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Microsoft Kills Stack Ranking 204 204

Nerval's Lobster writes "Microsoft once demanded that its managers place their subordinates on a scale from 'top' to 'poor,' a practice that fueled some epic backstabbing within divisions. Last year, a Microsoft contractor with knowledge of the company's internal review processes told Slashdot that Microsoft was actively working to fix that system; just this week, the company announced that stack ranking was well and truly dead (and that's certainly one way to fix it). 'Lisa Brummel, head of human resources for the company, sent an e-mail to employees notifying them of the change today, according to my contacts,' ZDNet's Mary Jo Foley wrote. According to the memo, there are 'no more ratings,' 'no more curves,' and 'Managers and leaders will have flexibility to allocate rewards in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget.' They're trying to encourage more teamwork and collaboration throughout the company. As we discussed on Saturday, Yahoo is adopting this method just as Microsoft is abandoning it."
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Microsoft Kills Stack Ranking

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  • by JoeyRox (2711699) on Tuesday November 12, 2013 @04:56PM (#45405153)
    And yet both companies will have the same outcome - continuing their long decline into irrelevant mediocrity. Maybe both companies should consider looking a little further up the management chain to discover what truly ails them.
  • by themushroom (197365) on Tuesday November 12, 2013 @04:58PM (#45405167) Homepage

    Yahoo seems to be on a roll with this, as they adopted a Win8 pane interface on Flickr right about the time Microsoft was forced to concede people without tablets, smartphones, and touchscreens on their computers (and some who do have those things) dislike it greatly.

  • by gstoddart (321705) on Tuesday November 12, 2013 @05:05PM (#45405261) Homepage

    Microsoft once demanded that its managers place their subordinates on a scale from 'top' to 'poor,' a practice that fueled some epic backstabbing within divisions.

    A bunch of years ago a company I worked for was doing something similar.

    They essentially demanded it be placed on a bell curve. So, in our group of 5 people, all of whom were good solid people who worked well together and got stuff built, management was insisting there be 1 awesome, 1 pretty good, 1 good, 1 needs work, and 1 terrible -- and that had nothing whatsoever to do with the individual strengths of the team, just some idiots vision of how these things should be managed. My manager didn't feel that anybody belonged below the top 1 or 2 rankings.

    If you decide in advance that your ranking has to take on an artificial distribution, you end up with a really pointless management system which really just serves to give people with no knowledge of what really happens a nice easy to read (and often incorrect) metric.

    It really does make for a pointless "management by inapplicable metrics" kind of culture. And so often it's all about making managements job easy and something they can point to the formulas -- and seems to offer zero insights into what is actually happening. The more companies blindly use metrics, the less they actually grasp what their organization is actually doing.

  • Hmmm interesting (Score:5, Insightful)

    by Nov8tr (2007392) on Tuesday November 12, 2013 @05:07PM (#45405289) Homepage
    OK we know from MS history they treated customers poorly. We know they treated mom & pop shops poorly. They treated the companies that make apps for them poorly. Now we find out they even treated the employees poorly. Honest question, did they ever treat anyone right? I mean besides the management figures making 7 figures. Wait, that might not even be true. Wow, sure am glad I never worked there.
  • by TWiTfan (2887093) on Tuesday November 12, 2013 @05:11PM (#45405345)

    Yahoo is adopting it because it's a great way to get rid of dead weight, as long as it's used BRIEFLY. It's really not meant to be used in the long-term (as MS and several other have tried to). In the short-term, Yahoo will lose some dead weight. In the long-term, they'll get paranoia, indecisiveness, etc. (in short, a company culture of fear).

  • by JoeyRox (2711699) on Tuesday November 12, 2013 @05:20PM (#45405447)
    I think you glossed over my point. It's not these silly management initiatives which determine the outcome of a business's success but the core intelligence and culture of the business itself, particularly in its executives and management. Poorly-run companies are always latching on and off the the latest management fads because they lack core direction and competence.
  • by Nemyst (1383049) on Tuesday November 12, 2013 @05:23PM (#45405495) Homepage
    Bell curves can work in academic settings (grading exams and homework) and often represent large-scale populations well, but they have no purpose in management. If you're only hiring the best (which is what all the companies you ask will claim), how can you have a bell curve? That's entirely ignoring the fact that any statistical method using a population size of five is utterly meaningless.
  • by i kan reed (749298) on Tuesday November 12, 2013 @05:33PM (#45405623) Homepage Journal

    That's not the problem. I mean, it's a problem. But the real problem is trying to apply numerical methods to personal subjective assessment.

  • by Atrox666 (957601) on Tuesday November 12, 2013 @05:33PM (#45405629)

    While they don't have to be ranked so strictly you're still fighting over table scraps against your own team.
    If everyone surpasses expectations and achieves a good result then everyone deserves to be compensated fairly.

  • by nine-times (778537) <> on Tuesday November 12, 2013 @05:36PM (#45405661) Homepage

    Yeah, if you know you want to lay off 20% of a large workforce, it makes sense to take some metrics-- including some subjective evaluation-- and develop a ranking of employees from "extremely valuable" to "a drain on company resources", and then cut the bottom 20%. Do that as a one-time thing, or even do a couple rounds in relatively short succession. That could work.

    But if you make it part of the company culture, you're going to end up with a company of paranoid back-stabbers.

  • by photo pilot (3425097) on Tuesday November 12, 2013 @05:37PM (#45405695)
    This makes everything a zero-sum game. I cannot get ahead without making sure you do not. Wrecking two other people's servers beats making mine better.
  • by lgw (121541) on Tuesday November 12, 2013 @05:38PM (#45405699) Journal

    And yet both companies will have the same outcome - continuing their long decline into irrelevant mediocrity.

    Somehow despite geek opinions, Microsoft's revenue keeps going up. Yahoo is starting to look up as well, though how much of that is Alibaba is hard to say.

    All industries eventually mature. Being on top of a mature industry is a good place to be, as long as you occasionally shake things up enough to stay on top.

    Maybe both companies should consider looking a little further up the management chain to discover what truly ails them.

    You mean like getting a new CEO, which Yahoo did and MS is doing?

  • by lgw (121541) on Tuesday November 12, 2013 @05:45PM (#45405791) Journal

    A bell curve for employees works well across a large enough pool. Given 5 people, it's silly. Given 500 people, you're going to have a bell curve of actual performance. That's not the problem with stack ranking,

    It's firing the bottom x% every year that gets you into trouble. The first time you do it, it's probably for the best, but after that if you need to fire that many people you should probably get better at hiring.

  • moi? bitter? (Score:5, Insightful)

    by Thud457 (234763) on Tuesday November 12, 2013 @05:48PM (#45405839) Homepage Journal
    stupid HR fucks don't understand simple statistics.

    Of course these are the same morons that want to play keyword bingo with your resume, think everybody in a 200,000 person company needs ethics training to make up for the moral deficiencies of the executives in the boardroom and want 5 years of experience with some technology that's only been around for 2.
  • by janoc (699997) on Tuesday November 12, 2013 @06:10PM (#45406101)

    Someone wrote that grading on a curve works in academia but not in industry. Why should it work for grading exams when it doesn't for ranking the workers? Especially the academics that are using it should know better.

    Grading on a curve (or the MS stack ranking, which is the same) is one of the most unfair and vile ranking/grading systems invented. Why? Because your actual skills don't matter. What matters is how many better (or worse) colleagues you have. If you have are in a large team (or class) of good performers, you are screwed, even if you are good - someone will be given the short end of the stick only because there are only so many "good marks" available. An extreme example are students "hacking" their exams by handing in blank sheets. Even if they all (or sufficiently many) do that, with curve grading they are guaranteed some 75% chance that they will pass - by doing nothing, because only the low 15-20% fails. Shouldn't we be marking their skills and knowledge instead?

    This system also demotivates the good learners/workers - what is the point of trying to work hard, when you will not get that good mark only because there is only a limited amount given out and simply too many comparably good candidates. Essentially the system forces (undeserved) bad marks on people even though they performed equally well as the best ones. This sort of thing does wonders for morale.

    Finally, the second fallacy why this is fundamentally broken is the assumption that the skill distribution in a work team or class is normal (follows a bell curve). There is absolutely no guarantee of that, because, heck, you aren't hiring the idiots, are you? I am sure that the company is hiring only "rock star" developers. Same with the students - they have to pass stringent exams and fulfill admission criteria that the majority of the population isn't able. So you have a sample here that isn't representative of the entire population (where the bell curve would be valid) and all bets are off, because the system was built on an invalid assumption. The most extreme example of this is the constant distribution - the case when all students turn in blank sheet of paper (identical "skill" level) for their exam and still pass. You would have to pick the students or hire employees randomly out of the entire population if you wanted to have a normal distribution of skill. Not very practical, though.

    To conclude, if you are responsible for examining students or for evaluating employees, for the grace of God, stop using relative ranking schemes like this. Comparing people to each other is certainly easier than to evaluate their "absolute" skill, but it isn't fair, doesn't represent what you think it does and it creates a toxic environment for everyone.

  • by sjbe (173966) on Tuesday November 12, 2013 @06:21PM (#45406223)

    If you have to fire someone it can only mean one of two things. Either you didn't train the person well enough or you hired the wrong person. If you abstract what is going on enough all firings ultimately fall into one of those two categories, both of which are a ultimately the responsibility of management. This is why stack ranking is a bad idea. If you didn't train the person well enough then improve your training program. If the person was the wrong person for the job (insufficient work ethic, incompetent, unethical etc) then improve your recruiting program. Stack ranking treats the symptom instead of the disease. It takes emphasis away from focusing on hiring the right people and training them well.

    No company will get every hire right (some people just aren't what they seem to be) but creating a culture where everyone is playing a game of "devil take the hindmost" will get people to worry less about getting the right person because if they are wrong they won't last. Hiring someone only to break them off later means someone made a very expensive mistake.

  • Re:Lots do it (Score:2, Insightful)

    by Anonymous Coward on Tuesday November 12, 2013 @06:39PM (#45406407)

    Abercrombie was my first thought. (Screw Fitch, he just messes up the end letter match.) I dismissed it quickly.

    Accenture was my second. This would be entirely possible. I've worked for ex-Accenture VP's, and they're pretty cutthroat. But then it came to me...

    Apple. That's the one. The word "cult" should've tipped us all off.

  • Re:Attrition (Score:5, Insightful)

    by gnasher719 (869701) on Tuesday November 12, 2013 @07:11PM (#45406705)

    A) It fosters competition, which should also foster a better product (I don't actually agree this is the case, though)

    Where I work, if someone else is good at their job, that's good for me, because it makes my job easier. With stack ranking, if someone else is good at their job, I'd have to try hard to make them look bad without them noticing, so that I look relatively better. Where I work, I'd help somone getting their job done so we get a better product. With stack ranking, as long as it looks like their fault if the product is shit, I'm Ok.

  • by Alomex (148003) on Tuesday November 12, 2013 @11:15PM (#45408739) Homepage

    If the person was the wrong person for the job then improve your recruiting program.

    Spoken like a true noob that never had to hire anyone. Hiring is imperfect even under the best of circumstances. You don't believe me? the best hiring process known to man, which takes several years of assessments, relies in numerous tests, and candidates are chosen by a dedicated committee of experts whose compensation is directly tied to performance often results in disastrous hires. It is called the sports draft and every year there are plenty of draft busts in all sports. If those people with (comparatively) unlimited resources still make mistakes, what hope does a company have on a one day interview? Bad people will be hired, that is a fact of life.

How can you do 'New Math' problems with an 'Old Math' mind? -- Charles Schulz