Tag Archives: Microsoft

Bell Curve is a waste when grading performers

There is a long standing belief in business that people performance follows the Bell Curve.This belief drives several business practices like performance appraisals, compensation models etc.  There is just one problem — It does not accurately reflect the way people perform.

Does human performance follow the bell curve? Research says no.

Bell Curve follows Normal Distribution. A normal distribution is a sample with an arithmetic average and an equal distribution above and below average. So the assumption is there are equivalent number of people above and below average, and that there will be a very small number of people two standard deviations above and below the average (statistically speaking mean).

Now in corporate world in order to distribute raises and performance ratings by this curve and avoid “Grade Inflation” companies forces a small percentage of High Performers, a similar percentage of low and a huge number in  “Average Performers”.

In general there should be 10% of high as well as low performers are rest 80% goes to Average. But the world does not work this way. A research conducted by Ernest O’Boyle Jr. and Herman Aguinis in 2011 & 2012.

http://www.bchrma.org/wp-content/uploads/2012/11/rb-the-best-and-the-rest.pdf

The research says that 94% of the subject groups formed did not adhere to Bell Curve. Instead they followed a POWER LAW, distribution also known as Long Tail.  This law describes aptly what is happening in industry at present. Very small number of people called High Performer, Large number of people called Good/As-per-expectation performer and a still good number of Low performer. So the concept of average becomes meaningless here.

Why it is a waste to rate performance on so called Bell Curve?

Firstly, I don’t want to be rated on a scale of 5, it hinders my improvement. Speaking specifically for the people who get the average rating, the generally get happy with status quo and realize that the number of high performer is reserved. So they never strive to improve.

Secondly, If you’re performing well but you don’t score the highest rating you’ll probably feel under-appreciated and hence you’ll probably conclude that the highest ratings are reserved for those who are politically well connected. And this encourages people to leave their organization.

Thirdly, People often believe the bell curve is “fair.” There are an equal number of people above and below the average. And fairness is very important. But fairness does not mean “equality” or “equivalent rewards for all.” High performing companies have very wide variations in compensation, reflecting the fact that some people really do drive far more value than others.

So the time has come for organizations to re-engineer their Performance Model.   Microsoft took a step in the same direction because they realized with current model they were only encouraging their top performers to leave.
http://management.fortune.cnn.com/2013/11/18/microsoft-ge-ranking-employees/

Yet another excuse for failure: label IITs and IIMs System of Exclusion?

Satya Nadela becomes CEO of Microsoft and all Indians lose their minds. I do not understand why all of a sudden people have started finding mistakes in IIT and IIM. Why people have started calling them Filtering Systems instead of producers of Intellectual capital. What is their fault in it?

I understand that people getting to high positions in several organizations are Indians and many of them might not even be from IITs or IIMs but why start calling them filtering system all of a sudden? They still are most prestigious colleges of India without any doubt where any student dream to land on. People prepared/prepare so hard to get there.

Those who qualify are generally of very high caliber and they achieve in life. I am not saying others do not. But look at the lists of startups coming out of these colleges and others. And the startups formed provide jobs to 100s further not just to a CEO. Best example is of Naukri.com by Infoedge(IIM).

http://timesofindia.indiatimes.com/business/india-business/IITians-in-top-10-list-of-US-startup-founders/articleshow/27202810.cms

Startups by IITians

I am very happy about Mr. Nadela to reach position of pioneer ofSoftware company. That is his achievement. Also the India is not at all responsible for he becoming the CEO, rather he is there because he left India and the orthodox thinking we have here. Instead of saying that he achieve we have already started talking shit about most prestigious colleges of India. We are so busy finding fault that we never get to focus on success and growth.

I am fed up of the way people think and they start blurting out any shit which comes to their head. You could not get in IITs/IIMs, you never tried to work for your passion, never dared to take a risk, never even thought of going to US/UK to study further, yet when it comes to finding excuses for you failure you start calling IITs/IIMs a fitering criteria.

 

These people when go outside their mind opens, their fear of risks mitigates. Their grow a pair of balls again for taking risk and this only lead to their success.

But the guys from these great colleges already know what they are capable of, so they are not afraid of trying new stuff and hence they succeed.

And lemme say something very bluntly you are going to fail to have a great career, if you do not give up your fears. You can’t live in fear and keep avoiding risks, yet expect to be filthy rich. Go out!! Explore!!