Back in the 1980s, Jack Welch applied ‘Bell Curve’ as a way to force rank the employees at General Electric for their performance measurement and appraisal. The method soon became very famous and widely adopted by all sorts of organizations since then.
Before I continue, I would like to retell an old fable that most of us have enjoyed in our school days.
Once upon a time, there lived a team of cows happily in a green pasture. The predators couldn’t even dare to attack them as they had always fought with unity and made them run for their lives.
There lived a lion too. He had dreamed of eating the cows, but last time he tried were the moments he wouldn’t like to recall.
He was a good learner and smart too. Very wisely, he worked out a plan to cast them into individualism. He told each of them that her color was better than the rest and that while she ate less; she was more beautiful and smarter than the other two.
As you would’ve guessed, the plan worked. Soon they stopped living for one another, but for themselves. A couple of days later, he attacked one of them, but none of the other two cared to rescue her.
Not a surprise, the lion had the feast he had been waiting for a long time!
Let’s have a look at the cows first.
“Agile forces people from different backgrounds to work together on the Agile team.” Says, Bal Mahale in his article “Teamwork in Agile” on the Scrum Alliance community blog, “It is a wonderful thing when developers, product managers, testers and writers build off each other to create something unique and drastically simple.”
And here is our lion.
“The ‘Bell Curve’ or the ‘Gaussian Bell Curve’ is one of the fundamental concepts on which most of the statistical analysis is based.” Says Gaurav Vohra in his post “The Curse of the Bell Curve”, “It helps us simplify things and use rules to understand distributions.”
Jack ingeniously took full advantage of this tool in simplifying the appraisal process that required handling of thousands of factory workers and their managers.
Collaboration is one of the key ingredients of success for any team in general; however, for agile teams, it’s something fundamental to their design and very existence. The effectiveness of the agile team is based on one-for-all-and-all-for-one principle. In theory failure of one individual to meet “the definition of done” is considered to be whole team’s failure. Agile is all about collaboration and teamwork.
The forced ranking process, on the contrary, promotes self-interest and individualism, crushes employees’ morale and goes against the very idea of collaboration. It discourages collaboration at all levels – not just across teams, but unfortunately, within teams as well – a problem that is now becoming a nightmare especially for the technology companies.
The damage it causes is a function of how severely the system matches in rigidity to its Jack Welch days.
In his post “Forced Ranking at Microsoft: When HR Programs Cause Company Woes” David Creelman had mentioned three prevalent conditions at General Electric in the Jack Welch era when he implemented the famous forced ranking system.
- The system had gained very high credibility within General Electric because of its maturity.
- At that time, General Electric needed to scale its size down to drive change while overcoming hurdles impeding the process.
- They needed a system to filter ideal candidates for their leadership development program.
The irony of the situation is that today a good number of the implementations of this system have failed to satisfy all of these conditions in one way or another.
This system was developed amid industrial revolution in the last century for measuring the performance of the factory labor and their supervisors, a thought expressed by Lisa Barry, the global Talent, Performance, and Rewards leader for Deloitte Touche Tohmatsu Limited in a post “It’s Official: Forced Ranking Is Dead” from Deloitte Insights. She also adds that today, we are in the information age where most of the workforce is knowledge-driven and service intensive, the system of forced ranking isn’t fully can’t objectively measuring knowledge sharing, soft-skills, and collaboration – the needs of our age.
The context and the intended use isn’t valid anymore, causing a lot more trouble than the benefits it was designed to provide. Let’s have a look at the drawbacks.
Kurt Eichenwald has quoted a former software developer in his article “Microsoft’s Lost Decade”, “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review.”
An individual may be helping her peers or guiding his junior team members developing their technical skillset or transferring domain knowledge. Thus directly contributing to to achieve their goals that adds to the overall business success, but what happens at the end of the year is that “too many of these real heroic deeds of collaboration are forgotten at rating time as human beings scramble to provide ‘hard’ individually based evidence that impresses the system,” says Mark LeBusque in his post “Bell Curves are Bollocks”. “This in itself sends a message about what is important to an individual to push up to the right end of the curve.”
In most of the cases, it results in fostering a counterproductive environment. We don’t need to go too far. A Microsoft employee has mentioned it like this on Glassdoor, a job site where an employee can rate their companies and share their experiences. “If you are a developer here, you don’t feel like you are competing with the other companies to deliver a better product, instead you are competing with your co-worker. Co-workers will not help each other; instead will backstab each other so that they finish higher in the curve.”
“That is precisely the reason why the ‘Bell Curve’ is such a curse on truly building trusting relationships and promoting real collaboration in an organization.” Mark has referred to this disappointing situation in the same post. “It’s a moment when trust is irreparably damaged and most likely broken. A moment when it becomes all about me,” he adds.
Lately, Microsoft got rid of the system that was continuously pushing them (among other things) to the wall. Tom Warren in his article “Microsoft axes its controversial employee-ranking system” on The Verge has shared an internal memo sent to staff back in November 2013 by Microsoft Human Resources chief Lisa Brummel. The points of primary interest to this discussion are,
- “More emphasis on teamwork and collaboration.”The memo suggests that Microsoft has changed its views about performance evaluation, and in essence it now consists of two main points – the first one focuses on individuals’ self-achievements and the second part looks at how much they build on the skills and support from their peers; while, as the same time measuring how much they are helping others in achieving success, contributing to over the success of the business at Microsoft.
- “No more curve.”That’s the most interesting part. Microsoft has clearly done away with the “Bell Curve” saying that they will not constrain individuals’ performance against “pre-determined targeted distribution.”
Another mistake to avoid is the lack of appreciation for the diversity of the team members as people specializing in a particular area having a unique skill set are usually mixed with the people requiring a different skill set and in completely different roles for their performance measurement.
According to Andy Liakopoulos, Deloitte Consulting LLP’s Talent Strategies leader in a post “It’s Official: Forced Ranking Is Dead” from Deloitte Insights, “Given that technology workers cultivate technical and soft skills over time, performance management systems for them should focus on continuously developing those capabilities, rather than stacking IT professionals against each other or relegating performance discussions to an annual event.”
My two cents
The contributions at the team level, for example, knowledge sharing, building and developing people, and helping co-workers in their success should be an integral part of the appraisal system.
Team’s accomplishment to promote teamwork and collaboration should be given more weight in the system.
And it’s about time that we say goodbye to stacking people with the different skill set and roles against one another and instead of conducting annual or biannual appraisals, we start engaging with the people regularly!
The takeaway here is to reward the behavior we intend to promote!