Bell-Curve & Relative Ranking  

Performance Management System

Peformance Management System is a 360 degree process to enable an organization drive its performance & execution. It includes the three pillars of performance (Goals-What?, Leadership- How?, Learning & Development).


Bell-Curve & Relative Ranking


Bell Curve and relative ranking refer to the process of normalization which is applied to the pool of final ratings as awarded by the appraisers (including level 2 managers). This is done to eliminate the skew which inevitably arises in this collation of all rank values due to the human bias.

Bell Curve and Relative Ranking refer to the Normalization process carried out towards the end of the Performance Management System process. Essentially the entire pool of finalized ratings is streamlined as a Bell Curve graph. The bell shaped curve represents a normal distribution and all the ratings are adjusted to fit into this. Statistically, a large set of numbers, however random they may be, will usually tend to be distributed in this ‘normal’ fashion which when depicted graphically will result in a bell-shaped curve (1? covers approx. 68% of values). And this always happens when the values have been captured from the natural domain. Ideally, the rankings received from the Performance Management System should also be distributed normally. But due to the human bias, whether by the appraisee or the appraiser, the rankings tend to be skewed; more so towards the upper side. The reason this happens has got to do with the human side of things in this process (discussed separately). But given the fact that almost always, the entire pool of rankings is skewed, normalization of the rankings becomes an essential process. After normalization, the rankings show as a normal bell-curve graph. Of course, few employees find their ratings enhanced in the process and for some of them, it stays the same. But for the majority, it results in downgrading of the overall rating by some factor.