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In a business sense, it usually means a new employee is not quite keeping up with the 'learning curve' required to perform a particular job.

In other instances it would mean 'off the pace' or 'behind schedule'.

The origin of the phrase refers to the statistical bell shaped curve also called the normal probability distribution; where to be 'behind the curve' is to be analogously in area of the graph to the left of the bell curve, to be 'ahead of the curve' analogously in the area of the graph to the right of the bell curve.

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