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Hey, wait – is employee performance Gaussian distributed?

timdellinger.substack.com

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Re: Hey, wait – is employee performance Gaussian distributed?

#201

Post by sangnoir »

robertlagrant wrote: post #178
sangnoir wrote: post #70

> Performance management, as practiced in many large corporations in 2024, is an outdated technology that is in need of an update Author made a couple of fundamental mistakes: the first is they assume employees are (or should be) paid according to how much they "individually" earned the company. Employers strive to pay employees the minimum they can bear, on employer's terms. Those terms are information asymmetry and…

> Employers strive to pay employees the minimum they can bear, on employer's terms I don't think it's worth thinking like this. An employee's salary is floored by their value to any company, and ceilinged by their value to the company currently employing them.

The absolute numbers are hard to accurately calculate for every employee, and change all the time, so at best, the limits are fuzzy.

That said, do you care to guess where in this floor-to-ceiling range the employers' ideal would fall? Does that answer conflict with my thesis?

Re: Hey, wait – is employee performance Gaussian distributed?

#203

Post by hammock »

Why would performance be pareto distributed? Not saying it isn't, just wish we would unpack that idea a bit more.

IQ and other personality traits are gaussian, with which I would expect performance to be correlated

But, the mythical "10X employee" would seem to imply pareto, along with 80/20 notions of both personnel and an individual employee's day-to-day workload

How do we resolve this dichotomy?

Re: Hey, wait – is employee performance Gaussian distributed?

#204

Post by tptacek »

jppope wrote: post #101
ianbicking wrote: post #67

"IQ is Gaussian" – it was pointed out somewhere, and only then became obvious to me, that IQ is not Gaussian. The distribution is manufactured. If you have 1000 possible IQ questions, you can ask a bunch of people those questions, and then pick out 100 questions that form a Gaussian distribution. This is how IQ tests are created. This is not unreasonable... if you picked out 100 super easy questions you wouldn't get…

Correct. IQ isn't an effective measurement of intelligence as is typically stated. It is (at best) a measurement of learning disabilities.

I think this would be more accurate without the "at best"; I think IQ is widely considered to be a useful diagnostic measure, misapplied to prediction in generalized populations.

Re: Hey, wait – is employee performance Gaussian distributed?

#205

Post by thrwaway1985882 »

Aurornis wrote: post #188
thrwaway1985882 wrote: post #142

Earlier quoted context omitted.

> The second mistake they made is assume that companies would prioritize being lean and trimming the mediocre & bottom 5%. There are other considerations, combined productivity is more important than having individual superstars working on the shiniest features. I'll add a perverse incentive too that I've talked about elsewhere – hiring is a goddamn mess right now. If I trim the bottom 5% of my org (in my case, 2-3 e…

> But for now, I definitely need my low performers. Firing people if you can't get backfill is illogical, obviously. Once a company institutes a hiring freeze, low performers get locked in until forced layoffs. You'll see some people stop working and start job searching because they know that any contribution they make at all is better for their manager than having them fired. However, deliberately keeping low perfor…

> However, deliberately keeping low performers around as a buffer becomes a self-own on a longer time horizon. Smart managers will negotiate hiring exceptions to replace a low performer now rather than keep that headcount occupied for safety.

This is a "the times are good" play, and it can absolutely work. But the real trick is understanding

> Once a company institutes a hiring freeze

that if you as a manager are reacting here, the die is already cast. There are plenty of unofficial "we're frozen but aren't saying it out loud" moves I & peers in other companies are seeing right now: downleveling, additional approval gates added to slow things down to a more favorable time, you name it.

Yes, over a long enough time horizon ballast will weigh down the boat, but theta is on my side right now.

Re: Hey, wait – is employee performance Gaussian distributed?

#206

Post by hammock »

silvestrov wrote: post #116
FredPret wrote: post #77

Earlier quoted context omitted.

This is a subtle aspect of intelligence measurement that not many people think about. To go from an IQ of 100 to 130 might require an increase in brainpower of x, and from 130 to 170 might require 3x for example, and from 170-171 might be 9x compared to 100. We have to have a relative scale and contrive a Gaussian from the scores because we don’t have an absolute measure of intelligence. It would be a monumental achi…

I wonder how a graph looks for "how many seconds does it take people to run 100 meters". Might be a mix because quite a number of older or overweight people runs very slowly and some can't at all.

Poisson distribution

Re: Hey, wait – is employee performance Gaussian distributed?

#207

Post by arctek »

stoperaticless wrote: post #92
diggan wrote: post #76

Earlier quoted context omitted.

> the first is they assume employees are (or should be) paid according to how much they earned the company From the perspective of a employee and/or human, that does seem like the most fair way of distributing what the company earns, sans the money that gets reinvested straight back into the business itself. But I'd guess that'd be more of a co-operative, and less like the typical for-profit company most companies ar…

There is no way to unambiguosly decide who is responsible for which earnings. Hipothetical two people cooperative that produces simple hammers. One specializes on wooden part, the other on metal part. How much each of them earned to the company? (Or producing and selling; or one spending his lifesavings to buy pricey hammer-making-equipment while other presses buttons on said equipment)

Goes further than that too, suppose the one working on the wooden part is slow and the one on the metal part is faster. And surely the value of one part or another is also different, even though its the combined value that's relevant.

Suppose as well there are a thousand people lined up to make the wooden part but hardly any for the metal, then surely the ones who work on the metal part will (try to) command a higher wage too.

Re: Hey, wait – is employee performance Gaussian distributed?

#208

Post by sapiogram »

fwip wrote: post #156
sapiogram wrote: post #106

Earlier quoted context omitted.

> and then pick out 100 questions that form a Gaussian distribution. This is how IQ tests are created. You missed an extremely important final step. People's scores on those 100 questions still aren't going to form a Gaussion distribution. You have to rank-order everyone's scores, then you assign the final IQ scores based on each person's ranking, not their raw score.

It would form a gaussian distribution if you pick the questions carefully enough. If you rank-order scores and fit to the distribution after the fact, the questions are nearly irrelevant, as long as you have a mix of easy, medium and hard questions.

> It would form a gaussian distribution if you pick the questions carefully enough.

Why would that be the case? The Central Limit Theorem does not apply here, because the observations (questions) are correlated with each other.

Re: Hey, wait – is employee performance Gaussian distributed?

#209

Post by suzzer99 »

brabel wrote: post #66
jedberg wrote: post #65

One of the things I loved about working at Netflix was that the base assumption was that everyone was a top performer. If you weren't a top performer, you were given a severance check. The analogy we used was a sports team. Pro sports teams have really good players and great players. Some people are superstars, but unless you're at least really really good you're not on the team. Performance and compensation were com…

It's really difficult for me to believe that they really got 10% top performers. For one, knowing the cut-throat nature of employment there, I would expect only a minority of developers would be willing to try working there, despite the awesome rewards. Another reason I really don't trust that to be true is that I've never seen a good way to measure who is a top performer and who is not. I don't think there's one, pe…

> Another reason I really don't trust that to be true is that I've never seen a good way to measure who is a top performer and who is not.

I can work at a new place for a week and know who the top performers are. Their names are all over the commits, and whenever you ask someone a question, you get funneled to the top performers.

Then you talk to them. If they're open and engaging, and don't seem like they got their status just by being around forever, they're almost certainly a top performer.

Re: Hey, wait – is employee performance Gaussian distributed?

#210

Post by EVa5I7bHFq9mnYK »

mjburgess wrote: post #145
EVa5I7bHFq9mnYK wrote: post #133

Earlier quoted context omitted.

Sum of N independent similarly distributed variables (questions), will tend to be normally distributed, that the central limit theorem, no need to manufacture anything.

They're not independent.

Yeah, if one answers question A correctly, they is more likely to answer question B correctly, right?
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