Bell curve has ruled the corporate world, particularly the Multinational Companies for the last few decades. This assumes that a team has an average level of performance; some people in the team perform better than the average mark and some do worse than it. Rewards and recognition are structured in direct correlation with the performance levels. All adults like fair treatment and hence, they are expected to appreciate the concept of rewarding an above-average performer better than the rest.
This appears pretty simple, but in practice there are a few challenges in execution.
Firstly, establishing the average is not easy, especially in the current times of dynamic market conditions. At times, a large deal or the absence of it can take the performance to a whole new level. A new market, a new team, a new tactic of the competition, a new technology or a new regulation : any one or more of it could show the performance in an all-new dimension. Many of these factors aren’t in direct control of the person. Over-performance or the lack of it could just be a coincidence. Fair enough, for a stable environment, the normal or the average is definable. But, in many other cases, it is not and hence, a fair target is difficult to define right at the word ‘go’. Thus, bell curve doesn’t fit here!
Secondly, we all understand that the results matter and the means or the efforts deployed to achieve the results are equally important. However, many organisations give a huge importance 70% to 100% weight to the results. This doesn’t promote sustainability of high-performance culture. Efforts become far more important than the results when the environment is very dynamic.
Thirdly, there are many instances where the success of an organization depends upon the success of several teams working in sync with one another. In such cases, there might be islands of excellence in the organization, yet the desired results are not produced at the level of the organization. This presents a dichotomy of individual and the team. Usually, it’s not an easy situation. Consider a cricket team where all the 11 players have to work in unison. We have seen several instances where just a couple of players showed brilliant performance and the team lost the game. I believe, in all such situations, the ground rule has to be ‘team first, individual later’. Hence, the key performance indicators have to be a combination of behaviours towards a team results and individual contribution.
Similarly, there are situations where all players in the team contributed more or less equally. Do we apply bell curve here? Do we say that 70% performed at an average level, 15% under-performed and the remaining 15% out-performed? Many organizations do this; it’s merely an exercise to force-fit people into various performance buckets : a meaningless statistical jugglery! This doesn’t help bind the team together, diverts energies into securing a place in a certain bucket and grape-vining about the methods used. Hence, all of these are counter-productive for the organization.
Rating or scoring one’s behaviours and results are akin to the examination system or assessment methods used in schools and universities. This works well as long as we use it to establish equivalence or compare alternatives. The moment we copy-paste it for an organization or a team’s performance, it gets into dysfunctional zone!
To summarize, bell-curve as a statistical tool to measure performance of a team is not helpful to build a team and foster it. Choosing the right parameters to describe performance is the first step; then, it’s setting the right targets; and finally, it’s about the behaviours and the effort deployed to achieve the results. That’s like a High Performance Organisation!