Performance management programs must be more relevant
5 key factors determine performance today, says Subeer Bakshi, Consulting Leader, Talent & Rewards, Towers Watson
It has almost been a default position for organizations to use a five point rating scale to measure performance that results in a bell curve. Employees hated it, and there were many instances, especially in the US, where employees even took their employers to court on the unfairness of it all. Employers have found it difficult to reliably defend the bell curve.
Nicholas Taleb in his book, “Fooled by Randomness” had an entire chapter titled “The Bell Curve, calling it intellectual fraud.” A large body of research suggests that it is usually the ‘long tail’ that companies experience. In the most general terms, it means that top performers are even rarer than we have assumed and the bulk of the employees are below the mean of the performance threshold. Like many other things, performance patterns in the organization fit better with the Pareto principle (the 80-20 distribution) rather than a bell curve, and even here, it has a fractal nature. In a class...
Businesses in less hierarchical industries are more likely to abolish the bell curve
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