Microsoft axes criticized employee ranking system

Microsoft's (MSFT -0.6%) "stack ranking" system, which forced managers to rank a certain percentage of employees as top, average, and poor performers, is being discarded. Former Microsoft workers have criticized the system for creating a work environment in which good employees occasionally received bad reviews, and in which workers felt as if they were competing with each other.

In an internal memo discussing the change, HR chief Lisa Brummel says Microsoft will now place a greater emphasis on "teamwork and collaboration" when reviewing employee performance, and will no longer have a "a pre-determined targeted distribution" for determining employee rewards.

The policy changes comes a few months after a reorg meant to foster greater collaboration between business units, and near the tail end of the Steve Ballmer era.

Interestingly, Microsoft is abandoning stack ranking just as Marissa Mayer gets criticized for implementing something similar at Yahoo.

From other sites
Comments (5)
  • Deja Vu
    , contributor
    Comments (1828) | Send Message
    Since Mayer doesn't have a single original thought in her head, she now stands there looking foolish.


    Ali Baba is giving this woman her totally undeserved 15 minutes of fame.
    12 Nov 2013, 04:16 PM Reply Like
  • RipCrackle
    , contributor
    Comments (122) | Send Message
    I think Mayer is doing it so as to trim non-talent. She's been pretty clear about refreshing talent at Yahoo, so who knows what cess pool was there when she first joined.


    I am all for a smaller but talented force of engineers.
    12 Nov 2013, 04:21 PM Reply Like
  • Chrishunet
    , contributor
    Comments (18) | Send Message
    I don't think the stack ranking system is needed to trim non-talent. It is really up to the manager what to do with employees. I've known people with consecutive 5's that are still employed in their group and I've known people that were let go after one 5.


    Anyway, this will get the engineers happier.
    12 Nov 2013, 04:26 PM Reply Like
  • u1w1e
    , contributor
    Comments (102) | Send Message
    I think investors greatly undervalue happy employees. Maybe there is somehow this idea that employees most lose for the investor to win.


    Funny enough companies like Google, Apple, Facebook seem to be doing quite well despite their employees being happy ;-)
    12 Nov 2013, 04:40 PM Reply Like
  • Raster
    , contributor
    Comments (826) | Send Message
    As a full time employee from 1994 to 2005, and a people manager for most of that time, I can tell you the curve was a very bad management tool.


    1) Review scores were determined before the managers read your review documentation.
    2) Poor reviews needed to be given out, so those went to new people in the group, or people in the process of transitioning out
    3) Review scores were often based on what you did in the last month or so before review, not your year long performance
    4) The review process was highly political
    5) Worst of all, your review was based more on your managers ability to negotiate with his/her peers in leveling meetings at the Director and GM level. Have a weak boss, and you get scraps. Have a powerful, connected boss and you could be an idiot, but still get rewarded.


    The process was cluttered with paperwork and review documents that took days to complete, but the leveling meetings that determined your score happened many weeks in advance of your review document submittal deadline.


    I refused to fire one of my top performers because she had gotten a poor review the year before, and it was expected that she would get another. She exceeded expectations, and I went to the wall for her.


    The "Curve" in place since before 94 really needed to go away. It was in no way fair, and I'm surprised there has not been a class action suit.
    12 Nov 2013, 09:16 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs