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Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

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Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#31

Post by DerpDerpDerp »

ethomson wrote: post #18
brown9-2 wrote: post #6

The evil, destructive, part of stack ranking is when you need to apply the 20%/70%/10% breakdowns to all teams equally, meaning that even a team of 5 people needs to have one and only one "exceeds expectation" person and one person who "needs improvement", regardless of overall team level. It's not clear from this writeup that Amazon and Facebook are applying curves at such a micro level.

My understanding of my group (which may not apply to all parts of Microsoft, of course) is that our 6-person groups are too small to stack rank, so stack ranking rolls up to the next level. So Microsoft doesn't apply stack ranking at such a micro level either.

My understanding is that they don't /officially/ apply them at such a micro level, but it requires an unusually persuasive manager for the "low ranks" not to be shared around evenly between the people having to rank their workers.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#32

Post by Angostura »

mtrimpe wrote: post #20
xal wrote: post #2

So what's a better way to do it? You need a documented system. If you don't have a documented system then there will be an undocumented system which is the same problem with less documentation.

Each employee receives a single unit of value. Let's call it a 'credit.' Each employee then has to distribute all of his 'credit' to other employees. Each employee then gives away any credit received according to the same original distribution. Each employee continues doing so until the credit received and distributed reaches an equilibrium. Each employee is then ranked by the total amount of 'credit' they've accumul…

Presumably this leads to people passes their credit to the worst candidate, in an effort to stop the good candidates from surpassing their own score.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#33

Post by mseebach »

So, the obvious pathologies of the Microsoft stack ranking model aside, what are the reasons that a company will want to do this?

The main reasons I can think of has to do with the dangers of getting comfortable in a large company.

It's very easy for a lazy manager to just hand out "A"s to everyone on the team and just cruise along. Slackers are poisonous, but painful to deal with for a conflict-shy, comfortable manager. Actually being forced to think critically about which of your employees are the top performance, and which aren't (and it's a mathematical fact that they're not going to be the same) is a useful tool to keep such a manager on his toes.

Another effect is simply to encourage a certain rate of churn in all teams, to get some fresh blood flowing through the system.

Stack-ranking directly forces the manager to use his human capacity for critical thinking to evaluate his employees, and in such is a useful distraction from that even more disastrous evaluation method: Objective metrics (hours worked, lines of code committed, bugs closed, sales numbers etc).

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#34

Post by Metrop0218 »

bowlofpetunias wrote: post #27
xal wrote: post #2

So what's a better way to do it? You need a documented system. If you don't have a documented system then there will be an undocumented system which is the same problem with less documentation.

How about approaching managers in the same way we always like companies to approach developers, i.e., hire good ones and empower them do their job in the best way they know how? Using a system that is enforced from the top down is a perfect way to guarantee you'll only get the kind of below mediocre managers we love to bitch about. All of these systems are based on the assumption that companies can't trust the people…

You need something more quantifiable than that when you're running a giant organization... Your approach would absolutely work in a startup of 20 people or less, but try that in the 10,000+ man Operating Systems Division at Microsoft and you'll run into some crazy logistics problems.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#35

Post by Metrop0218 »

varunsrin wrote: post #26
brown9-2 wrote: post #6

The evil, destructive, part of stack ranking is when you need to apply the 20%/70%/10% breakdowns to all teams equally, meaning that even a team of 5 people needs to have one and only one "exceeds expectation" person and one person who "needs improvement", regardless of overall team level. It's not clear from this writeup that Amazon and Facebook are applying curves at such a micro level.

Stack ranking at Microsoft has a min populaton size (x) - you generally walk up the org chart until the number of employees >= x, and then apply stack ranking to that group.

I think opponents of stack ranking generally overlook this fact. Yes, it's terrible if you have a 5 person team, but the data becomes more normal as you add more people.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#36

Post by anonymous »

I'm more interested in why employees don't band together to game the system and ensure a given outcome, then split the winnings. Like a sort of a pyramid scheme - you and a buddy agree that this quarter it will be you who gets promoted and split the bonus/raise with your buddy. Then you get a third buddy and get him in on it if he agrees to let the second buddy be promoted this quarter. Now you're splitting 3 raises among 2 people. Then you get a fourth buddy in and promote the third one and so on. The system ends once the group has too many people at a high position. At that point any new employee joining the company at a low position is screwed, probably. Also at this point infighting will probably break out from people who don't want to split their raises with the ones with less money, given that they don't have a way of advancing any further. Obviously the only way to win at this is to be the very first person who, after everybody leaves, gets left with the highest position and highest salary. Which is why I called it a pyramid scheme.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#37

Post by mtrimpe »

Angostura wrote: post #32
mtrimpe wrote: post #20

Earlier quoted context omitted.

Each employee receives a single unit of value. Let's call it a 'credit.' Each employee then has to distribute all of his 'credit' to other employees. Each employee then gives away any credit received according to the same original distribution. Each employee continues doing so until the credit received and distributed reaches an equilibrium. Each employee is then ranked by the total amount of 'credit' they've accumul…

Presumably this leads to people passes their credit to the worst candidate, in an effort to stop the good candidates from surpassing their own score.

Do you have any reason to believe this happens in an iterative model as well?

In this model there's no reason to believe the worst candidate isn't passing his credit to employees just about to surpass you, which would defeat the purpose.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#38

Post by cnahr »

It seems to me that stack ranking can only work for companies that are so attractive for new talent that any new hires are likely to be more valuable than the lowest-ranked current employees. Once a company is no longer so attractive, as seems to be the case with Microsoft today, you're actually pushing out better talent in exchange for worse.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#39

Post by xal »

mtrimpe wrote: post #20
xal wrote: post #2

So what's a better way to do it? You need a documented system. If you don't have a documented system then there will be an undocumented system which is the same problem with less documentation.

Each employee receives a single unit of value. Let's call it a 'credit.' Each employee then has to distribute all of his 'credit' to other employees. Each employee then gives away any credit received according to the same original distribution. Each employee continues doing so until the credit received and distributed reaches an equilibrium. Each employee is then ranked by the total amount of 'credit' they've accumul…

So the funny thing is that this system is called Unicorn and has been in effect for many years at Shopify: http://www.fastcompany.com/1770955/using-social-media-improv...

It's useful, but no replacement for performance reviews.

Re: Why are Amazon, Facebook and Yahoo copying Microsoft's stack ranking system?

#40

Post by jacalata »

vkou wrote: post #5
xal wrote: post #2

So what's a better way to do it? You need a documented system. If you don't have a documented system then there will be an undocumented system which is the same problem with less documentation.

A peer review-driven process. Productivity lost to that can't possibly be worse then the culture of backstabbing that stackrank promotes. For another point, the article seems to be making a heavy statistical error in assuming that Google's average developer lifespan is 1 year. Taking the average lifespan biases the result heavily towards new hires (Of which there are a lot of). A more relevant metric would be average…

Doesn't seem like an important error to me. His point is that most Google employees haven't spent long enough there to be affected by multiple rounds of stack ranking/attempts to get promoted, and there being a hell of a lot of new hires is exactly why that's true.
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