{"id":73944,"date":"2014-06-17T12:06:17","date_gmt":"2014-06-17T19:06:17","guid":{"rendered":"https:\/\/betterworks.wpengine.com\/?p=416"},"modified":"2022-12-16T09:37:28","modified_gmt":"2022-12-16T17:37:28","slug":"never-grade-on-a-curve","status":"publish","type":"post","link":"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/","title":{"rendered":"Why Your Business Should Never Grade on a Curve for Performance Management"},"content":{"rendered":"<p>Not one person in our company is a \u201clow performer\u201d and certainly no one is a \u201cvery low performer.\u201d In fact, it\u2019s quite the opposite. We have more than one hyper-performer and so does every innovative company that I know.<\/p>\n<p><a href=\"https:\/\/www.mercurynews.com\/60-second-business-break\/ci_25809058\/biz-break-google-passes-apple-worlds-most-valuable\">Google recently surpassed Apple as the world\u2019s most valuable brand<\/a>. Google has never graded on a curve and its focus on making sure every employee sets quarterly <a href=\"https:\/\/www.betterworks.com\/how-google-grew\/\">Objectives-Key Results<\/a> (OKRs) has led to increased transparency, accountability, and a relatively flat organization. Google\u2019s OKR model and original products have been widely recognized. Talking with <a href=\"https:\/\/investing.businessweek.com\/research\/stocks\/people\/person.asp?personId=28869166&amp;ticker=GOOG\">Laszlo Bock<\/a> this month about employee performance gives me confidence that the Bell Curve era is over. Also known as Normal Distribution or Gaussian Distribution, the Bell Curve represents the thinking of prior generations. It\u2019s Jack Welch\u2019s and my father\u2019s (or grandfather\u2019s) way of thinking about performance management.<\/p>\n<p>The <a href=\"https:\/\/en.wikipedia.org\/wiki\/Vitality_curve\">vitality curve<\/a>, as it\u2019s sometimes called, is defined as a leadership construct in which a workforce is graded in accordance with the <em>individual<\/em> productivity of its members. It is also known as forced ranking, forced distribution, rank and yank, quota-based differentiation, and stack ranking.Welch\u2019s model is often referred to as a &#8220;20-70-10&#8221; system. It presupposes that the top 20% of your workforce is the most productive, and that 70% of employees work adequately. These are your vital employees. The other 10% are presumed nonproductive, so according to Welch\u2019s philosophy, these employees should be informed about where they stand and told they need to improve or move on to other work. Welch is quoted as saying, \u201cYou measure your people and you take action on those that don\u2019t measure up.\u201d<\/p>\n<p>While he was at GE (1981-2001), Welch oversaw both a large increase in earnings and revenue, which made executives in other industries take notice. As a result, the vitality curve became popular, and unfortunately, more widely instituted than it should have been. Like the Bell Curve, the vitality model supports certain jobs functions well\u2014factory and retail, for example\u2014but it\u2019s no longer an effective measure for knowledge workers providing services and manipulating bits and bytes. It\u2019s not a modern approach, and it\u2019s not our approach. Laszlo, others, and I agree that knowledge workers are more closely tied to a <a href=\"https:\/\/www.linkedin.com\/today\/post\/article\/20140215200145-131079-the-myth-of-the-bell-curve\">Power Law Distribution<\/a> \u201clong tail\u201d of performance. This is also known as Paretian Distribution.<\/p>\n<p><a href=\"https:\/\/www.betterworks.com\/wp-content\/uploads\/2014\/06\/paretian.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-419 size-full\" src=\"https:\/\/www.betterworks.com\/wp-content\/uploads\/2014\/06\/paretian-dist.png\" alt=\"Paretian Distribution\" width=\"700\" height=\"260\"><\/a><\/p>\n<p>What this means is that people are not normally distributed in a statistical model. Rather research conducted by Ernest O\u2019Boyle Jr. and Herman Aguinis, published in Personnel Psychology in 2012, and outlined in a research briefing by the <a href=\"https:\/\/www.bchrma.org\/wp-content\/uploads\/2012\/11\/rb-the-best-and-the-rest.pdf\">BC HRMA<\/a>, found that typical no longer means average. The implication for your business is that you actually have a small number of employees producing exceptional work. The Power Law curve also suggests that there are large variations between \u201caverage performers.\u201d<\/p>\n<p>This is a good thing: a &#8220;high-potential performer&#8221; can make the jump to \u201chyper-performer.\u201d As Josh Bersin states in his article <a href=\"https:\/\/www.linkedin.com\/today\/post\/article\/20140215200145-131079-the-myth-of-the-bell-curve\"><em>The Myth of the Bell Curve<\/em><\/a>, \u201cWe don\u2019t limit people at the top of the curve\u2014we try to build more of them.\u201d Unfortunately, you\u2019re probably still using technologies and strategies, based on the antiquated curve, that mask the true performance of your superstars. Or, you aren\u2019t pushing mid-level performers to improve, and move up the curve to join them. Either way, you\u2019re hurting employee engagement, which affects performance. To unleash the full potential of all of your employees\u2014high-performers and mid-performers alike \u2014you need to reevaluate how you measure, manage and assess them.<\/p>\n<p>You need to look at <a href=\"https:\/\/www.betterworks.com\">how goals are set and tracked<\/a>, and then evaluate outcomes to understand the impact of performance. You\u2019ll want to know: How did employees perform? How did they get work done (i.e., did they work alone or as a team player)? And how accurate are the employees that are providing the performance assessments and feedback?Only when you begin to think differently\u2014and beyond the curve\u2014about how you evaluate your employees, can you truly recognize their real value.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Grading on a curve hurts employee engagement, which affects performance.<\/p>\n","protected":false},"author":45,"featured_media":76961,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","inline_featured_image":false,"footnotes":""},"categories":[3307],"tags":[],"featured_location":[],"industry":[],"class_list":["post-73944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-performance-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v18.1 (Yoast SEO v23.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Performance Management Curve: Beyond the GE Vitality Model<\/title>\n<meta name=\"description\" content=\"The GE Vitality Curve grades a workforce in accordance with individual productivity. 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Learn why performance management should not rely on forced ranking.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/\" \/>\n<meta property=\"og:site_name\" content=\"Betterworks\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/BetterWorks\/\" \/>\n<meta property=\"article:published_time\" content=\"2014-06-17T19:06:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-16T17:37:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.betterworks.com\/wp-content\/uploads\/2014\/06\/Why-Your-Business-Should-Never-Grade-on-a-Curve-for-Performance-Management.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1320\" \/>\n\t<meta property=\"og:image:height\" content=\"1320\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Betterworks\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Betterworks\" \/>\n<meta name=\"twitter:site\" content=\"@Betterworks\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/\"},\"author\":{\"name\":\"Betterworks\",\"@id\":\"https:\/\/www.betterworks.com\/#\/schema\/person\/832a837b6587250dcb55ebd67fb92947\"},\"headline\":\"Why Your Business Should Never Grade on a Curve for Performance Management\",\"datePublished\":\"2014-06-17T19:06:17+00:00\",\"dateModified\":\"2022-12-16T17:37:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/\"},\"wordCount\":693,\"commentCount\":2,\"publisher\":{\"@id\":\"https:\/\/www.betterworks.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.betterworks.com\/wp-content\/uploads\/2014\/06\/Why-Your-Business-Should-Never-Grade-on-a-Curve-for-Performance-Management.jpg\",\"articleSection\":[\"Performance Management\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/\",\"url\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/\",\"name\":\"Performance Management Curve: Beyond the GE Vitality Model\",\"isPartOf\":{\"@id\":\"https:\/\/www.betterworks.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.betterworks.com\/magazine\/never-grade-on-a-curve\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.betterworks.com\/wp-content\/uploads\/2014\/06\/Why-Your-Business-Should-Never-Grade-on-a-Curve-for-Performance-Management.jpg\",\"datePublished\":\"2014-06-17T19:06:17+00:00\",\"dateModified\":\"2022-12-16T17:37:28+00:00\",\"description\":\"The GE Vitality Curve grades a workforce in accordance with individual productivity. 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