How to Apply the Bell Curve to Employee Reviews

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Not every employee can be above average, but sometimes the performance review process can make it seem as if that’s the case. Managers hoping to bolster the prospects of their employees or those reluctant to be negative can make it difficult for companies to recognize stars or determine the weaker links when layoffs are needed. Requiring managers to rank on a bell curve eliminates this problem, though it creates others as it does so.

Follow the Pattern

A bell curve assumes that a company has a normal distribution of talent. That’s a statistical term that means most people are within two standard deviations of average, and an equal number of employees fall on each side of the divide. A small number of high achievers rest on the far right of the bell curve, while the few worst-performing workers are on the far left. Applying the bell curve to employee reviews means making sure your employee rankings fall into that pattern, with most being ranked as average.

Restricting Rankings

To apply the bell curves requires rigorous limitations on employee ratings. In many cases, it restricts how many employees can be given the highest possible rating or requires that one out of every 10 employees receives the lowest possible score. In a smaller company, this might mean that the owner is in charge of the categorization and rates everyone against all other individuals. In larger companies, the bell curve may be recorded at the divisional level, which means managers may find themselves fighting for the positions of their employees in the larger unit.

Set the Standards

Employers who intend to rank their employees should make the standards and expectations clear. A sales force might be ranked by total dollars sold or by an individual’s performance in relation to his targeted numbers. Others can be ranked based on a client assessment. Many companies rank their employees in multiple areas and then determine their position on the bell curve by aggregating the numbers. This allows employers to tell staff members where they fell short of the mark and develop a plan to improve performance.

Bell Curve Challenges

Applying the bell curve isn’t always easy or even desirable. A company that relies on collaboration and work teams, for example, may not be helped by an evaluation system that pits its workers against each other at performance review time. In these cases, managers must take extra care in implementing the system to ensure it doesn’t foster unhealthy competition or jealousy. Keeping morale high on a team where some are highly rewarded and others viewed negatively, when all have been responsible for the same project, can challenge even the most experienced manager.

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