The Bell Curve or Why the Shit Stick Doesn't Work

In the old days, raises and bonuses were an entitlement and unlinked to how a person actually did in the job. Left-leaning though I am, I see the inherent problem in such a system. It's not simply that people will not be motivated to excel if they won't be financially rewarded for it, it's also that to do well, I believe, people need to feel that their work is being noticed and their development facilitated.

Sadly, the heyday of simple performance-related pay seems to have been short-lived and there's a new game in town, the mandatory performance rating curve or, as I like to call it, the shit stick. In a move I assume to cut costs, company leaders have decided that the performance of employees will fall into certain percentages. Imagine a rating scale goes from 0 to 5, 5 being the unattainable 'outstanding' that no one ever gets, 0 being the lowest rating that not even the worst slacker could aspire to, and 3 being the 'meets expectations' rating. Now imagine a mandate that, say, 12% of employees must receive a 2 or below, 42% must receive a 3 and 45% must receive 4 or 5.

A happier-go-luckier soul than myself might choose to focus on the 45% that gets an 'exceeds expectations' rating. I find myself instead fixated on the 12% and musing on the needless tragedy of it.

My fiance ranks companies on two main axes: evilness and stupidness. He theorises that if a company does evil that is 'smart' (good for the company), one may not agree but one can intellectually understand the decision. If the company does 'stupid' with a good heart, then one can rail against it but have pity nonetheless. However, if the company does evil and stupid simultaneously, there is no respect possible. The shit stick is a shining example of evil and stupid.

Let's say that the two-fold motive of the ratings curve is to cut costs and to encourage strong performance. The ratings curve fails on both counts (though please keep in mind that I'm not an economist so my number-crunching isn't too sophisticated). I'll start with the latter.

Mandatory rating ranges will encourage strong performance. Hmm. Now, call me crazy, but this seems like a step back in time to the bad old days when pay was not linked to performance at all. Why? Because employees aren't stupid and they realise that only so many people can get a good rating. Instead of feeling like they need to work harder so they don't get the shit stick, they start to feel that the shit stick is arbitrary and nothing they do will ensure that the baton is not passed to them. Employees feel powerless and fearful. This does not tend to bring out their best. Additionally, let's say an employee is given a bad rating. What kind of accountability is really likely? Isn't it much more likely that the employee will say, 'Well, I know they have to give some bad ratings; that's the reason I got one'? This is without even considering the terrible effect on morale in a 'shit stick' world. Employees begin to look at their fellow colleagues, sizing them up, hoping that another team member will be the chosen this go around. To top it all off, an employee who gets the shit stick is ineligible for transfer, so they are trapped in their situation until the baton goes to another.

Let us ponder a moment, as well, the choice of who will get the shit stick in a given review cycle. It would be delightful to think that all the lazy lay-abouts and troublemakers would be given bad reviews. In practice, though, isn't it much more likely that the nice people will be chosen, as they are the least likely to go to HR and stir up a fuss? Or, even worse, isn't there a real risk that a person who does good work will be chosen to protect an under-performing colleague who needs the job more?

Where does this leave us? In a situation where the nice people are given the shaft, the bad employee scrape by and the really good employees, disgusted by the injustice of what they see around them get the hell out. Sounds like the perfect recipe for a 'high performance team'!

A mandatory ratings curve will cut costs. Would this were so! You would think that this scheme would lead to employees getting the boot, wouldn't you? It's a brilliant plan for a passive-aggressive layoff. Attrition rates soar and the ranks get leaner, meaner and more productive. In practice, this isn't the case. Yes, you save money on giving out bonuses and merit raises that you might otherwise be 'forced' to give out if soft-hearted managers were given their way. But the fact is, these 'low performers' are not being shown the door. Why? Because you need them around to fill your quota of low ratings. If you get rid of your whipping-boys, you might be required to give the shit stick to the ones who will go to HR or who really do perform too well for you to get away with it. So instead of giving the low-rated employees a dignified exit, you keep them on the payroll for as long as possible. Surely it would be cheaper just to lay them off in the first place--besides, that would make your stock go up (nauseating as that is to some).

And not only this, but you are opening yourself up to a massive lawsuit. These days the focus is on measurable performance goals. Gone are the times of touchy-feely subjectivity. This laudable focus on objective goals aims to level the playing field across different parts of an organisation to ensure fairness to the employee. Brilliant! But think about it in relation to the mandatory ratings distribution. You and your employees write up the goals that are specific and measurable. When your employees meet all of the criteria and they have the evidence to prove it (after all, the goals are measurable), how can you get away with giving them a bad review? Furthermore, many companies rightly have a midyear review that lets the employee know how they are doing in relation to their goals. This ensures that no one is surprised at the end of the year and that employees have the opportunity to change their wicked ways before it's too late. And yet managers the company over are praying that their badly-rated employees do not take the hint and do better, for if they were to improve and no one else worsened, how on earth are managers going to make their shit stick quotas?

So what's my point here? Well, to the company leaders that use this practice (and there are many of you, I am depressed to state), I ask you to think long and hard about how this mandatory distribution curve is really playing out in your company. Ask your managers and employees how they feel about it and what alternatives they could recommend that would achieve the same goals of cost-cutting and higher performance. They would undoubtedly surprise you with their creativity and their willingness to make some sacrifices for the good of the whole. To employees and managers, I say if you are asked for honest feedback, please give it. I know that jobs could be on the line and I admit that I have not always spoken in situations where I could have. Not everyone is able to make a grand gesture. But the more I think about it, the more convinced I am that this is ethically and morally wrong and that I cannot stand by in silence. This topic needs to be discussed openly and often in various settings so that it becomes an issue to be analysed, dissected and questioned rather than just accepted as a solid business practice in an uncertain world. The excuse that 'other companies are doing it' is simply not good enough, particularly for those companies that build a brand image on their ethics.

Finally, I encourage all of us to live less out of scarcity and more out of abundance. You may ask what that has to do with performance ratings: what I mean is that if we remain silent out of fear that we will lose our jobs and never get a new one, then we tacitly accept the status quo. To live out of abundance means to risk when it comes from our core and to trust that we will find a way. Living with an attitude of abundance means not assuming that we're trapped, but looking for a completely different way of approaching a situation that will reveal undiscovered escape routes. It means an unwillingness to look at our co-workers (and others) as competitors and a readiness to act against injustice toward anyone instead of merely to feel furtive relief if someone else gets the shit stick this year. If anyone is hurt by this system, we are all hurt by it.

Goodness knows that I fail repeatedly to live out of abundance, but that's one of the big reasons I am so passionate about discussing it. I also know that I come from a position of privilege, but I've learned not to be ashamed of that. Instead I try to use it for good, good that is roomy enough to include everyone.