ANZ abandons bell curve rankings

by Stephanie Zillman09 May 2013

The days of the performance review are well and truly numbered. The Australia and New Zealand Banking Group (ANZ) has announced it will axe the common practice of ranking staff on a bell curve when it comes to performance reviews.

The so-called “forced ranking” system is still common in Australia, especially so in the finance sector, but its long reign may be coming to an end – top HR directors and senior executives are taking note of how unpopular they are with staff. What’s more, it is being increasingly recognised that the system may in fact disadvantage solid performers in cases where many colleagues have all achieved a strong performance.

An ANZ spokesman told The Australian Financial Review the bank was “shifting the focus away from measuring individual performance against peers, to measuring how well an individual delivers against agreed objectives”.  However, it will still be retaining forced ranking for bonus allocation.

The Finance Sector Union is calling for the performance bell curve to be done away with altogether, but national assistant secretary Geoff Derrick commented that the move was a step in the right direction. Derrick argued using forced ranking for allocating individual bonuses created unfair results and was harmful to team collaboration.

As it stands, ANZ rewards the top 5% of performers with the largest bonuses, while the the rest of the bonus pool is shared among the middle 65% of performers. On the other side of the coin, the bottom 30% do not receive a bonus.

COMMENTS

  • by Dr Tim Baker 9/05/2013 3:35:41 PM

    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.

  • by Julie Cork 9/05/2013 4:03:02 PM

    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.

  • by Dr Arthur Shacklock 9/05/2013 4:25:11 PM

    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 !!

Most Read