One major thing I learned from 360 reviews is how bad developers are at judging each other or their manager.<p>I've had employees on probation for lack of productivity judged as excellent by their peers because of their ability to socialize their "abilities". I had the best developer on my team (a 10x developer if ever there was one) get slammed on technical ability rankings because of his prickly personality.<p>My VP and I used have quite the chuckle at all my "strengths" identified by my team and peers ... because they liked me and I was effective they attributed positive characteristics to me that I did not have.
This was seemingly inevitable whether this is actually useful or not. Microsoft has been getting increasing heat about our stack ranking system, both from employees and from external people.<p>But I don't think stack ranking is our problem. I think our problem is that we value this notion of the brilliant and excellent individual contributor instead of valuing employees that value teamwork and team problem solving. I suspect this is an institutional problem, having been started by exactly that sort of person.<p>It's <i>this</i> that causes the backstabbing and the mess that people attribute to "stack ranking". Until we put value in changing this culture, I don't see too much changing.<p>(Disclaimer: my team at Microsoft is sort of odd - we're not in Redmond, and I don't see a lot of this backstabbing that is oft-reported. I <i>do</i> see our managers overvaluing the brilliant IC and I <i>do</i> see my organization undervaluing teamwork, but at least we're not doing that stupid game playing like joining weak teams to get great reviews.)
This sounds pretty good to me. If they actually implement what they wrote about here, I think Microsoft could become one of the better big companies to work at.<p>(I have a friend who works at BofA. They wanted him to take on a new project that he wasn't interested in. As a reward for agreeing, they went back to his old performance reviews and changed them from "Meets expectations" to "Exceeds expectations" and then promoted him for excellent performance. LOL.)
This is good to see. The whole premise of stack ranking is fundamentally flawed.<p>Clearly there is a curve that when applied to an entire population shows that there are under-performers. So far, so good, however, the problem is that stack ranking isn't applied to the entire population since it's impossible to normalize the performance of each individual. Instead, companies that stack rank do it on a team-by-team basis, which is a statistically inaccurate sample of the population where there can be a lot of skew.<p>Since it's up to the manager to rank their employees, this causes a lot of problems. This is particularly a problem if the manager sucks at hiring, or over hires for their team, and there is a lot of chaff. There is a massive incentive to do this, because the more employees a manager has, the more corresponding perceived worth in the organization they'll have. Plus, if it comes time to cull, it's really easy to shield the favourite employees, even if they have performed poorly, without disrupting the organization.<p>On the flip side, if you're really, really careful about who you bring on board, your team is in a weaker position because there is no one to terminate. This means you get rid of good performers based on bullshit metrics. I saw this happen at a largish virtualization company where one of the best employees on our team was let go because he had some minor HR-ish type issue. This caused a big percentage of the team to be demoralized and ultimately leave.
<i>We will continue to invest in a generous rewards budget, but there will no longer be a pre-determined targeted distribution. 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.</i><p>Is this not in effect the same as a curve? Giving higher bonuses to one person means giving lower bonuses to another. Giving everyone the same bonus discourages high performers from staying (and also working on the same team). People who receive little to no bonuses take the hint to leave, just as if they had received a 4 or a 5. Considering only 10% of employees receive a 4, and 5% receive a 5, I'm thinking that effectively, there has been no change.
Stack ranking is created by management's inherent inability to trust people.<p>And that, in turn, is created by management's inability to trust in their own abilities. This is proved to be true in case of Ballmer and overall Microsoft's performance while under his leadership.<p>These changes are surely a positive sign for Microsoft.
I saw the downfall of stack ranking immediately after a company I worked at was acquired by Microsoft. The workplace changed within a month from one focused on teamwork and support to Lord of the Flies. When the only way you can succeed is by being "better" then someone else you are forced to step upon others.<p>I believe that this is also the effect of working for a public company with a stock that hasn't moved in price in 10 years.
Interesting timing given the article and discussion yesterday [1] about other companies using stack ranking. I wonder (and to some extent hope) that the others follow suit.<p>[1]: <a href="https://news.ycombinator.com/item?id=6712717" rel="nofollow">https://news.ycombinator.com/item?id=6712717</a>
This is absolutely great for Microsoft and its employees. Grade by curve creates internal friction that is harmful to the team. I am a manager in a large company. I always suggested to grade by performance against job level. There is written requirement for each job level, it is relatively easy to measure against the written description by both managers and peers. Everyone has incentive to get salary raise, bigger bonus, promotion. There is no need to use internal competition to add more pressure.<p>On the other hand, the lower 5% people only cost about 2% of companies spending. It is not even worth to worry about it. You need to interview equivalent to 50% of employee count to replace that 5%, plus whole set of HR bandwidth to handle it. Microsoft has been losing a lot of value to fire lower 5% while keep a lower 5% CEO at the top for so many years.
I wasn't aware that US companies ranked employees and used rankings when purging the workforce (when I think about it it's a pretty obvious idea). In countries with stronger labour laws "underperformance" basically isn't a reason to fire someone. The employer is responsible for the employees performance (training etc.). This can be frustrating in the software business when just a few really poor performers can really sink a team. Obviously forming a really elite team in the US is easy, since you can purge from the bottom, provided you don't affect morale too negatively. But how do you do it in countries where firing for underperformance isn't an option? It's really hard to get away from a bell-curve team.
Now that they get rid of it, I wonder if they're going to run into problems on the other extreme...<p>- Difficulty knowing who the best employees are.<p>- Employees surprised by layoffs. "I thought I was doing well."<p>- Managers slacking on giving constructive feedback.<p>Performance management is such a tough subject. Both extremes (ruthless stacking, and no-curve) have issues and I don't know a better solution.
>We will continue to invest in a generous rewards budget, but there will no longer be a pre-determined targeted distribution. 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.<p>The compensation budget is the key part here. I don't know how this is going to account for:<p>- Failed products with smart developers and their retention.
- Avg products with very smart developers
- Less 'visible' projects. Those that management don't realize is necessary until you have no one working on it. (This happens a LOT in big companies).<p>All this can be solved by pumping a ton of money into this as they are alluding elsewhere though.<p>Overall the fact that they are taking feedback seriously and are working towards a solution is pretty positive though.
An interesting read related to the topic -- Sinovsky on performance evaluation and large orgs:<p><a href="http://blog.learningbyshipping.com/2013/11/09/realities-of-performance-appraisal/" rel="nofollow">http://blog.learningbyshipping.com/2013/11/09/realities-of-p...</a>
I'm a big fan of Dale Carnegie, <a href="http://en.wikipedia.org/wiki/How_to_Win_Friends_and_Influence_People" rel="nofollow">http://en.wikipedia.org/wiki/How_to_Win_Friends_and_Influenc...</a>.<p>But, I think that leadership/true emotional control means that, even if someone is treating you wrongly or criticizing you, you can dissect the behavior, and then appeal to reason.<p>For example, I appreciate, and even invite, ruthless criticism ("go ahead and insult me if necessary") when getting feedback (on my code, performance, etc.)<p>The importance of having friends who can say, "you're an idiot - you don't understand X, Y, Z" is high.<p>Sometimes I dislike when, at previous jobs, I've had to mask the truth simply to avoid hurting someone's feelings. Because, if you hurt someone's feelings, that person will close up to you.
It's nice that now they are going to value teamwork and collaboration more highly, but I don't see the lack of a curve making much of a difference in compensation level for the average contributor. The total size of the compensation budget is fixed, and they have to spend all of it.<p>Just because now 30% of the staff can fall into the Exceed Expectations bucket doesn't necessarily mean that the budget increases. The money gets divided differently, that's all.<p>It does seem like a positive change though if they can improve the culture of the workplace and minimize the amount of backstabbing, cronyism and political nonsense.
This is a great move for the company. Especially now that so many competitors have internalized the process. It was the single most identifiable thing that poisoned the culture at the company. It will be interesting to see what they replace it with. The process certainly made it easier to make decisions higher up the chain (even if it was difficult for the managers and their direct reports).
This is interesting in the context of <a href="https://news.ycombinator.com/item?id=6712717" rel="nofollow">https://news.ycombinator.com/item?id=6712717</a> "Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?" - the feature copying usually goes the other way.
i hope this will curb people from constant backstabbing that I witnessed during my short duration there. It was painful to watch very smart, bright people indulge in really pathetic behavior consciously to 'protect' themselves..
I kinda like what my employer does. There is a 1-5 ranking, but the distribution/buckets for bonus is determined after the reviews are complete. Of course, the concern here is that management "can" slot the buckets in a way that suits them, but I trust them enough to not do that..
Due to this, no one knows "what needs to happen to get X bonus".. everyone is just trying to do their best to get to the highest score and the amount of cash you get depends on what bucket you fall under
Best way is to do away with review and go with equal profit sharing instead. You don't even need to worry about levels/title, just call everyone a Vice President.
If I remember correctly, they promised that before, and all that came out was that "the curve" was still there, but hidden from sight and under a different name.
I'm glad this happened. It was a completely necessary move. I hope it's not just a surface change while they twist things to keep it all going. Backstabbing and not collaborating to ensure you're not the one at the bottom of the curve is no way to work. And having to worry about and deal with backstabbers everyday quickly leads to a toxic work environment. Good riddance.
This is going to open the floodgates of deadwood. Stackranking at least forces hard choices. They just needed to adjust the curve by team performance. E.g. rockstar teams have more exceeds than underperforms and a failing team has more underperforms than exceeds. Under the most recent system the best way to get a review is to be an A player on the B team.
Good for them. I don't like Microsoft but I like to see any company getting smarter. It's hard enough as it is to find and keep good people. And there are pretty obvious alternate ways to identify and expel "dead wood" if that was their original justification for stack ranking.
The last bullet point strikes me as incredibly odd. No ratings? How will managers determine raises and bonuses if they don't have a rating to determine whether the employee is meeting expectations or not?
Looks like the process will be more peer driven. There'll probably still be ranking to find the top performers rather than weed out the bottom 10, which is good.