Shift away from Bell Curve Appraisal in

Indian IT Companies
Indian IT Companies are dumping Bell Curve appraisal system. Perspectives of 3
Indian IT Companies HCL, Infy and Accenture are presented here.

HCL begins shift from bell curve appraisals

towards feedback-based system
By Prachi Verma, ET Bureau | 19 Oct, 2015, 04.57AM IST
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NEW DELHI: Now it's HCL Technologies' turn to kiss the bell curve goodbye, though only
partially as of now. The software services exporter is identifying departments where it can use a
feedback-based performance appraisal system, joining a growing list of companiesthe latest
Indian entity being Infosys-that have discarded the bell curve or similar appraisal mechanisms
that force fit employees into performance categories.
A few years ago, HCL Tech was following an open rating, or ra ..
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Infosys bids goodbye to bell curve for

performance assessment, attrition comes
down
Prachi Verma, ET Bureau Sep 26, 2015, 10.22AM IST

(The change in the performance)

NEW DELHI: Infosys has finally bid adieu to the bell curve as a performance assessment tool
for its 1.76 lakh employees. The decision is already showing results.
Attrition is estimated to be 13 per cent this quarter, compared with more than 20 per cent a year
ago. On an annualised basis, the rate was 14.2 per cent at the end of June, ET had reported
earlier.
"From this quarter, we have removed the forced ranking and in the October appraisal, employees
will be appraised on the open ranking. From now on, the managers will take a call and reward,"
said Richard Lobo, senior vice president, human resources department, at Infosys. The IT
services company started conversations around getting rid of the bell curve three months ago.
The change in the performance assessment system has primarily been pushed by chief executive
Vishal Sikka. Since taking over in August last year, he has made several employee initiatives,
including relaxation in dress code. "Attrition is now close to 13 per cent. One of the big reasons
for this (attrition) to come down is because we consciously got rid of the bell curve," Lobo said.
The new system, he said, will be more open and flexible with a pronounced focus on rewards for
performance.
Infosys is one of the latest companies globally to move away from bell curve, which is often
criticised as a forced ranking system as managers have to mandatorily classify employees into
three categories, and rank the performance of 70 per cent as average, 20 per cent as high and 10
per cent, low.
"In performance evaluation based on bell curve, it became a race to get to the top for employees.
We were losing a lot of good people who were not ranked at the top," Lobo said.
As reported by ET earlier, among the top four Indian IT companies, Infosys had been grappling
with rising attrition rates of over 20 per cent up until the latter half of 2014. It had also seen
several high profile exits, causing concerns about employee retention among analysts.
For this fiscal year ending March 2016, the company is looking to hire 20,000 people. "We are
growing and at the same time, our attrition rates are coming down," he said.
While Infosys has seen a drop in employee turnover, Mumbai based larger rival Tata
Consultancy Services in July reported a rise in attrition at 15.9 per cent, which the company had
attributed to improving demand in the IT sector and seasonality.
Kissing goodbye to the bell curve, however, is creating problems to managers while justifying
ratings to team members. "They will now be forced to face their team members. In the former
world, it was easier for the managers to push any disagreement from the team members to the
forced ranking," Lobo said.

Accenture too drops bell curve appraisals

LUBNA KABLY | TNN | Jul 27, 2015, 03.04 AM IST
Typically, the bell-curve mechanism segregates all employees into distinct baskets-top, average
and bottom per... Read More
MUMBAI: In September, management consultancy firm Accenture will join the growing list of
companies such as Google, Microsoft, Adobe and KPMG which have discarded the bell-curve or

similar mechanisms for conducting annual performance appraisals of their employees. The move
at Accenture is aimed at ongoing real-time feedback and spells good news for its 3.36 lakh global
employees, nearly 30% of whom are based in India.
Typically, the bell-curve mechanism segregates all employees into distinct baskets-top, average
and bottom performers - with the vast majority being treated as average performers.
The reasons for this continued trend of companies discarding the bell-curve rating mechanism
are manifold.
"Today, goals are no longer pushed from the top level to the bottom, but emerge through
collaboration and are the result of a dynamic interplay between levels and various parts of the
organization. To follow the typical bell-curve, team leaders had to re-categorize employees.
Often good performers were labelled as average to fit the curve. This unseen hand of moderation
resulted in disgruntled and disengaged employees," explains M P Sriram, partner at Aventus
Partners, a HR consultancy and talent acquisition firm.
"We are shifting from an annual 'performance management' process to a new 'performance
achievement' approach that includes real-time, forward-looking conversations about setting
priorities, growing strengths and creating rewarding career opportunities for our people. The
'performance achievement' approach will focus on the achievements and talents of each
employee. It will result in a holistic view of performance and potential and guide in appropriate
decision making relating to rewards and career progression. Our leaders will spend more time
coaching and talking with employees. We are on a journey and are committed to moving at the
right pace to roll this out across the organization," Accenture-India confirmed in response to
TOI's queries.
This April, KPMG in India discarded the bell-curve and introduced a real-time feedback
approach. Employees are now given an instant feedback when they complete an engagement:
they can thus work on their areas of development on an ongoing basis, and it avoids the year-end
appraisal related disappointments, if any.
"We have introduced this change for the current year (the performance year ending March 2016)
and hence providing the requisite training and preparing the managers (responsible for giving the
feedback) to handle the new process is all currently work-in-progress. Training and hand-holding
our people is clearly a critical part of successfully managing the transition to the changed
approach," says Shalini Pillay, head-people, performance and culture at KPMG-India. As this
change requires a serious realignment in mind-set, culture and way of working, the benefits of
the new mechanism will not be immediately quantified.
The shift away from the bell-curve or similar one-time ranking mechanisms seems to be gaining
ground, especially in the consultancy and technology sector, where human assets (employees) are
invaluable. Application of the bell-curve doesn't suit a knowledge-driven workforce. A mid-tier
software company has replaced the bell-curve with the performance-curve based on the long tail

method.
The aim is to identify, reward and develop skills in hyper-high performers, high performers,
potential high performers, and so on till one reaches the end of the tail. The difference being that
employees are not compared against each other and there is no cap on the number of people who
can fall within a particular segment. Another large consultancy, in the Big 4 league, has recently
re-designed its performance management system. The new system is yet to be scaled up and
rolled out globally and has not yet been taken up in India..
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"The two basic pillars for successfully transitioning are rating absolute performance (rather than
'relative' performance, which the bell-curve measured) and having constant conversations," says
Sriram.
"Employees should be explained that a regular feedback will enable a continuous learning
culture, it will encourage them to be risk-taking, innovative and more collaborative. From the
team-leaders' perspective, as the ownership of the process lies with them (and not the unseen
hand of moderation), it empowers them, helps them make effective compensation decisions and
above all results in honest conversation with individual team members," adds Sriram

Bell Curve, Indian IT Companies