Just as other IT majors who abandoned old-fashioned employee appraisal systems, India's second largest software firm Infosys has finally stopped using the bell curve, a tool used to evaluate its 1.76 lakh employees' performance.
The move is already showing some positive impact and the company's attrition rate is projected to come down to 13% during the July-September quarter. Infosys reported an attrition level of 20% during the same quarter last year.
"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," Richard Lobo, senior vice president, human resources department, at Infosys, told The Economic Times.
"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 will be more open and flexible with a pronounced focus on rewards for performance."
By ceasing to use the bell curve, Infosys joins a list of global IT companies that moved away from the appraisal system, which is "often criticised as a forced ranking system."
Under the system, managers are compelled to separate the employees into three categories and "rank the performance of 70% as average, 20% as high and 10%, 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.
In a similar move, global software giant Accenture had said in July that it would abandon annual performance evaluation and also dump the ranking system for its employees.
Accenture laid out plans to put in place a "more fluid system," which would enable its employees to get "timely feedback" from their superiors on a continuous basis after an assignment is completed.
Infosys' latest move to discontinue using the bell curve is a part of CEO Vishal Sikka's initiatives to reduce attrition levels and improve employee productivity. Taking charge as the chief of Infosys in August last year, Sikka has brought many changes for 'Infoscions', including doing away with the formal dress code.