These days, many companies are doing away with the Bell Curve system of force fitting employee performance ratings and in some cases, the annual rating itself.

Doing away with the Forced Ranking system seems mostly a good thing. But is it really so bad to have a full year’s performance, or a part of the year’s performance synthesized into scores?

Somehow, when we look around us – we are surrounded by scores.

Scores that synthesize tens, if not hundreds of elements to give us a point of comparing different organizations, people etc.

Right from competitive exams – the questions that get asked in a GMAT or GRE test end up with a score.

A company’s financial performance ends up in a variety of ratios like PE, EPS etc.

Students get ranked in Grades.

Analytics which is in such big demand today synthesizes multiple data points into summary information.

Historically we have looked at various figures – be it sales, revenue, profit, employee headcount, electricity consumed etc in terms of summaries over a month, a quarter or a year. For eg. We do not compare individual sales transactions between the previous year and the current – we compare sales for the same quarter last year with the current, which is a summary of the transactions that happened in that period.

Why is this important?

It is a lot easier to understand and compare when we have summary parameters to look at and the simpler they are the better.

So when we look at employee performance where employees are working across geographies, roles, functions, seniority – how do we compare if we do not have some way of synthesizing that into comparable parameters.

Yes, we could compare the actual parameters themselves such as sales, employee attrition, delivery quality etc. But how difficult and complicated is that going to be!

Organizations need to be careful while changing the rating and ranking system, that the alternatives are carefully thought through. It shouldn’t end up, being a case of throwing the baby out with the bath water?

Not having an objective way to compare performance could lead to an increase in complacency, mediocrity and bias. Also, while a more frequent feedback mechanism is welcome, organizations need to ensure that it doesn’t result in increased efforts in administering, managing and documenting the interactions while at the same time instilling an environment where fairness, engagement and a desire to excel are encouraged.