Years of being in HR have engraved the concept of the performance bell curve into my brain. “It’s not possible that everyone in your team is a superstar” to “You must force rank all your employees according to a normal distribution” are phrases coming out of most HR practitioners’ mouths at performance appraisal time, and for the longest time, I believed and preached it. It wasn’t until I was rated an Average Performer because we had a small team – which meant only one person was allowed to be rated a High Performer – that I realised how flawed the bell curve system was. This Mean HR Lady can be (and has been) called many things, but AVERAGE is pure blasphemy.
This article by HR consultant Josh Bersin “The Myth of the Bell Curve: Look for the Hyper Performers” hits the nail on the head explaining the limitations of the bell curve. We should instead, look at a Power Law distribution, where there are very few Hyper Performers, a large number of Average Performers and a small group of Lower Performers. It’s easy to spot Hyper Performers. These are the folks that make the difference between a successful project and one that tanks. They are the employees that you would consider bending rules and making exceptions for because they are that valuable to the business.
Under a bell curve distribution, these Hyper Performers would be rated High Performers and rewarded accordingly. But what happens when you have more Hyper Performers than the allocated percentage in the top end of a normal distribution? Invariably, a few of them drop to the Average Performers group, receive lower rewards, become demotivated, and eventually leave.
Josh Bersin expounds that under a power law distribution, companies recognise that the room for Hyper Performers should be limitless, and reward them exponentially, instead spreading the bulk of their budget pool thinly across a large number of Average Performers – a sentiment I heartily agree with. He offers several other great insights and I’d highly recommend any HR practitioner to read them prior to embarking on any type of reward and performance management system.