What, The Bell Curve Lives?

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Just when I thought the performance ratings and the dreaded bell curve were dead, the Washington Business Journal announced that a major government contractor in Washington, DC is doubling down on the bell curve.  But wait a minute; this is not just your typical bell curve, but a new extreme level for assigning managers’ performance quotas.

The new rating system looks like this:

  • 1-Exceeds expectations: 15 percent
  • 2-Meets expectations: 45 percent
  • 3-Partially meets expectations: 30 percent
  • 4-Does not meet expectations: 10 percent

The Washington Business Journal also goes on to say, based on a memo obtained from the company implementing this, those who receive a “1” rating and were considered top performers will receive a merit increase.  So, I guess better luck next year or let me show you the door to the competitors, for the other 85% of the employee population.

Basically this rating system is saying that 40 percent of the workforce sucks and 30 percent are average. Good thing they have the remaining 15% to do all the work and to receive the pay raises, bonuses and promotions.  I’m all for weeding out the under-performers in an organization for many reasons, but with such a high percentage of employees receiving re-determined ratings below the line, I have to believe some top talent will be causalities of war.

From reading the article, it sounds like the goal is to raise the performance bar in order to build a high-performance, results-driven workforce.  This is a goal many organizations strive for, but what happens when some of the top performing talent do not make it into the 15% “Exceeds” bucket?  I think we all know the answer: They take their talents elsewhere and in the government contractor business, it is usually to a competitor.  The last thing you want to do in the middle of a war for talent is give your company a self-inflicted wound.  No doubt you will run the risk of attrition of top talent, which will put pressure on the acquisition of new talent in a very competitive market.  They most likely will back-up from being a results-driven workforce long before achieving that goal, and in a current tough market, the result is a loss of real dollars and negative impact on shareholder value.

I’m curious as to how this company plans to execute on the performance rating process?  And how will they identify the 15% of top performers?  In my experience, it comes down to the manager who can pitch his employee the best or win a couple rounds of rock, paper, scissor.  Either way, top talent will be pushed down to a lower rating… killing their motivation, engagement, productivity and loyalty to the employer.

There are other ways to create a high-performance culture within an organization beyond an extreme rating system.  Start with a “Play To Win” corporate value system that rallies employees around success. Recognition programs reinforce the right behaviors and help drive positive results. Talent review programs identify the top talent and the competencies and skills they exhibit as top performers.  Provide meaningful work as well as development opportunities for talent to grow both professionally and personally. And yes, cut the dead wood.  Help the under-performers move on to your competition but don’t let your top talent go with them.

The debate around performance ratings and bell curves is not over and will continue well into the future.  Many companies will continue to attempt to build a better mouse trap and develop performance management programs that will give them their intended desired outcome.  However, when doing so, stop and ask yourself this question: “Will rating the majority of employees as average to under-performers and not provide merit increases, bonuses or promotions create the high-performance organization needed to execute on the long term business strategy, deliver shareholder value and beat the competition?”  If the answer is yes, than let me recommend a two-level rating system: 1-you are awesome and 2-you suck.

FOT Background Check

Dan Carusi
As current Vice President & Chief Learning Officer for Deltek, Dan Carusi doesn’t know which he likes more – teaching or learning.  A father of two, Scout leader and coach, Dan is often learning as much from the kids as they are learning from him (or possibly more).  With more than 20 years of experience, Dan is responsible for overseeing Deltek University and the Talent & Learning organization, where he oversees all aspects of talent management, curriculum development, operations & delivery, global employee & customer education and Human Capital consulting – often using what he learns from the kids as tools for teaching, with the end goal of making life-long learners out of everyone.  Teach Dan something at “email”, LinkedIn or @DanielCarusi.

2 Comments

  1. The visual aid provides the broader bigger better picture of the true bell curve. The bottom 15% are rejected at the door as non hires. Admittedly, occasionally a mishire slips through and is hopefully robustly identified during the probationary period. Its okay to say, this isn’t working out and releasing the employee. Its not okay to hope the employee changes.

    Either, this company has flushed the downward spiral spin. I doubt this will be a path towards economic success.

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  2. Dan, another great post at FOT! We’ve seen this before, we will see it again and that should be of concern as companies fight in this war for talent…. we all want “A” employees who are very talented… the Marines want them, don’t always get them – do weed them out at boot camp fi they are not a fit… and train and develop those who succeed at boot camp to excel…. at a variety of functions… into their future..so why don’t companies get this? Al

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