Study: Long-held view of 'bell curve' in performance measurement proven flawed

(From Indiana University) -- The dreaded bell curve that has haunted generations of students with seemingly pre-ordained grades has also migrated into business as the standard for assessing employee performance. But it now turns out -- revealed in an expansive, first-of-its-kind study -- that individual performance unfolds not on a bell curve, but on a "power-law" distribution, with a few elite performers driving most output and an equally small group tied to damaging, unethical or criminal activity.

This turns on its head nearly a half-century of plotting performance evaluations on a bell curve, or "normal distribution," in which equal numbers of people fall on either side of the mean. Researchers from Indiana University's Kelley School of Business predict that the findings could force a wholesale re-evaluation of every facet related to recruitment, retention and performance of individual workers, from pre-employment testing to leadership development.

"How organizations hire, maintain and assess their workforce has been built on the idea of normality in performance, which we now know is, in many cases, a complete myth," said author Herman Aguinis, professor of organizational behavior and human resources at Kelley. "If, as our results suggest, a small, elite group is responsible for most of a company's output and success, then it's critical to identify its members early and manage, train and compensate them differently from colleagues. This will require a fundamental shift in mindset and entirely new management tools."

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