Beyond the Bell Curve: How HR must seize its glasnost moment!

When I wrote my post ‘Kill Bell: Why we must let the Bell Curve pass, unlamented’ several HR professionals reached me to ask ‘What after the Bell?’ That is, both, difficult and easy to answer. Difficult because one is sensitive to the fact that several HR peers are struggling with designing the entire performance management process without the curve. Easy, because world-class companies, Indian and foreign, have already got cracking with the new process, demonstrating design thinking of the highest order. This, in fact, is HR’s glasnost moment. For those who came in late, glasnost is a celebrated Russian word that entered global consciousness and the English lexicon in the mid-1980s when many of today’s millennial stars were shedding their milk teeth. The word gained sharp currency because Mikhail Gorbachev, the last leader of the Soviet Union, a dictatorial communist state, used the word to describe the entire process of democratic liberalization that was ushered into the country at that time. Glasnost stood for freedom, transparency and empowerment and the world welcomed the word as much as what it represented in the Soviet Union. It is ironical that glasnost happened around the time that the bell curve gained ascendancy in the management world as a tool for performance management!

It is relevant to note here that the take down of the Bell Curve system has coincided with the rise of the technology- and learning-driven Agile management model. The Agile movement harnesses technology to drive a customer-centric management that emphasises small, smart teams, easy and modular access to competencies and open networks within organizations. The monolithic, singularly opaque, Bell Curve system is an anti-fit to Agile with its stress on learning and transparency. But, more on Agile in a future post.

Now for the question: how are organizations coping with the post-Bell Curve era? Accenture, for one, is replacing it with real-time ongoing feedback.  Last year Accenture put forth its vision with this statement: "We are shifting from an annual 'performance management' process to a new 'performance achievement' approach that includes real-time, forward-looking conversations about setting priorities, growing strengths and creating rewarding career opportunities for our people... Our leaders will spend more time coaching and talking with employees.” As their CHRO, Ellyn Shook, put it, Accenture is done with “managing, measuring and administering a process...”

Which brings me to a remarkably prescient blog on betterworks.com. In 2014, the founder of Better Works, Kris Duggan, noted that Google has never graded on a curve and its focus on making sure every employee sets quarterly Objectives-Key Results (OKRs) has led to increased transparency, accountability, and a relatively flat organization. “Not one person in our company is a low performer and certainly no one is a very low performer”, Duggan quotes Google’s then HR Head, Laszlo Bock, in the blog. “In fact, it’s quite the opposite. We have more than one hyper-performer and so does every innovative company that I know”, Bock adds. This was in June 2014. He writes that the conversation with Bock convinced him that the bell curve era was over. The Kill Bell movement started soon after, with companies like Microsoft and Accenture leading the way.

IT major Wipro is implementing a new evaluation system which would stress more on frequent, quarterly feedbacks, which were earlier a one-time annual event in its Bell Curve era. “Traditionally, we've looked at elements including bell curves, building differentiation, categorization, etc. (Now) we want to make the process of giving feedback more frequent and our performance management system to be an ongoing coaching based process rather than just a one-time annual exercise," says Saurabh Govil, Chief HRO at Wipro. “The entire appraisal process is making a shift towards how we develop people, rather than say what you have not done."

Infosys, another technology major and also a Bell Curve- apostate, has put in place a performance appraisal system called iCount that seeks to reward individual performers on the basis of specific targets. No points for guessing the key features of iCount: feedback and reviews throughout the year. The same is true of IBM’s redesigned performance management process, ‘Checkpoint’. Employees enjoy greater flexibility in Checkpoint with the option of resetting goals in the course of the year. Conversations around individual performance will be more frequent and short-term goals can be set. CISCO’s Francine Katsoudas says that the global tech giant is trying to strengthen a culture of dialogue and feedback in the post-Bell Curve era.

The demise of the Bell Curve has engendered an entire re-imagination of the performance management process as we know it. The annual review is well and truly gone. The emerging landscape of performance and its measurement is nothing as we knew it even a couple of years back. In that sense the idea of management is moulting and the colours of the emergent butterfly are as yet unclear. As the graphic here illustrates, there are three elements driving the design of the new performance management system in the Agile era:

1.    Performance conversations: conversations between the individual and a wide range of stake holders, not just the boss, on what has been done and how to do it better. It is not an autopsy as it was in the past, but real time, forward looking, non-threatening dialogues on improving and enjoying work;

2.    Performance resets: the process of resetting goals and recalibrating indices such that changes in business landscape are factored in early and quickly without waiting for the annual health-shot.

3.    Performance coaching: the lynchpin of the new design, performance coaching ensures that the potential of each employee is harnessed for enterprise-wide benefits. The coaching competency is now vital for one’s effectiveness in a managerial role, HR and non-HR, and helps propel the individual and the organization towards better performance.

The task before HR now is to set the calendar for such actions and make the new performance management credo a seamless part of the organizational composition. Caveat emptor: hark back to what happened to the Soviet Union a few years into the glasnost movement. It ceased to exist! The iron-curtained, gulag-ish country fissioned into several independent nations – 15, as a matter of fact, of which Russia is the largest one. The beautiful countries of Ukraine, Latvia, Moldova, Kazakhstan and Georgia were, among others, once in the suffocating grip of the totalitarian Soviet Union.

Something similar, and as radical, is now in the offing in most organizations: autonomous, self-replicating, competency-driven teams might break away from a centralizing tendency to carve their own course. It has happened in TCS, and Infosys is now considering spinning off businesses into many min-Infys, each with its own mini-CEO. As Prithvi Shergil, the CHRO at HCL Technolgies puts it, an entire cultural change process has set in. The challenge before HR is to ensure that this is managed well for the greater good of the entire organization!