The bell curve model has been universally disliked, but, having a precise alternative to the same becomes a grey area, as it is subjective to companies falling within a particular sector and practising a certain functionality.

For years, organisations have been talking about reinventing Performance Management, but the newer ways of working since the pandemic, the rise of hybrid work models in particular, and, the desire for employees to be seen as people not just workers, makes this a critical moment to rethink the purpose and value of the Performance Management programme.

Even before the unprecedented challenges of 2020, heads of organisations in both public and private sectors sensed a gap between the perceived potential and the actual performance of their employees. And hence, companies are redefining their ineffective and demotivating Performance Management systems. It used to be once a year HR compliance programme designed to weed out the low performers and present a justifiable reason to give one person a certain raise and somebody else another raise. Today, such an idea of Performance Management is archaic; it hurts employee engagement, morale, productivity, and ultimately, business growth.

Making Room for Competition

Given that ranking is ingrained into our belief system, it makes way for competition among employees to hold the highest spot and even motivates the low rankers to work towards the betterment. On the other hand, it creates a feeling of incompetence and demotivation depending on how it is perceived by the individual. However, good or bad, ranking is something we cannot let go of since this is something that we have been conditioned to include as part of our existence. Recently, one has been pondering over the news of how companies are parting with the performance bell curve. One believes that the bell curve is unidimensional and a forced Performance Measurement model makes the process inequitable for everyone.

But in reality, bell curves are not forced. They do tend to happen naturally when done appropriately. For instance, if one student scores 99% and another scores the lowest at 60% in a class of 50 students, the remaining students fall between these two extremities. In other words, somebody comes at the top and somebody comes at the bottom and the business is no different. We need these distributions to maintain high standards which are required for the business, as these differentiators aid in differentiating rewards. So, even though we may not exactly like the implications of such ranking, in the foreseeable future there is no respite from the necessity to rank employees in the workplace, but, the purpose of ranking is the KING. If that goes wrong, the entire Performance Management system will crumble, irrespective of the model employed.

The bell curve model has been universally disliked, but, having a precise alternative to the same becomes a grey area, as it is subjective to companies falling within a particular sector and practising a certain functionality. A few organisations practice the 9-box model to categorise employees into 9 buckets based on their potential and their performance. It incorporates a two-dimensional approach that allows the organisation to understand the performance-potential grid that an employee occupies, which constitutes the basis of necessary individual development or organisational changes. But, it poses its challenges of developing confusion and resentment among employees if the assessing managers are incompetent or if two managers assess employees differently on their performance and potential.

An Alternative Approach

A lot of organisations also incorporate other performance measurement techniques like the Behaviourally Anchored Rating Scales (BARS), Balanced Scorecard and the most widely used 360-degree approach. These models certainly look wonderful on paper, and, these are not impossible to execute, but they certainly form a herculean task to follow consistency. A PMS model needs to be employed by entirely understanding the business process orientation. A particular model may work well in a knowledgedriven company, but, may fail in a sales-driven company or vice-versa. Getting rid of the bell curve is not the solution, but getting rid of the bureaucratic annual review process and the behaviour related to them is crucial, and ultimately, companies can focus on gaining a higher level of performance from the staff.

Apart from these alternatives, I often wonder why is a regular ‘conversation’ or ‘feedback’ portrayed as a replacement to the bell curve? Bell curve or no bell curve – was not providing regular feedback an advisory prescribed to managers for years now? And, are our line managers prepared to chart out clear goals and objectives for their people? If managers are unable to clearly define and measure goal achievement, we may land into chaotic situations for compensation distribution. The unprecedented times of COVID-19 and the national pandemic have drastically created havoc in the way we function with millions losing their jobs/working on half-pay.

In such a crisis, it is imperative for the senior managers to train and coach their line managers to not merely view their employees as data points on a smooth curve, but, treat them as unique individuals with diverse strengths and weaknesses which may be beneficial to the business in a certain way. There exists a meagre level of clarity for a manager to evaluate and understand what works better for the organisation. A monthly one-on-one review or a half yearly/annual review? The matter of concern here should be that irrespective of the model employed, the reviews must be more about the person - the aspirations, the concerns, the progress, the learning, even frustrations, and not just about the performance/ behaviours at work! This is taking Performance Management to the next level, and, we, as HR professionals must delve deep into this aspect. Today, we operate in the VUCA world where everything changes within hours. In such times, the pandemic has disrupted the way employees are assessed and poses a question on the relevance of a lot of standard practices. How can organisations re-envision their Performance Management process to suit the evolving changes in the organisational environment? I believe that irrespective of the model employed, continuous communication has played a key role during the pandemic. The world is faster, leaner, and more agile than ever, and this trend has helped the teams figure out loopholes quickly, and, fix them on a real-time basis with the assistance of technology and IT teams. There is a need to shift from continuous evaluation to continuous communication and the engagement levels will automatically soar high.

We take the concept of coaching managers on a lighter level as compared to the other aspects because they are expected to manage everything and everyone. However, taking responsibility to evaluate someone else’s performance can prove to be a tough task. More often, managers are unable to draw a clear demarcation between conversing and providing feedback. This leads to a growing need for companies to inspire and motivate performance, which makes it critical to innovate in coaching. Without great and frequent coaching, it is difficult to set goals flexibly, and often, to help employees stretch their jobs, or to give people greater responsibility and autonomy while demanding more expertise and judgment from them.

The Future of PMS

The future of the Performance Management system is based on three C’s- Communication, Collaboration & Coaching. I believe that these are the pillars for any PMS model to survive. In the hybrid world, communicating with empathy, with a focus on listening, will be critical. PM appraisal protocols are undergoing much-needed review and redesign. Currently, employee development and appraisals are transitioning to a regime of continuous, real-time feedback and coaching processes that are combined with periodic manageremployee interactions. The approach to Performance Management needs to change in alignment with the change in the way of working. A fair differentiation is necessary because without differentiating rewards, topperforming employees would not feel appropriately rewarded, which will lead to demotivation and they would leave. For instance, Tata Trent follows a normal distribution curve and also offer flexibility to our HODs.

Ranking of the employees is an imperative evil, but, instead of forcefitting the employees into a curve, it is important to make the process collaborative and continuous. In the near future, performance ratings will reflect more context and empathy. Implementing regular check-ins and developing a one-on-one platform incorporated in any PMS model will help in identifying the developmental needs of employees, instead of relying on year-end dialogue exchanges which loses relevance by the time the process starts. It is equally important to integrate both personal and professional goals of an employee in the review. Because, at the end of the day, we are discussing the enhancement in performance and not a container-tight PMS model. Changing times have led to an upgradation in the evaluation, but with the correct intent and purpose, any model would work wonderfully for employee development.

So, distribution curve or no distribution curve, and, even if it is difficult for organisations to let go of the ranking method completely, incorporating a more continuous and collaborative approach in managing employee performance can transform hard cold rankings to milestone indicators on an employee development journey.