Disadvantages of the bell curve in performance appraisal

It compels the appraiser to use a forced rating instead of a fair one

This system is implemented department wise instead of the entire employee database and hence there
are chances that the worst in some departments are much better than the average in other departments
but still they are forced to rate below
With fewer employees, the categorization cannot be done properly, and the results are mostly
erroneous.
Too Rigid: Using the bell curve model for performance appraisal may be considered a rigid approach
for rating employees. Sometimes managers need to put employees in specific gradients just for the
sake of bell curve requirements. This happens more often when the managers teams are small.
The Bell curve model might turn out to be too rigid in cases where the employee strength in the
organization is less. Here the manager might be forced to put employees in specific ratings just for the
sake of bell curve requirements.
Managers are compelled to discriminate between employees according to these fixed percentages
irrespective of actual performance. Thus, the charge of inequity can be laid against the use of forced
distribution and the Bell curve.
Managers are compelled to discriminate between employees according to these fixed percentages
irrespective of actual performance
It is dependent on supervisors who judge the capability and contribution of employee. The supervisor
has to keep day to day physical record of day to day favorable and unfavorable tasks performed by
the employee, but as it is a time consuming task many supervisors do it just before submitting the
appraisal sheet to HR leaving ample room for errors and omission. This system is also open to bias
and prejudice of the supervisors.

Examples of Companies who switched from BELL Curve & Reasons why they switched
After a clutch of global giants, including Microsoft and Adobe, decided to kiss the bell curve goodbye
over the past year, back home Infosys, the country's second largest technology services company, too is
rethinking this statistical model as a tool to rate its 150,000-plus employees. Microsoft abandoned the
practice in 2013. Adobe, Juniper and Kelly Services did it even before that.
Says Srikantan Moorthy, senior vice-president, group HR, Infosys: "Performance rating will evolve in the
next 1-2 years. What it will transform into is difficult to say. The industry needs tools that take into
account individual contribution rather than just relative performance. The bell curve creates dissonance as
it limits the number of high performers."
Internet companies Google, Twitter and LinkedIn do not use the bell curve and a bunch of Indian start-ups
has taken a leaf out of their book.
However, GE, the pioneer of the bell curve, has loosened its hold on the curve, being more liberal in how
it assesses employees. Microsoft and Adobe Systems decided to end all ratings and put in place a system
that focuses on teamwork, collaboration, timely feedback, giving more flexibility to managers to hand out
rewards as they see fit.
Their move away from the bell curve was for reasons spanning too much focus on individual performance
(rather than team effort), unwanted internal competition, office politics and its propensity to discourage
employees from sharing resources and information with peers. Many internet era companies see the curve
as less relevant to meet demands of the knowledge workers.

A mid-tier software company has replaced the bell-curve with the performance-curve based on the long
tail method. The aim is to identify, reward and develop skills in hyper-high performers, high performers,
potential high performers, and so on till one reaches the end of the tail.
The difference being that employees are not compared against each other and there is no cap on the
number of people who can fall within a particular segment.
Leading organizations are scrapping the annual evaluation cycle and replacing it with ongoing feedback
and coaching designed to promote continuous employee development.

ALTERNATE TO BELL CURVE FOR APPRAISAL

Calibration
Calibration is a face-to-face process, in which managers who oversee similar groups review one anothers
employee-performance ratings. In these "rater reliability" sessions, supervisors discuss each of their
employees performance rankings and their reasons behind the evaluation. "A calibration session catches
the 'easy graders' and 'tough graders' and helps them rate their employees more realistically," Joanne
Lloyd writes on JobDig.com.
360-Degree Feedback
Instead of relying on one supervisor to evaluate an individuals performance, some companies ask
everyone with whom the employee interacts to weigh in. Thats the idea behind 360-degree feedback, a
technique that collects performance data from a number of stakeholders like team members, customers
and direct reports. When its done well, 360 programs allow all your team members to improve in key
areas that might be limiting their upward career path or actually causing major conflict within a team,
Eric Jackson writes on Forbes.
Management by Objective
First outlined by management whiz Peter Drucker, management by objective occurs when supervisors
work with employees to outline goals and desired outcomes. Managers evaluate staff members based on
their ability to achieve results. The advantage of the MBO process is that it allows employees to actively
participate in goal setting, according to the Society for Human Resource Management.
The Ranking/Rating System
The ranking system is a more structured approach, where specific performance variables are laid out. A
ranking system of any kind must have explicit variables that employers can refer to.
Examples of this might include revenue generated, overtime hours, ability to work with a group or overall
attitude.
The purpose here is to provide a quantitative score in areas that are not necessary quantitative, such as
general attitude. The purpose is to show which employees are performing well relative to a set of
variables that an employer finds the most important.
This methodology requires an employer to develop an in-depth grading system, similar to the way
students in school are assessed. This scale is then used to evaluate an employee success within a variety
of areas, such as technical skill set, teamwork and communication skills. There is typically a minimum

required grade an employee must receive in order for the performance appraisal to be considered a
success. Those that do not make the grade are often put on a performance improvement plan. This method
is viewed by some management theorists as an egalitarian way of measuring individual performance.

Long Tail (Power Law)

The long tail is a frequency distribution pattern in which occurences are most densely clustered close to
the Y-axis and the distribution curve tapers along the X-axis. The long tail refers to the low-frequency
population displayed in the right-hand portion of the graph, represented by a gradually sloping
distribution curve that becomes asymptotic to the x-axis. In most applications, the number of events in the
tail is greater than the number of events in the high frequency area, simply because the tail is long.
A Power Law distribution is also known as a long tail. It indicates that people are not normally
distributed. In this statistical model there are a small number of people who are hyper high performers,
a broad swath of people who are good performers and a smaller number of people who are low
performers. It essentially accounts for a much wider variation in performance among the sample.
It has very different characteristics from the Bell Curve. In the Power Curve most people fall below the
mean (slightly). Roughly 10-15% of the population are above the average (often far above the average), a
large population are slightly below average, and a small group are far below average. So the concept of
average becomes meaningless.
In fact the implication is that comparing to average isnt very useful at all, because the small number of
people who are hyper-performers accommodate for a very high percentage of the total business value.