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Microsoft Kills Stack Ranking 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 ArcadeMan ( 2766669 ) on Tuesday November 12, 2013 @04:53PM (#45405119)
    Maybe Microsoft will be able to re-invent a better version of itself.
  • 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 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).

      • 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.

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

          And what is the problem with that?" asks Larry Ellison.

        • by Anonymous Coward on Tuesday November 12, 2013 @05:58PM (#45405979)
          I work for a government-owned, contractor-operated lab where we are ranked 1..N, and it's not all that destructive. Why? Because there have been no significant raises in years! So, staff and management wastes months on performance reviews, then the results are put on file and never looked at. The end.
          • My understanding is that at Microsoft, the bonuses are largest for rank 1, slightly smaller for rank 2, etc... and the bottom of the list get kicked out.

            It doesn't matter if your ten person department has people with IQs from 180 to 189, the person with 180 is going to lose their job unless they game the system to rank ahead of a colleague. (Might be fun to watch a group of super geniuses outwit each other, though.)

            I don't know that I'm skilled enough to make it through Microsoft's hiring process,
        • by mikael ( 484 )

          Was it Dilbert PHB's or the BOFH who announced "Weekly redundancy notices will continue to be issued until employee moral improves".

        • by Copid ( 137416 )
          That's definitely better than the "every department cuts a fixed percentage of their workforce" nonsense that a lot of companies do. I've always thought that the best way to go would be to do a ranking and cut the bottom X% and give the top Y% cash bonuses in the very same swoop. Layoffs have a way of shaking people up, and your best people can easily find another job if they decide they don't like to live with uncertainty.

          Give them a pat on the back and a bonus offer the same day you're laying people
    • 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 dido ( 9125 )

        True, Microsoft's revenue keeps going up, but that doesn't mean anything. They are no longer supreme dictator of the tech world, able to control the industry at their whim, as they were in the glory days of the nineties and early 2000s. I remember a time when the industry jumped at every word Microsoft said, when the mere thought that they were getting into something was enough to make the faint of heart pull out to avoid competing with them head-on. No more. They're about as relevant and dangerous to the l

        • by lgw ( 121541 )

          Well, I think Office is here to stay, if you include the cloud-based office. But I don't see it growing, except as a result of "technically literate world population growth". But that in and of itself isn't really a problem. Look at United Technologies, which most geeks have never heard of but is arguably the world's oldest tech giant, and still doing fine: at a certain point of maturity, cash cows are forever (assuming your business stays internally healthy).

          I guess it's the difference between "relevan

          • by dido ( 9125 )

            Cash cows are forever? Hardly. Tell that to buggy whip manufacturers at the advent of the automobile, or more to the point, tell that to IBM's Mainframe Division in 1978. All cash cows will eventually die as they fall out of relevance, and cash cows in the computer industry have a far shorter lifetime than they do in other industries as the computer industry moves far more swiftly.

            True, MS's cash cows probably still have a few more decades of life in them yet, but Microsoft is at least smart enough not to r

  • 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.

    • 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 girlintraining ( 1395911 ) on Tuesday November 12, 2013 @06:20PM (#45406213)

          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.

          That's not a problem when done correctly and appropriately bold-faced. Interview one person and then ask a classroom of 30 to rank that interviewee on traits like extroversion, honesty, confidence, etc., and you'll get a pretty damn accurate assessment. It's called the 'wisdom of the crowds' -- average it all together and bang; Resaonably accurate assessment.

          There's a related example; Chicken sexing. Keep your mind out of the gutter, this is serious -- as you know, we need eggs. Lots of eggs. So we need a lot of hens. But there's a problem; Male and female chickens look almost identical. We cannot use machines to separate them, so it must be done by humans. But how then, if they're almost identical, do we tell the difference? As it turns out -- we take someone else who's a chicken sorter, stand behind the new guy, and say yes or no repeatedly until the answers are mostly yes. Although we cannot really tell any difference visually, somehow, we can get about a 96% accuracy rate out of humans by simply training them with yes/no answers. It defies all reason, but that's how they do it. And the thing is... the accuracy rate doesn't decrease as they in turn train the next new guy, etc. It remains constant across the population.

          You can't get any more subjective than chicken sex sorting -- really, I could put two of them in your hands and short of dissecting them, you wouldn't be able to find any difference. And yet... you can be trained to become highly accurate at separating these two nearly homogenous groups.

          I guess my point is, your argument is bunk. You can make personal subjective assessment accurate and valid; But you need to either do it with a group of people doing the assessment (many to one), or you need to be trained on how to identify key traits. You're absolutely right in that without formal and explicit training, human beings are about as accurate as a randomly wired neural network. But with training, it's a whole 'nother story.

          You can be trained to be very accurate in those "subjective" assessments. It just happens to be the case that the overwhelming majority of people aren't.

      • Re: (Score:3, Interesting)

        by Anonymous Coward

        The math department of the University of Waterloo had a dean who literally wrote the textbook for statistics. And he made it department policy to not allow bell curves in any grading in any math course. A bell curve is one model of behavior, and it can occur naturally. But when it does not occur, making data fit a bell curve is throwing away the actual data and replacing it with information that meets your expectations. If a class or team has a bifurcated distribution, or a strange skew from expected values

      • Bell curves "work" in academic settings because there's hardly any accountability imposed upon tenured professors for how they evaluate students. It's continually shown how grades (as of right now) are a poor predictor of success in the outside world, yet this continues to be ignored in the practical sense in academia.
        • by vux984 ( 928602 )

          Bell curves "work" in academic settings because there's hardly any accountability imposed upon tenured professors for how they evaluate students

          Bell curves in an academic settings work because they are are fitting the test to the students not the other way around.

          The premise is that the student distribution is more likely to be stable than then difficulty course over time.

          Suppose two Calculus 101 classes of 200 students each go through a university with two different profs, teaching assistants, and tests. A

      • by sootman ( 158191 )

        > That's entirely ignoring the fact that any statistical method
        > using a population size of five is utterly meaningless.

        Not true. Once, I flipped a coin five times, and I got 2 heads, 2 tails, and the last time it landed on the edge.

    • Re: (Score:3, Insightful)

      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 @05:45PM (#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.

      • I never had any math professors grade on a curve. They said we could all get As or all fail but the sample size wasn't large enough to justify any sort of curve.
        Of course, most managers probably didn't take enough math classes to learn to think logically.
      • Or investing in better training/management programs.
    • 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 Copid ( 137416 )
        At my last company, we had scores in a bunch of areas (the typical "communications" "technical skills" etc.) and during the training on the web-based tool I noticed that it produced a final floating point average of those scores at the bottom.

        Me: "So are those numbers just useful for us as managers to discuss where the employee is relative to everybody else, or are they used for something?"
        HR: "No, your ranking and your salary are based on that number."
        Me: "How are the different categories weighted?
    • by fermion ( 181285 )
      In theory, if the job market is mobile and there is funding to hire and train new people all the time, this is not a horrible rational. The attrition of the bottom 25% assures that everyone has to be at their best all the time, and those who just want to slack get left behind. There is a new set of graduates every year, experienced people who want a lateral move, and internal promotions. This is, in fact, what some in public education propose as a way to improve the teaching pool. Any large organizatio
    • by talexb ( 223672 )

      Yeah, and guess what happens to the person ranked terrible? Here's one of the replies:

      • They gave me nothing to work on at the end, things they knew I couldn't do while others couldn't do them either. I had automation skills while another couple of people did not. They still got rid of me after rigging my performance review twice in a row while discrediting me for my accomplishments. It was so incredibly obvious and demoralizing. Meanwhile they replace you with a fresh college grad ONLY. If you looked at the
  • 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.
    • Re:Hmmm interesting (Score:4, Interesting)

      by gtall ( 79522 ) on Tuesday November 12, 2013 @05:20PM (#45405451)

      I think in the beginning, there were plenty of employees that got rich off stock options. However, to my eye, management and stockholders got greedy. Management also considered themselves techno-stars when in reality, technology had passed them by and they never got the memo. Considering themselves techno-stars, many lessor employees must be techno-weenies and hence stack ranking was born.

      The only poetic justice was that Ballmer was stack-ranked as a non-performing asset and deemed expendable. They should have sacked Gates, he's the one who gave MS their sclerotic management culture, but he bailed before them chickens came home to roost.

  • by Anonymous Coward on Tuesday November 12, 2013 @05:08PM (#45405311)

    You are a shitty manager if you need to resort to "stack ranking" or whatever.

    1. Your recruitment policies suck - that's a given for all of IT/Development/Software - industry - if you can't find qualified people, it's YOUR fault. If you do find "qualified" people and you still fail - look in the mirror.

    2. If they get hired and fail, then WTF is the problem? Unrealistic deadlines? Changing scope? Death marches?

    3. Every problem is management's fault. Period. End of story.

    Don't get me started on the idiocy of Silicon Valley: Kids, don't work there. They are milking the reputation of true innovators like the Dave Packard (Business guy) and Bill Hewlett.(engineer) - today, they are a bunch of marketing phony assholes and cunts - looking at your camel toe Ms Mayer .

    Silicone valley is for posers. Pass the word.

    • by Shados ( 741919 )

      I'm confused about #1, unless you include "decided to make an office in an area where tech people like to be....and everyone else did the same thing" as being your fault, but then what else can you do...

      There's limited amount of qualified individuals in any given region, and you have the choice between opening office in the middle of nowhere (and actually having a shortage of good people), or open office in SF/SJ, Boston or NYC, and compete for good people with everyone else.

      It IS hard to find them, no matt

      • by dave562 ( 969951 )

        +1 to the points above. I work in IT operations for a moderate sized corporation (~3500 employees) and we struggle to find qualified talent. We pay well (~$85-90k for a mid-level sysadmin position), have good benefits, regular bonuses and yearly raises. The practice I work for is a technology / IT centric practice where IT is a core component of the business model. That means that we do not have to fight for resources and get to invest in good technologies like auto-tiering storage, massive virtual infr

      • Microsoft pays relocation bills pretty much in full, even when it's overseas. They pay for the tickets and for the move, obviously (full service - bunch of guys show up at your place and package everything you point your finger at, load it off, and you get to tell when & where you want it delivered and unpacked once you arrive). They also pay for the first month of rent, and provide a rental car for the first two months (or at least that was the norm back when I was hired). For foreigners they also pay

    • First of all.. the first line managers do not decide these kind of ranking systems. The upper-levels and HR execs do. The best managers try to work AROUND the system they are forced to live in.

      Second, stack ranking is not common in silicon valley companies at all. It is old-school large companies like GE, Microsoft, Accenture, IBM, etc. that employ it.

  • by Anonymous Coward

    My ex-employer KPN (Netherlands) also does (did?) this; each manager was telling it just had to be in any group of at least 8 employees, and would then show a Gauss curve to prove it ... I'm happy I'm not there anymore.

  • by Grumpinuts ( 1272216 ) on Tuesday November 12, 2013 @05:21PM (#45405475)
    ...Yesterday's Solutions Tomorrow.
  • by idontgno ( 624372 ) on Tuesday November 12, 2013 @05:24PM (#45405515) Journal
    "I don't have to outrun the bear; I only have to outrun you."
    • by rwyoder ( 759998 )

      "I don't have to outrun the bear; I only have to outrun you."

      You don't even need to outrun your peer if you just deliberately trip him.
      From what I've read of M$'s stack-ranking, this is how it works in practice.

    • by CBravo ( 35450 )
      The analogy is quite striking: There is no external goal, with meaning, that they can achieve. Ergo: There is no vision or ambition for the future.
  • It's horrible (Score:4, Interesting)

    by nightsky30 ( 3348843 ) on Tuesday November 12, 2013 @05:29PM (#45405583)
    Lockheed Martin also employed stacked rankings. The local manager had no clue who people were. How can you even rank your employees when you have no idea who they are?!?!? I was called by another coworker's name multiple times. I finally called my manager out on it in front of everyone at a picnic. He didn't confuse me with the other individual after that... There was so much turnover we basically lost a contract due it and having to retrain new people ALL THE TIME. I don't blame those of us who left. Many people busted their asses and did an excellent job, only to be rated average or below because the manager had a certain number of slots to allocate certain rankings. AND THAT'S IF HE KNEW WHO THE FSCK YOU WERE!!!!!!
    • A manager not knowing who you are or what you are doing is a problem, I agree. But even if a software engineering manager read every line of code written by every one of his employees, I don't think it would be generally possible to rank them.

      e.g. Joe was assigned to design and implement Foo last quarter, and did it on time and with good quality. Dave was assigned to design and implement Bar last quarter, and did it on time with good quality. What information would you use to determine whether to rank Joe h

  • Lots do it (Score:4, Interesting)

    by koan ( 80826 ) on Tuesday November 12, 2013 @05:32PM (#45405611)

    I worked at a large corporation whose name started with an A and ends with an E.
    They too had a ranking system, the lowest got sent to a certain team in our general group where they were needled to death over their stats and either quit or accumulated enough "black marks" to get canned.
    When the team rotation came around, the lower ranking people got suicidal, dread is the word of the day, when your name appeared on that "special team" list it was like getting sent to a death camp.

    That person is now tainted and must be shunned.

    I saw good techs go down for not having enough "personality" (flashbacks of *37 pieces of flair* from Office Space) and it was a dismal atmosphere.

    I left that sh*t hole, never got my turn on the death team.
    Frankly every large corporation I have worked for is the same in that they have all the makings of a cult... I mean if they wanted to go that way.

    • I saw good techs go down for not having enough "personality"

      The people who deserve to go down are the ones who included that in a rating. It'd probably make sense for sales or marketing, but techies are supposed to be surly and anti-social. All kidding aside, "doesn't play well with others" is a legitimate black mark, but that's a long way from "not having enough 'personality'". It does go a long way towards explaining that "nameless" company's products though.

  • 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 PPH ( 736903 )

      But if the manager decides everyone did equally well (contributed their own strengths to the team), then they all get the same raise. That seems fair. Except that if the raise pot is known, everyone will grumble if they fall short. And they'll try to figure out who got the big bonus.

      We had a system like this at Boeing. Most managers were to spineless to do anything other than spread the raises around like peanut butter. Then they added a 'retention pot', to reward the top 10% that might otherwise leave. Th

    • I like the system of the company I work at. Did the company meet all its goals? Everybody gets a bonus! Then the management team gets more bonus if they achieved all their goals. Company had a terrible year? Well, sorry, no money for anyone.
  • by Alomex ( 148003 ) on Tuesday November 12, 2013 @05:44PM (#45405785) Homepage

    Stack ranking works great if you use it to get rid of the bottom 1% every year. Surely in a department with 100 people there is at least one hire who didn't turn out great.

    The problem is when it is applied at a 10% threshold. It is not hard after a few hiring/firing rounds to end up with teams of over 10 people all of which are very good, yet stack ranking still demands that you fire the "bottom" perfectly OK person-decile.

    • There is always a lowest 1% or 10%. But that's irrelevant.
      If one of your employees didn't work out, deal with it personally and realize it is a one-off event.
      If 1% (or 5% or 15%) of the people you hire aren't working out, perhaps that's normal or perhaps you aren't hiring well or managing well or matching employee talents to business needs.
      Don't try to let math do your thinking for you (like MS used to and Yahoo is apparently going to start doing).
      • by Alomex ( 148003 )

        Don't try to let math do your thinking for you (like MS used to and Yahoo is apparently going to start doing).

        In a perfect world yes. However sometimes you need strong incentives to have managers do the right thing in a world where time is a finite resource.

        If one of your employees didn't work out, deal with it personally and realize it is a one-off event.

        It is also less demoralizing if the slackers are let go once a year, as part of a transparent process.

    • by Jiro ( 131519 )

      Stack ranking works great if you use it to get rid of the bottom 1% every year. Surely in a department with 100 people there is at least one hire who didn't turn out great.

      Except that if you use it every year, then the one that didn't turn out great was already fired last year. You're really saying that in a department of 100 there are 5, or 10, or 20 who didn't turn out great (depending on how fast your natural turnover is).

      • by Alomex ( 148003 )

        Except that if you use it every year, then the one that didn't turn out great was already fired last year.

        Not really. Most departments have enough turn-around that you will be hiring 5 people a year, every year.

        • by CBravo ( 35450 )
          Yes really. So you fired 5 and hired 5 new ones. Either another few of the 95 remaing are bad too or your new hires are bad. Because next year you are about to fire from that pool.

          Unless you say that 5% of the people turn bad by themselves every year.
          • Well yeah, some of your new hires turn out bad. Other times, your new hires turn out too good, and then you realize that some formerly very influential people should be replaced, because they are hurting your business.

            Either way, a concerted effort at looking at dysfunction in an organization is a good idea. The trick is not to turn said search for dysfunction into a big political fight. People really don't like to fire other people, so it's very easy for large organizations to constantly lose technical qua

    • Stack ranking works great if you use it to get rid of the bottom 1% every year. Surely in a department with 100 people there is at least one hire who didn't turn out great.

      You don't need stack ranking for that. If someone's not doing their job, then it's usually fairly obvious, and manager and/or HR should just take care of that particular person.

      The assumption that N% are bad enough that they should be fired is broken no matter what N is.

  • It sounds like Microsoft used this for too long and caused a lot of infighting and back stabbing in the long run.

    I can understand why Yahoo! wants to try it - new management, and they want to cut the dead weight. Hopefully they do not do it for too long.

  • I'll wait for the first service pack before I install this, thanks.

  • 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.

    • You forgot a few other cases:

      1) this kind of ranking assumes that people's performance never varies.
      In fact, the performance varies along with motivation, because of the work becoming a routine, or personal problems.

      2) stack ranking applied locally means that bad teams may survive because we only remove the N% useless.
      I remember a similar example, where the managers were ordered to reduce the cost of a device by 10% (the device costed more than 1000$).
      So they applied the 10% to all the components of the dev

    • I had a prof in college who explained the whole 'grading on a curve' thing.
      He started his explanation by saying that a good exam would have:
      * several of no-brainer questions to check if everyone had at least done the minimum and give them a warm-up for the real questions
      * several of real questions, to make sure people actually did study, and to produce some differentiation amongst the general population
      * one or two incredibly difficult questions. Questions so tough that most people are NOT expected to
  • Not against each other in the same company but against their peers across all companies. At the end of the year, the bottom 20% gets sent to the Thunderdome. 2 goes in, and hopefully zero comes out.

  • 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.

    • Sometimes the right person you hired goes wrong further down the track for no fault of yours, or theirs for that matter. Shit happens, people change.

  • This was a practice also done at Enron.

    Hey, Steve Balmer is leaving.. Jeff Skilling left Enron just before it imploded...

    Quick, sell your shares now!

  • While I was at Microsoft, at one point my manager instructed me to stop having ideas that were outside my assigned area, because it was making another team member look bad, and this would impact the stack ranking of both the team member and my manager. So I saw up close how stack ranking sucks. Still, if I was still at MSFT today, I would be very concerned that the new system drives even more of the compensation process into closed-door management sessions, along with the horse trading and cronyism that in
  • There was a joke about this I read from somewhere. In Silicon Valley, collaboration means working together to achieve. In Washington DC, collaboration means being shot for treason.

    Make sure your company encourages the former.

  • After all, it is a large enough company that you could make a career out of working there and not get too bored. I think there are some people that are tired of hopping from job to job just to get any advancement may find this appealing. And if the board makes a good pick for CEO, it could get really interesting. There always has been some talent lurking there, they have resources and a real R&D department and if they can cut through the management stagnation, we could see some neat stuff coming from Re

  • I'm afraid I've seen similar systems used elsewhere. The idea is too easy to promote and make a procedure when a company is large and has many layers of management. And the middle management, accustomed to such a system, will fall back into using it with a new name as swiftly as they can. Discarding such an embedded system means essentially replacing the entire hierarchy and especially middle management bureaucracy procedures.

    I'd expect it to return to normal use within a year, once again without the rank a

  • by RubberDogBone ( 851604 ) on Tuesday November 12, 2013 @11:20PM (#45408783)

    The place where I work recently introduced OKRs and Stack Ranking, bragging about how teh awesome it was at great companies like Zynga, so it MUST be teh great idea at a stupid place like ours.

    This was when Zynga was deep in death throes and shedding value like a hairy dog in July sheds hair. For HR, pride. We're like some internet company the executive assistant has heard of! For people who know things about struggling companies, completely laughable.

    We are teh bullshit INC. Let's be like Zynga! Oh yeah!

    We're about to see what the first quarter of OKRs will bring, where, as they say, the trickle down cascade goals (which nobody has bothered to discuss with me at all) are not actually supposed to be reachable. "Because reaching them means you didn't set the bar high enough." Not reaching goals ALSO means you no longer qualify for pass/fail bonuses or promotions so the meager cash kick (typically one third of a regular paycheck; that's right a fraction of, not a multiple of) we get is effectively eliminated. Nobody is going to meet goal any more. But they promise OKR scores are "not to be used" for eval purposes.

    Then what the fuck ARE they for? Shits and giggles? They expect us to believe this bullshit. "Your metrics show... oh you didn't meet any of your goals! Tsk Tsk. You are now on automatic probation!"

    I expect, no, I WANT to be first against the wall when the stack ranking cuts come. Cash me out. Give me my unusable vacation time and some severance and free me from this madhouse. And they damn well won't DO it! They know what I want and won't do it.

    Damn them.

  • by saqmaster ( 522261 ) <[moc.liamtoh] [ta] [uts]> on Wednesday November 13, 2013 @08:49AM (#45411489) Homepage

    ... I used to regularly score 'above average', or in MSFT stack rankings, a 3.5 or 4.0 (the latter was hard to achieve if you weren't the golden-boy - required to balance the team score). This meant I would get a performance based bonus, which was great.

    I made the mistake of pushing for a promotion. I felt that because I was consistently out-performing my role, that I should be promoted. Eventually they promoted me and a few other guys. We got a 'Senior' title. Now comes the problem.

    The promotion only came with a 2% pay rise. The following annual performance review, it was now deemed that I was not exceeding my role (due to the new title), so I only scored a 3.0. This score means 'you met all your objectives'. Unfortunately, at the time, the policy was bonuses were only awarded to those exceeding their job description. I got no bonus. That year, or the following year. It probably left me on average $5k/year out of pocket.

    Moral to the story? Don't be an employee :-)

"I shall expect a chemical cure for psychopathic behavior by 10 A.M. tomorrow, or I'll have your guts for spaghetti." -- a comic panel by Cotham