What the bell curve means for your team of 5: In a healthy team, performance naturally distributes across the rating spectrum — not everyone performs the same. HR guidelines suggest the majority of your team (roughly 2–3 people on a team of 5) should fall in the "Strong" band. One person might reach "Exceptional"; one might be "Developing."
Why this matters: Rating inflation — giving everyone "Strong" or above — feels kind but distorts the system. It removes the signal from "Exceptional," squeezes the pay budget unfairly, and gives "Developing" performers no impetus to grow. Rating deflation — clustering at "Developing" — is equally distorting: it demoralises a capable team and can push strong performers to leave.
The honest middle: The hardest ratings to give are the ones in the ambiguous middle. Borderline cases — where someone is close to "Strong" but not quite, or where personal circumstances affected a "Developing" year — are where most bias enters the process.