and meaningful conversations between managers and employees.
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Which other companies had ditched bell curve performance management?
Today, the likes of Accenture, Google, Microsoft, KPMG, Cisco, GE (the company that pioneered this model) are drifting away from the Bell curve model to a more practical and concrete ways of motivating higher performances amongst employees.
Conclusion
Most companies are still using bell curve performance management mainly due to legacy reason. There is no right or wrong about it because what works for a company may not work for another. What is proven effective today regardless is that providing constant feedback instead of once a year will help greatly to improve performance, not just individual, team and organization performance too.
At Talreso Consultancy and Advisory , we have great insights from seasoned consultants in our team who would love to review your existing performance management process and advise you the best foot forward in the fast changing world today. Ask us today at [email protected]
“One thing’s for sure. If we keep doing what we’re doing, we’re going to keep getting what we’re getting. One definition of insanity is to keep doing the same thing and expect different results.” Stephen R. Covey
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DGM | Tech and SaaS
1 年While acknowledging the limits of the bell curve, I personally believe that the Bell Curve is a valuable tool where objectivity plays a vital role. It brings objectivity to performance evaluation, ensuring fairness in rewards and recognition. Moreover, it fuels healthy competition, motivates growth, and helps allocate resources wisely. By aligning goals with actual performance, it inspires sales teams to aim higher. While it's not a one-size-fits-all solution, I believe it fosters excellence and continuous improvement in sales. https://www.dhirubhai.net/posts/412sahil_linkedincommunity-leadershipexcellence-performanceevaluation-activity-7104136468209569792-WASF?utm_source=share&utm_medium=member_desktop
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Founder and CEO @ IntelliCoach Pte Ltd ? ICF-accredited coaching skills training for Leaders & HR Professionals ? Exec Coach ? ICF PCC Coach ? SHRM-SCP ? Father of 4 ?? ? Rooted in ???? & ????
1 年This also perpetuates the outdated thinking that coaching is only for ‘poor performers’. Everyone benefits from it. And motivated high performers who work with a strong coach probably benefit the most!