Why Some Companies Are Ditching the Annual Appraisals and Employee Ranking Systems

New Delhi, October 20, 2015 (Newswire.com) - Rajeev Bhadauria, director, group HR, Jindal Steel and Power Ltd, sees “forced ratings” and plotting performance along a bell curve as a kind of Procrustean Bed—the term comes from a Greek myth about a bandit who stretched or cut off people’s limbs to fit them on to an iron bed—or arbitrary standard.

The company, which follows an annual review process, has done away with the bell curve system. Bhadauria says that given the company’s size and the number of hours in a year that senior leadership already spends on evaluation, it is impractical for the firm to do the formal review process more frequently. Also, given the nature of the industry, it takes some time for any new business initiative to show concrete results. And a more frequent review process might only capture small, incremental developments, he says.

Doing away with the bell curve system, however, has made it possible for the company to look at individual performances more closely, and appreciate good work on an ongoing basis. The focus is not on making employees fit a certain mould or follow the lead of someone who is known to be a top performer.

Each person has their own strengths, and the idea is to identify and hone those. You are as good as you are, says Bhadauria, and are not evaluated on how you compare with someone else in the organization.

Bhadauria says this new system of evaluation has made it important to train managers in balanced evaluation, setting targets realistically and getting employee buy-in by letting them have a say in how they would like to contribute to the organization’s goals. “When employees set their own goals, they take ownership of them and stay motivated through the year, as opposed to when the organization imposes a goal on them,”

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