It’s time to change the old Performance Management System for a number of reasons. 360/270/180 Degree feedback is becoming more popular, companies are doing away with the old practice of normalization or “bell curve force-fitting”, linkage of performance with rewards is more transparent, rating scales are out. Normalized relative ratings are being replaced by assessment of individual impact. A brief comparative chart below informs of the old school and the new school of thought in the domain of Performance Management Systems. The change is here to stay!

The big thing is that now “Bell Curve” is not a nice word. It throws up images of people getting hurt not receiving the rewards due to them, bosses and line managers passing the buck to HR which takes all the flak, and nobody remembers why it was brought in, in the first place.

The Transition

Transitioning out of the Bell Curve is not so easy. The purpose of assessing and rewarding performance still needs to be met. There needs to be a space for individual development too. The ground needs to be prepared….. Are You Ready To Throw Out The Bell Curve? Here are some of the things that need to be in place befor you can consider transitioning into the new school of thought.

Transformation of the Compliance Function

The compliance function is also undergoing significant shifts as it begins to acquire & master tools necessary to understand advanced transactions in the digital realm.

• Measuring Individual Impact

Many organizations are swiftly moving towards measurable outcomes for each job being clearly spelt out. This enables a clear measurement of individual impact and that is the basis for linking performance and rewards. KPIs, KRAs, help managers think SMART and provide clarity to their teams. Individual goals seamlessly cascade down from team and organizational objectives. Usually these are reviewed weekly, monthly or quarterly as an ongoing process. If your organization has been playing hide-andseek with the performance measures and the goal-setting process, it’s the first thing you need to fix.

• Creating Coaching Culture

Feedback sessions and performance review discussions are now transitioning into coaching conversations. These are conversations driven by the employees who set the agenda for discussion in a bottom-up fashion. Bosses need to let go of control and be in a facilitative and coaching frame of mind. It requires an entire Organizational Development effort to train and transition to a coaching culture. It’s possible, and has been done by many organizations, and it is best to start now before it’s too late.

• Debriefing 360 Degree Feedback

Traditional hierarchical and organizational structures have placed power and authority in higher positions in pyramidal formations. The reversing of the power equations in the new generation is complete. Senior managers are no longer assessed and rewarded on the results they bring, but on the 360 Degree Feedback they receive and their Employee Satisfaction scores. For many leaders of the old guard, this new practice calls for a completely re-invented mindset towards people management and transparency towards themselves and others.

• Assessing virtually

The added factor of virtual performance by virtual employees and virtual teams leads to the new frameworks of virtual assessments of performance. This drives a more data-based approach. Leaders may be called upon to assess performance of team members whom they may not have met in person. Keeping objectivity in mind is key here.

• Compensation systems

There are many more initiatives that need to be in place before an organization can move out of the Bell Curve based performance systems. Compensation systems will have to be geared up to be more incentive based as variable pay will be linked with performance achievements. Transparency of pay-performance linkages will be called for by the younger generations. Total reward systems will look at a holistic view of employee compensation and benefits.

It is increasingly important to have some of these things in place before your Performance Management System can be initiated through the transition. This is the foundation that needs to be built for the future. Changing from the old to the new must be done with care to make sure that the change process is successful.