You have to change the way you look at employee performance

Employee performance does not follow a neat bell curve. Instead, a small number of employees, 10 to 20 percent of employees, at most, make an outsized contribution to your organisation.

You have to change the way you look at employee performance
Photo by LOGAN WEAVER | @LGNWVR / Unsplash
We Need to Let Go of the Bell Curve
Most human activities as well as many disciplines — from physics and biology to linguistics, finance, and computer science — follow a Pareto distribution instead of a “normal” Gaussian curve. In Pareto distributions, a small change in one variable is associated with a large change in another, because it reflects variables multiplied with each other rather than added to each other, as in the normal distribution. This is also referred to as a “power law.” This isn’t an obscure intellectual point, but instead carries serious practical consequences. Because of this error, our approach to most problems is, at best, suboptimal. What does this mean for business leaders? The author presents three practical implications for innovation, risk management, and people.
Harvard Business ReviewAdrian Gore
Ahead of the curve: The future of performance management
What happens after companies jettison traditional year-end evaluations?
McKinsey & CompanyBoris Ewenstein Bryan Hancock Asmus Komm

The article "We Need to Let Go of the Bell Curve" by Adrian Gore discusses how our perception of the world as following a Gaussian, or bell curve, distribution is flawed, and most phenomena actually follow a Pareto distribution, also known as a power law. This has significant implications for leadership and decision-making in areas such as innovation, risk management, and people management.

The author explains that many aspects of life, from economics to social dynamics, follow a Pareto distribution, where a small number of factors or individuals have a disproportionate impact on outcomes. This challenges traditional approaches that assume a Gaussian distribution, where outcomes are evenly spread around an average.

Regarding people management, the article highlights the importance of recruiting and retaining top talent across the organization, as a small number of high-performing individuals often have a significant impact on overall results.

The McKinsey article discusses more shortcomings of traditional performance management systems and explores emerging trends in performance management practices.