Performance Reviews & Bell Curves

by Jason Gillikin
Assessing employee performance based on bell curves can be tricky.

Assessing employee performance based on bell curves can be tricky.

pencil draw graph image by Anatoly Tiplyashin from

Grading on a curve isn't just for college papers--many companies use numeric performance reviews and then fit employees to a bell curve. Unlike school, however, an employee's rating can determine whether she will get a bonus check or an unemployment check. Using bell curves for performance reviews can be tricky, with several potential problems to watch for.

Assessment Systems

Companies use many different options for measuring employee performance. Some firms impose assessment tests to ensure that employees have requisite skills, and others rely on productivity metrics or ability to deliver on mutually agreed-upon goals. Still other firms use a numeric system that assigns each employee a composite number that represents her performance. This number can be trended over time and compared against other employees in the organization, even those with dissimilar jobs.

Bell Curves

Companies that use numeric scoring often rank employees on a bell curve. Bell curves--also called the "normal distribution"--provide statisticians with a means of identifying top and bottom performers, and tools to identify how much a particular employee's score deviates from the median score. Some companies take bell curve rankings a step farther and require managers to classify employees on a curve. Other companies use the normal curve to "calibrate" rankings across business units or line managers.


Bell curves can be trusted most when the assessment tool is objective. If an employee is rated on the number of widgets produced per hour, then this number is the same no matter who is doing the math, and each employee's performance may be validly compared to other employees. However, most employers measure things, such as "professionalism" or "integrity," which defy objective mathematical scoring and instead require a subjective assessment by the supervisor.


Performance reviews are typically administered by an employee's direct supervisor. Therefore, assessment programs that rely on subjective scoring may be affected by an employer's bias. For example, a boss who likes one employee might give him high marks even though he gives mid-level marks to a different employee who performs just as well but lacks a warm relationship with the boss.

Interrater Reliability

Because performance assessment often includes subjective scoring, interrater reliability--or the consistency between two people assessing the same behavior--becomes relevant. For example, if two supervisors listened to the same customer-service call, one supervisor might give the employee a high score and the other might give a mediocre score, even though both witnessed identical behavior. The greater the disparity between individual assessors, the less confident a company should be that any individual employee's performance score objectively rates her performance relative to her peers.

Impact of Bell Curve Rankings

Loren Gary of Harvard Business School notes that the practice of firing employees who fall on the low end of the bell curve can create long-term problems by eventually forcing adequately performing employees into the low-performer zone, as the truly inferior employees are fired early on, providing diminishing returns to the employer and increasing internal competition that can reduce collaboration.

Small Business Implications

For a bell curve appraisal system to have statistical validity, there must be a fairly large number of employees in the pool. Typically, a sample size of 30 or more is considered appropriate--fewer than that, and confidence in the predictive power of the bell curve begins to diminish sharply, according to the central limit theorem. For that reason, many companies with smaller workforces avoid force-fitting employees to bell curves.

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