Bringing the ‘Human’ back in Human Resources

Rethinking Performance Appraisals Beyond the Bell Curve

Performance appraisals have come a long way since their industrial-era origins. What started as a rigid, one-size-fits-all process is evolving into something far more human-centric. Today, the leaders in HR are redefining performance reviews as a means of fostering growth, individuality, development, and having meaningful connections within our organizations.

One of the widely used methods that was conceived in the industrial era by GE is the Bell Curve method. This system tries to fit everyone into predefined categories of Top, Average and Non-Performers, primarily based on how many boxes are ticked from a pre-defined standardised criterion. It segregates employees into a bell-shaped graph or a normalised distribution. 

The general cadence of categorization of employees for performance appraisal through a bell curve is:

Top performers: 20% of employees

Average performers: 70% of employees

Low performers: 10% of employees

Regardless of the fact of how many top – average – non-performers there really are in the company that year!

The Problem with the Bell Curve

The original goal of Bell Curve categorization was to systematically weed out underperformance and increase talent density year after year. While this sounds great in theory, the reality is quite different. It often pits employees against each other, forcing them to "prove" their worth to leadership, since the quotas for each performance category are limited. This approach can lead to more backstabbing, credit-grabbing, and trumpet-blowing, rather than fostering deep collaboration, creativity, and teamwork.

The Bell Curve system essentially creates a zero-sum game, where one employee’s success comes at the expense of another. It fosters a highly competitive environment, prioritizing “I and me” over “we and us,” which can stifle collaboration and teamwork.

What the Bell Curve system often ends up doing is maximizing the success of mediocre performers and those who have learned to "game" the system by focusing on a few key metrics, rather than driving overall growth. Real creativity and innovation—which often require taking risks and come with the possibility of failure—get pushed to the back seat. Instead, those who play it safe or know how to manipulate the rating system start to come out on top. In the end, this discourages bold ideas and reinforces a culture of playing small, where short-term wins are prioritized over meaningful, long-term impact.

The Fallout for High Performers

In a Bell Curve system, managers often find themselves battling over arbitrary cut-off thresholds. For example, only 20% of your team can be labelled as top performers—even if you know more of them deserve that recognition. This creates a frustrating situation where your best people are unfairly categorized, and over time, it wears them down. No surprise that these top performers—who thrive on recognition—end up feeling undervalued and eventually leave. It’s a classic case of “system failure,” where we lose talent simply because we’re forcing them into boxes, they don’t belong in.

A striking example of this failure was seen at Microsoft in the early 2010s. Their use of the Bell Curve for performance reviews led to a culture where employees were more focused on competing with one another than working together to drive innovation. It stifled creativity, open communication, and collaboration. Thankfully, Microsoft recognized the issue and abandoned the Bell Curve in 2013, shifting toward a more individualized, development-focused approach.

A Better Way Forward

There are far better alternatives to the Bell Curve. Instead of annual reviews, how about more frequent, informal check-ins? 

Regular feedback and coaching allow for real-time course corrections and keep employees motivated. These conversations can focus on forward-looking growth and development, rather than a backward-looking review of performance.

It also includes shifting our focus from process-oriented metrics to impact-based evaluation. Finding ways of capturing a more holistic view of performance, diverse perspectives and insights through 360-degree feedback, 1:1s and a culture of candor that paints a real and honest picture about the impact an individual is able to create.

By identifying and nurturing individual strengths, organizations can maximize employee engagement, satisfaction, and ultimately, performance. (Yes, engagement does lead to better performance!)

The Human Touch in Human Resources

At the heart of every performance review should be the desire to support and empower the team. Creating a safe and open space for employees to discuss their performance, hits and misses openly and honestly, can go a long way in fostering a culture of trust. This means actively listening to feedback, concerns, goals, and working together to find solutions that benefit both the individual and the organization.

As humans, we all have an innate drive to do our best work. When we know where we stand, we can amplify our strengths and course-correct where needed. To bring about this collective success, a cadence of regular conversations around this aligning and re-aligning rather than a big bang approach around performance every few months is more important. Weekly 1:1s, quarterly goal-setting, and regular self-evaluations are practices that have been working well for us at Incubyte.

By embracing a more human-centered approach, we can move away from outdated systems like the Bell Curve and create workplaces where everyone has the opportunity to thrive. Here's to putting the ‘human’ back in Human Resources—one performance review at a time. 😊