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BW Businessworld

No Belling The Cat: Corporates Must Focus On The Curve, The Learning One

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Last week, a new movie release captured attention and became centre point of discussions on how even though it was a performance led flick with most of the actors demonstrating competitive talent and skills, the content was lacking which did not result in making it a blockbuster. 
Unfortunate but a reality!
Now, coming to the corporate landscape and detailing the performances of employees, the state of affairs will possibly be more or less similar. The month of March or the closure of financial year usually also witness salary hikes as per the annual appraisal exercise. Performance as we see is application of one’s insights, earned over the period of time with experience over and above the basic qualification - a pre-requisite for a certain task. Once performance is directed in form of actions as per talent and skills in conjunction with organizational goals, situation and challenges, it sets a certain context for the actor i.e. the employee. The actor is accountable for applying his talent to best possible use as per the given context irrespective of the end result in an output driven economy. The goals and actions are collaborative and vision and directions are therefore shared within the organizational framework creating a like-minded community thriving in a certain kind of cultural climate formed over many years of rigorous hard work and compliance.
In large organizations the distribution of performance typically follows what is termed as a ‘bell curve’. It is either found de facto or is created by means of setting targets, KRAs and other rules so that it appears to follow a normal distribution in performance. A minority underperforms and a minority exceeds in performance with the majority delivering as expected of the hires. This is a usual or a ‘normal’ looking bell curve.  When it is skewed towards left, it is wanting and when towards right, it is positive for a company being able to meet organizational goals. 

While Bell Curve has been excessively written about by renowned global psychologists and debated by esteemed anthropologists, it arguably remains the most widely accepted and applied method of performance appraisals by most of the Corporates across the world. It does help in validating IQ and comparative excellence, a necessity of an appraisal exercise. While it is also administratively easy for HR to adopt Bell Curve as a performance assessment tool, it should be used largely for the long term benefits it may yield for performance management i.e. to retain, reward, reprise and build a culture of promoting highly motivated employees around it. While there is no harm in opting a ‘Bell Curve’ analysis as there are proven benefits and corporate history to support its existence and use, following are few demerits that must also be viewed objectively to make better use of a tool like it:
  • Bell Curve measures performance largely on basis of targets that are as per company and not as per industry hence cannot be a means to analyze a candidate basis industry benchmarks 
  • Bell Curve may not work in places where there are no set targets or there are variable targets for e.g. challenging tasks and roles in a R&D set ups or in a department where strategy or creativity and innovation are the KRAs rather than any other parameters that may be quantified against set targets and those that are achieved.
  • HR needs to be extremely cautious right from the pre-conceiving stage of setting up targets with manager of the candidate; each and every process must be followed up without missing any crucial links. 
  • Categorization of job or roles is a pre-requisite. Innovation, creative or strategy led or R&D oriented jobs may have a different approach of marking. A combination of bell curve with performance level reward offering could be an alternative method. Bell curve may ideally suit maintenance or operational job descriptions. 
  • Unexpected performance must be complimented with unexpected rewards, but most of theorganizations have a cap to rewards and that may creates a lot of negativity in an employee. 
  • Margins between the lowest and the highest minorities in the normal distribution should be viewed closely; upper limits or cut off parameters must have some amount of flexibility or grace. It falls on the HR and the manager to objectively seek solutions as why an employee with visible potential could not reach higher levels of performance, what it will take to help him get into the ‘superiority’ slot from a ‘mediocre’ one. 
Nobel-Memorial-Prize-winning economist James Heckman observed that The Bell Curve's analysis is based on the AFQT which was designed to predict success in military training schools and that most of these tests appear to be achievement tests rather than ability tests, measuring factual knowledge and not pure ability.
So having said that, the film’s success may largely be visible with its commercial success of hitting the blockbuster charts, but ideally what remains as context or story told is what gets stored as fond memories in viewers’ minds. I am unsure if Satyajit Ray, Hrishikesh Mukherjee, Guru Dutt or Bimal Roy made all their movies as instant hits, but what we certainly know they are counted amongst the finest film makers India ever had. It doesn’t stop here; we have a line up coming from names like Sanjay Leela Bhansali, Mani Ratnam, Zoya Akhtar et all. Like the film makers gradually learn the art of creating unforgettable content, HR and top management in Corporates must also learn how to create congenial context for their employees.
(The author, Yasho V Verma, is a management thinker and philosopher)

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