Don't Call It Stack Rank: Yahoo's QPR System For Culling Non-Performers 177
An anonymous reader writes "Employees don't like to be graded on the bell curve (or any other curve except for Lake Wobegon's) — we know that from the Microsoft experience. But Yahoo is struggling with what some say is vastly bloated headcount, and CEO Marissa Mayer has implemented a 'quarterly performance review' system that requires, or strongly recommends, that managers place a certain quota of their charges in the less-than-stellar categories. That sounds a lot like the infamous GE-Microsoft stack rank system. But according to AllThingsD's Kara Swisher, who (as usual) broke the latest story about life inside Mayer's Yahoo, Mayer's curve may more similar to the elaborate evaluation system used by her old employer, Google."
Re:Incessant "performance reviews" are destructive (Score:5, Interesting)
When a friend got a job as a senior admin at Yahoo Europe just from knowing the right people, but certainly not having enough experience to demonstrate requisite talent, I decided that it was unlikely to do anything interesting in the foreseeable future. That was about a decade ago.
Even SpaceX does this. Good people leave (Score:5, Interesting)
The whole performance review one's got to go quota system has been going on at SpaceX for a couple years now as well. Elon passed down a "one from every group" quota where at least one person in each group would be given 90 days to improve or get fired. Some of the managers refused to put any of their team on a "process improvement plan" but others just picked someone. It's shitty to watch good employees who are working long hours and getting it done get scared into working harder and faster. The real problem this creates is some of the fluff groups with good managers hold onto their crap employees because the manager will stick up for them whereas the hardcore groups that have bad managers will lose someone who's making good contributions because it's gotta be someone.
There isn't much concern from the top about losing the good ones though, there seems to be a general consensus that some smart kids from college will replace them in a few months once they're gone.
Re:All regimented business decisions are idiotic (Score:5, Interesting)
Sorry to post as AC, but...
I have worked for a large American ISP and (more recently) entertainment company based in Philadelphia for quite some time.
Departments are routinely forced to bucket X% of their full-time staff into the "needs improvement" category regardless of the performance of the department or the employees involved. It leads to horse trading among the departmental managers where mid-managers take turns accepting one or more of these dings (on behalf of some member of their team). If it was only a check mark in the employee's personnel file, I doubt many would care. However, it directly impacts the annual raise (for cost of living adjustments) and annual bonus amounts paid to the poor sap who gets hit with the NI rating and that impact can be quite substantial. This makes no real sense and is devastating for morale for smaller departments that tend to be very careful with hiring in the first place. Every year, the company has a public catharsis where employees are encouraged to vent and this comes up all the time, but the policy continues. And I would agree that it leads to employees with the most options to explore those options more regularly than they would otherwise.
If the goal is to strive for mediocrity, then it is being achieved.
Re:no matter how high (Score:5, Interesting)
I've been in one of those companies. The top performers have a few options: Set things up to be the one competent developer in a team, thus getting good reviews but lots of stress and zero. They can go into the good team, and then play politics, because once all developers are pretty good, most managers can't tell who is actually the best of the lot, or just quit. Then there's option 3: Leave for a less horrible employer, and then quickly poach all those other good developers who hate the system. The lucky company gets a much better staff than average, while the other loses a good percentage of their top talent, needing even deeper staffing cuts. Repeat until all development is sent overseas, because the local talent the company has is now so bad, you are better off with an average team 10 time zones away.
Re:Bad Analogy Department (Score:4, Interesting)
This is pretty much exactly what is happening where I work.
We have an annual evaluation period, and yes, for the first 3 years we got rid of a lot of useless people. Also (surprisingly) we got rid of a lot of useless managers, which almost never happens. And it worked great, we have a very effective group of people, the right level of management, everyone is busy but not too busy and doing good work.
When they first started doing it, it worked as well in real life as it did on paper. For every group of like 5 or 6 people, there were 4 that were doing great, and 1 or 2 that were dragging everyone down. It was easy to look and say "yup, there's your problem".
Now those 1 or 2 are gone and you are making a choice between 4 people who are all about the same and definitely worth keeping. Luckily the system is now mainly just driving raises and not layoffs, but it still sucks.
Re:no matter how high (Score:4, Interesting)
I've worked in a place where the company was doing poorly and they were laying off the bottom 10% from performance reviews... Senior managers and directors were included in the 10%, even one of the VPs was slashed.
The stack ranking system is not a product of some management hive mind that helps managers -- in fact, most hate it. It's a product of the CEO, HR, and usually some business consulting company. Almost everybody else is worse off for it, including all levels of management below the top couple of tiers.
Re: There IS something wrong with it (Score:2, Interesting)
Well put mostly. The entire purpose of a union is to extract as much value from an employer as possible, just as the purpose of a corporation is to extract as much as possible from labor and everyone else. That is, as the right wingers like to say, 'fair and balanced'. Being anti union and pro corporate makes no logical sense unless you believe workers should have no rights and should be paid the minimum possible with no recourse. Not being accusative as your post is quite thougtful, but the US is generally full of anti worker types, even among working people. Propaganda is largely responsible for that, plus an insane belief in the (proven false) myth of upward mobility in our society.
You're quite correct though in that if you don't want unions, a really good way to achieve that is to not set out to screw over your employees. The rabid anti union types never seem to mention that part.
Re:Main effect: The good ones will leave (Score:2, Interesting)
The system is actually very easy to game. Here's how you do it: As a manager, you need to identify and hire a couple people who are totally worthless each year. This is actually a lot easier than hiring good people.
Then you can give the bad ratings to those people. If they're really that bad, they've probably figured it out, and won't be upset with the horrible rating; they'll be happy to have at least had a job for a while.
Some day companies will figure out that this system encourages such behavior and do away with it. Until then, hiring a few idiots a year works just fine. Heck, you can probably get the recruiters you work with (if they're external) to help out since they've no doubt got annoying people they just really want to place so they can stop dealing with them.
The best part of gaming it this way is you can take care of the people who actually get your work done properly. If you're voluntarily giving up a few people for crap grades at the stack, it's easier to get some of the good grades for others on your team.
Re:Main effect: The good ones will leave (Score:4, Interesting)
No, a financial motivation gives them reasons to game the system no matter what's best for your company. See: Elop at Nokia or Fiorina at HP for good examples.