A “bell curve,” as the name suggests, is a bell-shaped graph often used to depict the distribution of performance ratings of employees. The bell curve represents what statisticians call a "normal distribution."
A normal distribution is a sample with an arithmetic average and an equal distribution above and below average. This model assumes we have an 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 (mean). The bell curve force-ranks employees along a distribution that typically looks like this:
High performers (20%)
Average performers (70%)
While the bell curve helps organizations safeguard against “grade inflation,” it is not without limitations. It forces the company to distribute raises and performance ratings by this curve (which essentially assumes that real performance is distributed this way). With 70-80% of the population in the middle as “average performers,” the bell curve impacts not just an organization’s ability to differentiate performance but is also hurtful to meritocracy and employee sentiment.
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