Muse HR: What is a Bell Curve in Performance Management?
A bell-curve system of performance appraisal is a forced ranking system to be used on employees by the management.
The system assumes that employees in a company can be divided into groups. A typical industry practice derives the curve in the following 5 forced ranking: Rating 1 (Non Performers) : 3-5% Rating 2 (Below Performers) : 5-10% Rating 3 (Average or Meet Performers) : 60-80% Rating 4 (Above Average Performers) : 10-20% Rating 5 (Outstanding Performers) : 5-8%
A bell-curve performance rating acts as a guide to Management in rating their staff and to ensure there is no butter spread of budget and bonus distribution.
However, the bell-curve review must not be a strict rule. As we may not necessarily have a perfect bell curve at all times. HR and Management should be able to really know who their performers and non performers are and ensure ratings are done accordingly.