Performance
Management
By group 4
Jotpreet Singh - PGP/25/333 || Lakshmi Harshitha - PGP/25/338 || Meenakshy R - PGP/25/341
Prajwal Udupa - PGP/25/345 || Sadhika T - PGP/25/352 || Siddharth Yadav - PGP/25/361
What is PERFORMANCE MANAGEMENT?
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It is a corporate management technique that assists managers in
monitoring and evaluating the performance of their staff.
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Managers can utilise performance management tools to tweak
workflow and suggest new strategies.
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Accountability and transparency are key to performance
management, which develops a clear knowledge of expectations.
WHAT IS BELL CURVE METHOD?
● A "normal distribution," as defined by statisticians, is represented by the Bell Curve.
● A normal distribution is a sample with a large average in the middle and an equal
number of above and below average values.
● This model assumes that there will be an equal number of people who perform
above and below average, as well as a very small number of people who perform
very poorly and very well.
● The Bell Curve method of measuring the productivity of employees gained
popularity when Jack Welch, the CEO of GE implemented this within his
organization.
BELL CURVE & PERFORMANCE MANAGEMENT
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Also known as Stacked Ranking, Forced
Ranking and the vitality model and is
described as a “20-70-10” system by GE. It
says:
The “top 20” percent of the workforce is
most productive, and 70% (the “vital 70”)
work adequately. The other 10% (“bottom
10”) are non-producers and should be fired.
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Even though credited with increasing GE
revenues 5 fold, it has been labeled as too
harsh, said to affect employee morale and
has been the subject of a fierce debate.
PROS & CONS :
CONS
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Loss Of Morale
Time Consuming
Deterioration Of Job Performance
Discouragement
Biases
Not Suitable For Small Companies
Team Work Doesn’t Count
Inaccurate And Unfair Assessments
PROS
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Encouragement to Employees
Rewarding Employees for a Job Done
Identifying Under-performers
Staff Development with a Focus
Performance-Driven Discussions
REASONS FOR SHIFTING FROM BELL-CURVE
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One of the major goals of transitioning to a new appraisal mechanism is
to retain talent.
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Increased use of technology and digitization of evaluations
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Employees have also expressed dissatisfaction with single ratings and
constant comparisons to a specific group of performers.
Types of Performance Management Methods
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360 Degree Appraisal Method
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Management By Objectives Method
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Assessment Center Method
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Continous Performance Management Method
IBM
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IBM’s annual appraisal process has been revamped, with annual appraisals being
phased out in favour of a new system called Checkpoint.
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Unlike bell-curve method, which assess performance once a year, this alternate system
considers continuous feedback.
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Under this system, the lender would place a greater emphasis on learning and
development and use it as a tool to assess performance rather than categorizing
employees into top, bottom and average performers.
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Underachievers will have more time to improve their performance if they receive more
frequent feedback, which will encourage them to try to meet targets on a regular basis.
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Personal Business Commitments has replaced the company's traditional performance
evaluation system.
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In the IBM updated system, employees will be evaluated on five criteria:
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Company performance
Client success
Innovation
Personal responsibility to others
Skills
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Managers will be able to assess their employees based on only three criteria:
whether they have exceeded, met, or need to improve on their goals.
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The goal of the new assessment system is to maximise each employee's output and
productivity while also ensuring that they all accomplish their goals throughout the
year.
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Under the new system, the lender would place a greater emphasis on learning and
development and use it as a tool to assess performance.
ADOBE
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Adobe used to conduct annual appraisal process. Once a year, managers would collect
examples of past performance, conduct 360-degree evaluations for each employee,
and draw up a report on each employee’s performance for the year.
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The manager would then assign an overall rating to each employee from four
categories: high performer, strong performer, solid performer or low performer. This
was a ‘stack ranking’ system.
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Doing these rankings properly was in many ways a costly process. It took an estimated
80,000 hours to do everything.
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By the fall of 2012, Adobe had totally redesigned its performance management system
to eliminate the yearly performance review and replace it with a more frequent and less
formal "check-in" process.
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Managers and employees meet atleast once a quarter. The discussion is not
scripted or recorded. Each check in covers 3 topics:
❏ Expectations
❏ Feedback
❏ Growth and development
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Two years after the death of the old annual review, the check-in process is working
brilliantly.
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Adobe has seen a 30% decrease in the number of employees quitting and a 50%
increase in involuntary departures.
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This suggests that a move away from the older system was fruitful for the company.
GE
From stack ranking to continuous feedback
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For decades, General Electric practiced (and proselytized) a rigid system, championed by thenCEO Jack Welch, of ranking employees. Formally known as the "vitality curve" but frequently called
"rank and yank," the system hinged on the annual performance review, and boiled the employees'
performance down to a number on which they were judged and ranked against peers. A bottom
percentage (10 percent in GE's case) of underperformers were then fired
Stack Ranking - stack ranking, also known as forced distribution, is an approach to talent
management where employees are ranked on a bell curve as exemplary, meeting expectations, or
in need of improvement.
Since only a fixed number of employees can be considered high-performing — or exemplary — in
this system, Welch saw stack ranking as a way to galvanize worker productivity and create a more
competitive culture. Because a designation to the bottom 15% meant being slated for layoffs,
employees were motivated to do better than their peers.
Problems with Slack Ranking
It hinders innovation and teamwork.
It leads to high turnover, which can be costly.
Stack ranking creates an individualistic culture and mindset, rather than one geared toward
teamwork and cooperation
From stack ranking to continuous feedback
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The new system
The organization developed a simple, contemporary smartphone app, designed with the sole
purpose of facilitating more frequent communication and meaningful conversations between
managers and employees.
The app, called PD@GE, exchanges voice and text input, attached documents, and even
handwritten notes between employees, managers, and teams across the company. This app
provides a platform for defining near term goals for employees and continuous feedback
Managers are expected to have frequent conversations, named “touchpoints”, with their employees
on how far they are from their goals. The app can provide summaries of these touchpoints when
desired
Benefits of the new system
We’re finding that the new performance-development system is promoting trust between managers
and employees — the foundation of high-performing teams
We’re also learning a new vocabulary, dispensing with sticky labels like “strengths” and
“weaknesses,” which can follow an individual long past the point of applicability, and focusing
instead on behaviors employees may want to “continue” as well as changes they may want to
“consider” making.
The shift from “command and control” to “empower and inspire” is dramatic, and, as evidenced by
our fivefold increase in productivity
RECOMMENDATIONS
(Question: As a group,
recommend which kind
of companies should still
use bell curve method)
Story for illustration purposes only