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BLOG: Microsoft pulls rank -- and makes its smartest move in years

Robert X. Cringely | Nov. 14, 2013
Microsoft ditches stack ranking in employee reviews, but Machiavellian system reigns at Yahoo, Google, and Facebook

(Do you think one of reasons Microsoft keeps screwing the pooch is because its top managers don't know how many hours are in a day? Or because they spend too much time reading HR handbooks for other tech companies? Sorry, it's that digression bug again, I can't seem to shake it.)

Obasanjo's other big insight: "The bottom line is that performance appraisal systems at large companies always suck."

(You know who else grades employees on curves? Hooters. Ba-dum-bump. Thank you, I'll be here all week.)

Game of drones
The unintended consequence of ranking all employees in a department: Your best performers will do what it takes to isolate themselves from other top players, so they get to stand at the front of the line when it's bonus/reward/ego-stroking time. And if anyone in your department looks like he or she may be moving up to the front of the line, others in the same department will do whatever they can to sabotage them. It's like "Game of Thrones" without the medieval costumes or Peter Dinklage.

That's the conclusion of Vanity Fair writer Kurt Eichenwald, who wrote an eviscerating profile of Microsoft and its fearless leader for the glossy magazine's August 2012 issue. Slate's Will Oremus summarizes the key bits:

At the center of the cultural problems was a management system called "stack ranking." ... For that reason, executives said, a lot of Microsoft superstars did everything they could to avoid working alongside other top-notch developers, out of fear that they would be hurt in the rankings....

"The behavior this engenders, people do everything they can to stay out of the bottom bucket," one Microsoft engineer said. "People responsible for features will openly sabotage other people's efforts. One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn't get ahead of me on the rankings."

That, I think, is the most plausible explanation yet for why Microsoft keeps intercoursing the canine with almost every product release.

If you're casting a movie about gangsters, you want Pacino and DeNiro in the same scenes. If you're putting together a championship hoops squad, both LeBron and D-wade need to touch the ball. Likewise, if you're trying to build world- class products, you want your supergeeks working together, not competing against each other. So it sounds like Microsoft is, finally, on the right track by ditching its ranking system.

The question: Why does anyone else want to emulate this? The answer seems to be because they don't know how to do anything else. But it doesn't bode well for the futures of Yahoo, Google, Facebook, and the rest.


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