Is Pareto principle possible instead of normal ranking ?

Over the course of past couple of weeks there have been a lot of discussions on Performance appraisal systems in most of the organizations and how a Bell curve which is commonly used creates disparity and to make things clear let us first explain what is a bell curve



Example of Bell curve

Bell curve is a normal curve which believes that in any normal grouping that there is one extreme which is highly efficient and the other extreme is highly inefficient while the majority is rated as average. This system does not make sense to me as what is the great act when you want to term your employees as average and as there are extremes only some should get into it which becomes a source of power. But ultimately one thing which strikes me is the fact that nothing in the world is normal if it were then we would not need a performance appraisal! But we may not fall in the levels as expected and thus the fact of saying someone is average and poor does not seem good to me.

A strange idea occurred as I was reading "Fooled by Randomness" by Nicholas Nassim Taleb. Who suggested the Pareto principle as a much better option to the normal curve and seriously thinking how it can help in the performance appraisal process.

For starters Pareto's principle also known as 80-20 rule talks that 80 % of problems come from 20 % of causes or 80 % of sales come from 20 % of clients. How this can be applied to performance appraisal is in a simple way. Take the performance levels of all the employees of a certain cadre or level and find out the top 20 who have contributed the most and see if the rule does work over there if it does reward them as extraordinary and congratulate others for coming in the 80 % but make them strive heard to come to the 20 % group and as there is no negativity involved it will motivate the people to work harder.

Just an idea which I hope could decrease the use of normal curve

Cheers

Arvind