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ANZ abandons bell curve rankings

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HC Online | 09 May 2013, 12:00 AM Agree 0
National bank ANZ has axed the common practice of ranking staff on a bell curve when it comes to performance reviews – here’s why.
  • Dr Tim Baker | 09 May 2013, 03:35 PM Agree 0
    At long last the corporate world is understanding the futility of the ratings system in appraisals. This will put the focus on development and away from evaluation.
  • Julie Cork | 09 May 2013, 04:03 PM Agree 0
    Congratulations ANZ. There has been research around for a long time that supports this move. Ranking schemes like this have been shown to be de-motivators.
  • Dr Arthur Shacklock | 09 May 2013, 04:25 PM Agree 0
    This is hardly new ! I have been consulting and teaching in this area for over 40 years and was a manager myself for 30 of those years. We never ranked anyone against some artificially contrived curve. It is nonsense and in fact you do not need a rating scale either. it has always really been about individual performance against mutually agreed individual goals. Unless, of course, you are dealing with team appraisal which is a different story, but still no artificial curve !! So the ANZ Bank is simply catching up with the 1970s !!
  • Tony Griffiths | 09 May 2013, 04:37 PM Agree 0
    It is a bit of a misnomer to say “The days of the performance review are well and truly numbered”. We will always be trying to measure efficacy in the workplace and a review or look back at performances is how we will measure individuals. The change in this article is all about the maths.
    We do however need to see a focus on development and future behaviour.
  • Glenn Martin | 09 May 2013, 04:41 PM Agree 0
    Here's another perspective on bell-curve ratings: they represent an indictment of the company's recruitment system. Think about it - the company employs each person because they are competent to do the job, and then makes the assumption that a certain percentage of them can't do their job. In those circumstances, wouldn't you have to blame the company for the allegedly poor performance?
    If the company actually selected people because they were competent to do the job, the performance curve would look very different to the standard bell curve, wouldn't it? (Yes, it would.)
  • Rory Martin | 09 May 2013, 04:58 PM Agree 0
    Yes - totally agree with the comments from Arthur & Tim. Performance is a journey against a Mutually Agreed Achievment Plan (The MAAP). A start and an end, linked to agreed outcomes. Performance Management is not a dirty word, but has been made so because of outdated methodology and practices - glad to hear that ANZ is catching up.. maybe we'll even see a ROI in their changes to our own investments with the ANZ.
  • Charles van Heerden | 09 May 2013, 05:27 PM Agree 0
    Pretty broad statement to say "The so-called “forced ranking” system is still common in Australia".

    What evidence backs this up, or is this just another glib generalisation?

    The real issue with performance management is adopting a broader 360 view and encouraging self-assessment.
  • Richard Brincat | 09 May 2013, 05:28 PM Agree 0
    Tim, I am perplexed by your comments. Forced ranking is an additional process applied by some organisations to rank staff. Most organisations do not. So this does not spell the end of appraisals or ratings for ANZ. Rather than applying an outdated method to rank performers, the focus needs to be on the capability of managers assessing staff performance not the system itself. Proper appraisals identify areas for improvement and opportunity to celebrate success
  • Fraser Murray | 09 May 2013, 05:31 PM Agree 0
    At last, ANZ and other are catching up. We had a memorable case once where a superstar manager set stretching targets for direct reports and they simarly dd so, with their teams. Over two years they gave everyone the chance to raise their performance to new high standrads. They created a feedback and coaching culture and hugely exceeded team perormance targets, delivering exceptional bottom line results. Most individuals met or exceeded their performance targets and those that didn't were replaced with high performers. Despite this amazing turnaround, the manager was still told that in year 3 he needed to identify a couple of "poor performers" to fit the bell curve. I'm surprised anyone is still using the bell curve these days!

    Recruit well, clarify expectations, train and give feedback and make sure all line managers have great coaching skills. No bell curve required! There are also easier ways to differentially reward exceptional performers within a controlled budget, without resorting to a bell curve.
  • Tim Hird | 10 May 2013, 09:52 AM Agree 0
    I've got to say I concur with Arthur Shacklock, this is certainly nothing new. It's akin to claiming 'cloud' technology was only invented in the last 5 to 10 years.
  • Greg Evans | 10 May 2013, 10:10 AM Agree 0
    Arthur, Tony, Rory - yes. Forcing performance within a bell curve is one of many problems with the conventional corporate performance (and salary) review.


    I think there are a few flawed assumptions about recruitment and performance in your argument. Potential, rather than competence,is frequently a reason people are employed, rather than competence. Furthermore, it's hardly news that an individual may be exceptionally competent to do a job, but may not perform competently.
  • Julie Cork | 10 May 2013, 11:46 AM Agree 0
    Yes agree that it is not new to understand that rating people against each other on a bell curve does not work as a motivator and performance improver. In fact some research has indicated that it acts as a de-motivator. Maybe what's new is acting on this knowledge. Evidence based HR practices...
  • JB King | 10 May 2013, 03:49 PM Agree 0
    It is not correct to use the bell curve in a population like a workplace. It works for large populations (city or country) in say a health study. Its amazing that corporations have persisted with something that is so blatantly wrong in the misguided belief they are following some statistical theory.
  • Rachel Walker | 14 May 2013, 09:26 AM Agree 0
    Interesting but I was surprised they were doing it in the first place. Surely the only reason to do this is spread pay increases/bonuses but I agree you need to be careful of the unintended consequences.

    Our apprasial system (called "All About Me") is employee centric and focuses on a discussion about the experience the person has in the workplace over the last year and their personal goals. Perhaps we are looking for a different outcome?
  • Frances Dawson | 15 May 2013, 03:16 PM Agree 0
    We seemed to have missed the point that they are retaining forced ranking for bonus payments. It sounds like that bell curve is being taken behind a screen. It will be used for bonuses but not communicated to the individual. How does that connect reward to performance for the individual - I might meet my objectives but hit the wrong part of the curve so get a bonus that doesn't match what I have been told about performance.

    The bell curve sounds like its still alive at ANZ, just hiding.
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