SHOCK! Microsoft HR kills its hated 'stack-ranking'

Microsoft internecine warfare

Manu Cornet (cc)

Et tu, brutal Microsoft?

Microsoft (NASDAQ:MSFT) is eliminating its much-maligned way of evaluating staff performance and deciding on pay and bonuses. Its forced ranking distribution method, known as "stack ranking" has been blamed for causing the decline of the company in recent years.

But, in IT Blogwatch, bloggers wonder whether the new system will be any better.

Your humble blogwatcher curated these bloggy bits for your entertainment.


Shira Ovide was one of several bloggers who broke the story:

Microsoft is killing “stack ranking” [a] sometimes loathed employee-review system [that] has been a fixture of Microsoft for years [but] has made Microsoft a more cutthroat and political place to work...critics said.


The company is ditching the bell curve and numerical rankings. Instead, employees will get more frequent feedback...and managers will have more control over how bonuses are doled out.  MORE


And Janet I. Tu writes for Redmond's local rag:

Its controversial stack-ranking review system [which] has long been the object of critical barbs by those who believe it lowered employee morale and stymied innovation.


Managers each year were required to put set percentages of their team’s employees into one of five groups [which] affected everything from promotions to bonuses. ... Even if all members of a team performed well...the manager was required to designate a set percentage as underperformers.


Lisa Brummel, Microsoft’s head of human resources [said] “We will continue to invest in a generous rewards budget, but there will no longer be a predetermined targeted distribution” [and] there will be “no more ratings.”  MORE


So Preston Gralla explains why it's significant:

Microsoft has a sometimes brutal corporate culture, and has chewed up and spit out more than its share of talented people who got caught in turf wars and cross-fires.  MORE


Neil McAllister has more on that:

Microsoft may soon be a much nicer place to work. ... Stack ranking has its origins with General Electric in the 1980s under CEO Jack Welch. ... But the policy won few accolades as it was implemented at Microsoft, with critics charging that it drove talented employees away [by] labeling them as underperforming and forcing them to focus on competing with their peers.


Vanity Fair magazine went as far as to blame stack ranking for what it called "Microsoft's lost decade." ... The move comes as Microsoft continues to restructure around the new "One Microsoft" strategy that was recently introduced by outgoing CEO Steve Ballmer.  MORE


While Edward Berridge puts it more colorfully: [EWWWWW! -Ed.]

The system turned [Microsoft] into a nest of backstabbing and conspiring, where tongues had to be so far up the bottoms of management, it was possible to lick a manager's frontal lobe.


[It provoked] a litany of complaints about the stack-ranking system and complained that Redmond was losing talented people. ... Everyone admitted that the entire system was pants.  MORE


But this pseudonymous ex-Microsoftie isn't so sure the new way will be better:

[Stack ranking] is good for justifying the elimination of bad employees, but overall there are better ways to evaluate performance and offer rewards...that’s [not] counter to business goals.


Another bad consequence [was] that it would discourage risk-taking by incentivizing employees to stay in their current group. ... The longer your tenure in a group, the higher your rating is likely to be because you perform better when you know the ropes. ... This also fosters bureaucracy and politics.


That being said...what will probably happen [now] is a kind of stack ranking that is less transparent. ... So, employees will not know where they stand relative to others when they see their bonus check.  MORE

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