There is a long standing belief in business that people performance follows the Bell Curve (also called the Normal Distribution). This belief has been embedded in many business practices: performance appraisals, compensation models, and even how we get graded in school. (Remember “grading by the curve?”)
Research shows that this statistical model, while easy to understand, does not accurately reflect the way people perform. As a result, HR departments and business leaders inadvertently create agonizing problems with employee performance and happiness.
Witness Microsoft’s recent decision to disband its performance management process – after decades of use the company realized it was encouraging many of its top people to leave. I recently talked with the HR leader of a well known public company and she told me her engineer-CEO insists on implementing a forced ranking system. I explained the statistical models to her and it really helped him think differently.
Does human performance follow the bell curve? Research says no.
Let’s look at the characteristics of the Bell Curve, and I think you’ll quickly understand why the model doesn’t fit.