The Myth of the Bell Curve: Look for the Hyper-Performers

Seems like in 1994 the concept of the bell curve brought up a couple of intriguing questions and debates related to the overall employees’ performance worldwide.

The outburst of this concept was believed to have greatly improved the work proficiency, however, most of the experts nowadays regard the bell curve as a false and futile productivity appraisal.

When addressing the bell curve phenomenon in terms of employees’ productivity, it’s somewhat unfair to take into consideration only the results achieved on a group level. Instead, it would be for the best to focus on the contribution of each member of the team individually (at least for the ones who would expect improvement).

The previous perspective turned around the concept that not everybody from the team can pick up laurels, as it was all about normal distribution.

Yet, how normal that actually was? The normal distribution is the limiting case, and nothing more.

HR practitioners upheld the assumption that only a few people in the team could be superstars, but what happens with the teams that are already down to only a few people?

How are they rated?

Well, it seems everyone but one person, (a high performer/hyper-performer) are doomed to mediocrity.

There are numerous flaws and limitations to the bell curve, so let’s clarify why a power-law distribution should be the future of employee performance appraisal instead of the bell curve myth.

CHARACTERISTIC OF THE BELL CURVE

The bell curve refers to the concept of the normal distribution and, when it comes to graphs, it creates a certain shape according to the data points meeting the criteria, even though the center is actually the only value meeting the value at the highest point on the arc.

The typical shape of the bell curve decreases on both sides but is concentrated in the center.

Simply said – both decreased sides have very little tendency to meet extreme values the way the center does. The bell curve contains two types of deviations:

• Standard,
• Mean.

When a bell is wide and short, it expresses a large standard deviation, while creating a narrow and tall curve indicates mean deviations.

Yet, the thing is – no matter of the deviation, the bell curve model assumes that no matter the curve, there will always be the same number of people who are below and above average and there will always be the same number of people performing at a low and the highest level (even though there will only be a few of them in each category).

AVOIDING GRADE INFLATION – OUTCOMES

It is already obvious why the bell curve fails at one moment.

The curve in the above-mentioned case results in “rank and yank” outcomes sooner or later.

The thing is – the company will follow the curve when distributing performance ratings and raises (as this concurs with the normal distribution).

Managers are the ones who allocate the number of people expressed in percents who perform at the bottom (a few of them), the bulk of average performers, and a few percents of people who are at the top.

Outcomes of such distribution are:

• Rationalizing the percentage of the high performers, their number shouldn’t exceed 20% of the overall number of team members. However, out of this 20 %, only 10% will be rated as the hyper-performers.
• Managers are forced to create a group of “losers”, as, according to the bell curve, some people just have to be at the bottom. The main idea here is to identify the ones who are at the bottom (10% of team members) and cut them away. In other cases, these people would eventually quit themselves because of the lack of motivation and low rewards.
• The conclusion is imposing itself – the outcome of the bell curve and normal distribution is forcing the ones who are in the first group of hyper-performers to do even better than they are already doing because if it were otherwise, they would be looped away. Yet, the percent of the average performers will always stay constant, as the most of ratings and raises are distributed at the middle of the curve.

Source: empxtrack.com

THE POWER-LAW DISTRIBUTION

The power-law distribution is the antagonist to the “normal” distribution.

Even though it also claims -there is a small number of hyper high and low performers, it still says the second group takes a smaller part.

Further, focusing on the “middle”, the power-law distribution takes into account a broad range of good performers, instead of average ones.

In comparison to the bell curve, which asserts most people are slightly above the mean, a small percentage of people turns around the average, while most of the performers are far above this level. Put differently, the bell curve makes the concept of average performer absurd.

Now it is easy to jump to a conclusion that there is no point in comparing anything to average, especially not performance, as the ones who are hyper-performers can handle a wide range of business by themselves.

Source: forbes.com

PROFILE OF A HYPER PERFORMER

Let’s go back to the beginning now. Just as mentioned, only a few people in each group can wear the title of a superhero/superstar.

Any well-developing business (services, real estate, medical) has its own superstars.

Perceiving hyper-performers is so easy, as these people handle the bulk of work and are highly productive.

They can contribute up to ten times more in comparison to an average performer. Companies give their best to motivate, empower, and attract such people.

A hyper-performer will run their own business at some point. This person will develop a new product, start a company, write their own book, etc.

However, the main catch with a hyper-performer is the fact he/she is passionate, full of energy, talented, creative, and goal-driven. Hyper-performers have the thirst for bringing significantly more value than the others.

That is why companies, when having someone like this in their base, do anything to keep them by their side.

They get incredible salaries, more freedom, and independence, more respect and all of this because they know how to do business which big-league companies always know how to reward.

Yet, there is more. A hyper-performer knows how to keep the business running. Not only he/she has the ability to sell and promote the product.

The hyper-performer also has a tendency to further develop the product and/or the brand.

It is so easy to spot a difference between a successful project and a less successful one when working with hyper-performers.

What is more, the room for hyper-performers is vast, as anyone can contribute to a high value when being rewarded exponentially.

This is so much better option than just spreading their budget to the extent of an average performer.

In comparison to the bell curve, where companies have a certain percentage of people allowed to be rated as hyper-performers, the power-law distribution has no limitations.

The bell curve model closes the circle at some point so what comes next?

People who are dropped out of “the privileged category” lose motivation as they receive lower rewards, which will be later explained in more detail.

WHAT ABOUT THE REST?

Just as mentioned above, there are people who provide high performance continually.

Yet, high performance comes through different levels. In that aspect, performance can be displayed through gradual descent – going from the hyper-performers, near hyper-performers, average performers, and low performers at the end.

Well, the thing here is in that group of near hyper-performers.

Even though the chart of descent will vary depending on the population, the power-law distribution claims there will still be, either way, a large group of potential hyper-performers in the team.

On the other hand, some performers will simply go round in circles, as they will have a rough time fitting in the environment.

In that context, the power of law suggests entrepreneurs to give everyone the chance to become a hyper-performer.

Even though some performers won’t find the right role in such an environment, the environment itself shouldn’t be limiting.

On the contrary, trying to build more hyper-performers will actually make more of them.

Companies that encourage empowerment understand how important it is to provide the chance to everyone to develop themselves through coaching and collaboration.

After all, there is nothing wrong with wanting all performers to become hyper-performers, even though it is impossible to work with the top-notch ones only.

The very idea of supporting and empowering the ones who are near the bottom of the list to perform better will have a positive impact on the overall performance of the company.

Bell curve classifies employees as high performers, average, and low ones. It assumes high performers will appreciate paid holidays, bonuses, etc., as rewards for their work, which will make them work even better.

Yet, looking for the average performer’s perspective, this would have a negative effect on their efficiency.

Instead of aspiring for them to be a part of the higher category, they would start thinking their effort has no value within the company.

Even though the bell curve has the goal to ensure and increase overall productivity, it usually creates completely opposite outcomes.

As people who are not hyper-performers would eventually leave their jobs, companies would hire new ones.

Yet, even these new ones will come to a point of where they can’t see personal growth within the company.

Why this matters from the perspective of companies? Hiring new employees all the time creates a bad reputation, as highly reputable companies have teams of long-term employees.

Additionally, they would have to spend more money on training courses and more time on guiding new employees into the business, which only lowers the overall performance of the company.

Going further, loads of work would have to be assigned to experienced employees. However, if companies don’t provide proportional rewards and bonuses for handling more work than usual, discontent among those performers will arise.

Insisting on the forced ranking system in accordance with the bell curve model used to be reliable when presented decades ago, while contemporary data show this is a rigid approach.

In other words – it is old fashioned and outdated.

BELL CURVE IS NOT A RELIABLE MEASUREMENT FOR EMPLOYEE PERFORMANCE

It is clear now, the bell curve results in frustrating performance appraisals, which demotivates employees to do better or to even try to do so.

Where is the exact problem with the bell curve model and employee performance?

For an employee who works in a certain company for years, the very thought of being rated on a scale seems degrading. This applies on a subconscious level, resulting in reduced encouragement to improve at all.

If a company doesn’t provide room for continuous improvement, performance will go down bit by bit. When an employee receives a certain, average to low rating, that creates a subconscious threat in their brain.

The bell curve starts from the idea low ratings would motivate low performers to do better, while the power-law distribution has the goal to prevent employees from being defensive by avoiding performance appraisals due to the fact these reduce performance.

Another reason why the bell curve is not a reliable measurement for employee performance hides behind the claim that only a few people can be rated as hyper-performers.

The limiting capacity of the bell curve is what makes ultra-high performers leave once they realize the most of money goes to the ones rated as average.

However, even though some performers are doing their best to achieve the hyper-performer status, they still can get a low rating – 2 or 3.

Once a high performer realizes they are as under-appreciated as well, they would eventually leave.

The bell curve supports low compensation increase despite the fact a performer is doing exceptionally well because of the fact that hyper-performers are already at the top of the list and there is no space for anyone else.

Yet, the limiting aspect of the bell curve doesn’t end here. Employees rated with the number “1” will realize they can’t make any improvement within the company, no matter of their efforts.

The breaking point will occur sooner or later, and they will try to try their luck in another company which seems to give more room for further development.

The bell curve, opposes the power-law distribution, as it doesn’t encourage collaboration.

Collaboration in such an environment is not recommendable, as team members are in the constant state of competition.

It is not in their self-interest to help anybody from the team, as they would be endangering themselves and their position in the company.

On the other hand, the power-law distribution eliminates competition, as it supposes everyone can be a hyper-performer.

Helping others won’t throw off a hyper-performer from their position, but will allow teammates to ascend to the same level.

It is obvious the bell curve affects most of the performers at a frustrating level. Mid-level performers (rated with 2, 3, and 4) see there is no chance for them to make progress to a stage of hyper-performer, while some of them will be more than happy with their mid-level performance.

Keeping the status quo is definitely the least motivating aspect of the bell curve model. No matter the performance, employees rated with 1, 2, 3, and 4 will highly likely stay on the same position either because they see no room for improvement or because they realize the bell curve appreciates mediocrity.

Defenders of the bell curve claim this is a fair model.

However, just because the bell curve allocates the same number of performers below and above the average, that doesn’t equal fairness.

Another failure of this model when it comes to average performers and fair working environment lays in the claim the bell curve can be fair within organizations with a handful of people, which is definitely not true.

In this case, only one or two employees would be rated as high performers, while the rest would realize the dead-end of such fairness.

Small teams know this struggle best.

Being rated a high performer in a small team creates a tense atmosphere between the high performer and those who are average performers, which may even hinder growth within the organization.

On the other hand, having a large corporation with a hundred employees definitely wouldn’t benefit from the bell curve either.

It is indeed true some people will dig with hands and feet to gain as more value as possible, which is totally okay. Yet, what is not okay is not giving everyone an opportunity to achieve that value.

The power-law distribution advocates a true meritocracy, as all of the information is transparent, there are numerous chances for development, and company management gives feedback to their employees.

Speaking of values, companies are slowly realizing they should create a system that offers higher variability in rewards.

PERFORMANCE PHILOSOPHY

One more thing companies should have in mind when applying a certain model to their business is performance philosophy.

Top three things they want to achieve are:

• Providing feedback,
• Making things simpler,
• Creating an environment with the development potential.

Yet, forgetting about performance philosophy can cost companies a lot.

Performance management directly affects performance appraisal, and this is something companies should always have in mind.

Even though this is a bit tricky for the managers, such system contributes a lot to people working in organizations.

Does the bell curve truly improve things within the company? Does not giving a chance to those who are working a lot, yet not gaining any rewards, motivate them to do better?

Simplifying tasks won’t always lead to better management if companies don’t level up rewards and rating for hyper-performers, as well as the ones who are showing improvement.

Is it possible to experience the results companies want while keeping the same patterns when it comes to the distribution of rewards and ratings?

Companies should look up for the hyper-performers and award them vastly. This way, they will create an environment that drives results. Having more super-stars in the team will only affect the business positively.

Implementing performance management that allows and empowers as many people from the team as possible to express their skills and rewards them accordingly will bring amazing results.

So, how should companies behave with low performers according to such a system? Instead of telling a bunch of people they are terrible, which the bell curve model does, companies applying the power-law distribution would support them in a way to give them more space, time, and tools to improve, which they indeed will.

Sometimes companies can bring everybody from the team together and give low performers the chance to learn from hyper-performers, instead of just pointing out that they are not good enough (which happens all the time with the bell curve system).

CONCLUSION

In a bell curve model, stimulation for growth and development is reduced to a bare minimum.

The fact that 80% of the population stays in the middle is not motivating at all.

How to ever become a hyper performer when there is only 10% of hyper-performers allowed in the system?

We, people, are not meant to perform on an average level. Instead, we should strive to be great or the best at what we do.

In comparison to the bell curve, the power-law distribution provides what is exactly needed – a system that encourages every single performer to became a superstar.

Any existing company nowadays focuses on either services, product design, consulting, creative work, or all of them.

In this case, encouraging employees to improve their workday after day will result in better outcomes on all levels of the company.

The bell curve model is a myth when compared to the power-law distribution model where managers assign tasks or jobs to employees according to their skills and expertise so they can give the best of themselves.

Rating employees from 1 to 5 won’t actually give almost anyone the opportunity to get to a position in which they would prove their worth.

The power-law distribution provides improvement and ascending to higher positions as the system is flexible and more variable, which indeed is not the case with the bell curve model.

More and more companies nowadays are realizing the failure of the bell curve and transiting to the power-law distribution due to its efficiency and major company gains which again proves that the bell curve model is merely a myth. A dangerous one at best.