Bell-Curve Not Apt In Knowledge-Led Cos

In September, management consultancy firm Accenture will join the growing list of companies such as Google, Microsoft, Adobe and KPMG which have discarded the bell-curve or similar mechanisms for conducting annual performance appraisals of their employees. The move at Accenture is aimed at ongoing real-time feedback and spells good news for its 3.36 lakh global employees, nearly 30% of whom are based in India.

Typically , the bell-curve mechanism segregates all employees into distinct baskets–top, average and bott om performers–with the vast majority being treated as average performers. The reasons for the continued trend of companies discarding thebell-curve rating mechanism are manifold.

“Today , goals are no longer pushed from the top level to the bottom, but emerge through collaboration and are the result of a dynamic interplay between levels and various parts of the organization. To follow the typical bell-curve, team leaders had to re-categorize employees. Often good performers were labelled as average to fit the curve. This unseen hand of moderation resulted in disgruntled and disengaged employees,“ explains M P Sriram, partner at Aventus Partners, a HR consultancy and talent acquisition firm.

“We are shifting from an annual `performance management’ process to a new `performance achievement’ approach that includes realtime, forward-looking conversations about setting priorities, growing strengths and creating rewarding career opportunities for our people. The `performance achievement’ approach will focus on the achievements and talents of each employee. It will result in a holistic view of performance and potential and guide in appropriate decision making relating to rewards and career progression. Our leaders will spend more time coaching and talking with employees. We are on a journey and are committed to moving at the right pace o roll this out across the organization,“ Accenture-India confirmed in response to TOI’s queries.

This April, KPMG in India discarded the bell-curve and in reduced a real-time feedback approach. Employees are now given an instant feedback when hey complete an engagement: hey can thus work on their areas of development on an ongoing basis, and it avoids the year end appraisal related disappointments, if any.

“We have introduced this change for the current year (the performance year ending March 2016) and hence providing the requisite training and preparing the managers (responsible for giving the feedback) to handle the new process is all currently work-in-progress. Training and hand-holding our people is clearly a critical part of successfully managing the transition to the changed approach,“ says Shalini Pillay, head-people, performance and culture at KPMG-India. As this change requires a serious realignment in mindset, culture and way of working, the benefits of the new mechanism will not be immediately quantified.

The shift away from the bell curve or similar one-time ranking mechanisms seems to be gaining ground, especially in the consultancy and technology sector, where human assets (employees) are invaluable. Application of the bell-curve doesn’t suit a knowledge-driven workforce.

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. Another large consultancy, in the Big 4 league, has recently re-designed its performance management system. The new system is yet to be scaled up and rolled out globally and has not yet been taken up in India.

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Source: Times of India

Date: July 27, 2015


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