Why be Rational?

18 October 2004

Mumbai: Here I am, close to retirement, a great believer in the power of reason, spent 30 years bashing perfectly good people in companies who were being "irrational". However, some months back, when the possibility of Sonia Gandhi becoming prime minister was real, I was feeling terrible about it (glad it did not happen). That is being irrational, people told me. The constitution allows her to be the PM. But there is this little something within me, which does not live by rationality and the constitution.

And that little something keeps coming up all the time, which makes me a bit of a corporate rebel. Take this thing called the Bell Curve they threw at me all the time about 'performance appraisal'. The theory says that you have most employees in a kind of middle class, as far as performance is concerned, there is a bunching of the real bright guys at one end and the bottom ten per cent at the other. As managers, we had to rate our staff for performance, and the theory said that when you rate your people, that is how the broad picture must emerge. If you draw a graph, it looks like a bell and, Hence, the terminology. The bottom ten per cent gets low rewards or none at all.

Sorry, I told the HR guys, first of all I don't think that the appraisal system really judges people. It fudges more than it judges. And with an imperfect system it is not fair to demotivate a few people. It is also silly because the organisation suffers the most as a consequence of having demotivated people around.

It worked for Jack Welch, they told me. Yes, I said, but Jack Welch believed in the system. He actually sacked the bottom ten per cent and kept raising the bar. You guys don't sack; you just create demotivated guys out of perfectly decent human beings who get totally befuddled doing very routine jobs.

You are negative, they told me, adding that everybody else has accepted the system. So can we have your Bell Curve, please …or else? Needed the job, so I did the Bell.

And to salvage the situation I had to break other parts of the constitution. I told the bottom ten per cent that they should not feel hurt, as this is one of those mass things where some unfortunate guys get caught up. I did also give them a real feedback, which I felt was the honest thing to do for the individual and the organisation. I was not successful in making them feel better about themselves — they are simple honest people who are sensitive, and in our culture, insults (being rated poor performers), are a huge emotional strain on the individual.