Required performance distribution curve: a problem

April 19, 2014 (San Diego)

            Required or forced distribution of performance for the purpose of bonus and promotion can be a real problem particularly if you are encouraging your employees towards totally engaged optimal performance. The problem: suppose you succeed but standard distributionstill have a forced distribution curve in place?

An example: suppose the general rule of thumb is that only 10% of your employees can be rated at the top and get the highest bonus.  As long as manager do not do much that might just work as my observations over 29 years of consulting is that about 12 – 15% of the employees will move into a “peak performing” zone all on their own. Now your company engages on a leadership program to begin systematic development of staff and it is really successful. An easy outcome would be up to 50% of the employees are now in the “peak performance” zone. What happens to bonus distribution based on the forced distribution curve?

  1. You could reset the curve so that what was considered “peak performance” is now the “new normal”.  One can only imagine the impact on employee engagement when no matter how well they perform, no matter how much extra they earn for the company it is now the new normal and not considered outstanding.
  2. Perhaps a better way of handling the situation is to do away with the curve altogether           and replace the curve with milestones that reflect the market place potential for your company. The metrics of this are totally connected to your company and its thanksgiving 2ability to perform in the market place. A book that totally shows how this works is “The Goal” by Eli Goldratt.

How does your company reward all its best performers or just the best of the best?

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