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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?

#41

Post by gknoy »

anonymous wrote: post #36

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…

How visible and gameable are the metrics, though? You'd have to ensure your metrics were better than some, worse than others, but NOT so much worse as to be dangerous.

Also, that sounds like a horrible amount of concerns for a developer. I'd like to build and ship code, not worry about measuring performance.

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

#42

Post by xal »

kvb wrote: post #21
yuhong wrote: post #3

Earlier quoted context omitted.

I think michaelochurch advocated open allocation.

How does open allocation address performance evaluation/compensation? Doesn't Valve have both open allocation and stack ranking?

Valve does stack ranking == compensation and they very much have a hirachy, it's just not documented. It's called the Tyranny of Structurelessness: http://beautifultrouble.org/principle/beware-the-tyranny-of-...

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

#43

Post by tolmasky »

duaneb wrote: post #22
CamperBob2 wrote: post #10

Earlier quoted context omitted.

I wonder if you could fix that by exempting employees from individual ranking if they work in groups smaller than n , and then rank those groups as if they were individual contributors. That way, a mid-level manager with five groups of five people would have to cut the least promising group loose. ... Nah, still sounds like a stupid idea. Any ranking system where an individual's outcome depends on their number of col…

> Any ranking system where an individual's outcome depends on their number of colleagues is bafflingly broken. From the perspective of the company, it's not as clear how this approach is broken. Assumably promotions, hirings, and firings should be based on the current needs of the company, not what's fair to the employees or some ideological vision. I'm pretty sure attempting to apply any one method for evaluating so…

The critique is not in relation to fairness to employees but rather the reality that there doesn't always have to be such a distribution of performance. Sometimes most people are excelling, similarly, sometimes you may need to fire FIFTY percent of the workforce. You should judge people on a measurement that's not purely comparative to other employees. If every single employee steals from the company, that doesn't mean that the one who stole the least amount of things is "exceptional".

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

#44

Post by JoeAltmaier »

Metrop0218 wrote: post #35
varunsrin wrote: post #26

Earlier quoted context omitted.

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.

You don't get anything like 'normal' without scores of samples. Any small (<50?) group is going to deviate significantly. Which means stacking is abusive to somebody.

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

#45

Post by JoeAltmaier »

Metrop0218 wrote: post #34
bowlofpetunias wrote: post #27

Earlier quoted context omitted.

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.

hiring/firing/raises can be done in small groups by their managers. What's crazy about that?

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

#46

Post by crazcarl »

Metrop0218 wrote: post #35
varunsrin wrote: post #26

Earlier quoted context omitted.

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.

How do you know the data becomes more normal as your add more people? Especially if you are performing the rankings independently on each individual.

If you feel like your company is hiring against a certain set of high standards, are your employees at the low end of the 'normalized' curve holding you back as much as the people at the high end are pushing you forward?

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

#47

Post by yajoe »

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.

Completely agree, and I didn't know this practice had spread so widely. While doing the HR-sanctioned stack ranking requires X > MIN_POP_SIZE, in practice each line manager (i.e. lead) provides a pre-sorted list up the chain for merge-sorting. That way the line managers minimize the number of arguments during the official org-wide stack ranking. Many managers have gotten good at balancing their teams with high and low performers so they come "pre-sorted" as the lingo goes. If you don't believe me, ask about "pre-sorting." The fact your manager recognizes the term should be telling... Remember, managers get graded on how well they appear to their peers in stack ranking. It's ok as a manager to have low performers so long as you are "managing them." Managers have a disincentive to overrepresent their team to their peers, and managers are perfectly fine pre-sorting their lists. Again, it's easier and better for them to do so.

The unofficial pre-sorting when X It's clear that the primary effect of stack ranking is to induce churn in the org at the expense of loyalty and morale. The people making the decisions are smart, so I presume the effect is part of the strategy. My theory? Software development isn't as skilled as we like to think it is, and it's often cheaper to hire a young kid and pay a "high" entry-level salary with vested bonuses than invest in long-term employees. Think about all the unvested money that the company saves by pushing employees out before 4 and 5 year maturity cycles. Plus, actual senior engineers (not the title!) tend to say "no" more often to clueless middle management and create unnecessary headaches.

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

#48

Post by jellicle »

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…

Managers have a bias to like and want to keep "their" employees, because they know them, because they are friends with them.

Even if Steve is objectively a poor performer, you know him; you met his wife; you saw pictures of his kids. He's a nice guy.

If you fire him, you either don't get a replacement (bad) or you have to interview 20 people to find a replacement (also bad). It's hard to hire - what if you choose poorly the first time and have to do it yet again? Easier to keep Steve.

Corporate problem: figure out a way to get rid of some of the Steves without making life too difficult for everyone else. Go!

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

#49

Post by Nomez »

mseebach wrote: post #29
lifeformed wrote: post #12

My impression that these types of systems are more for culling than accurate performance review. Perhaps they need to drop a certain percentage of employees by some target date, and this is the most blame-free way to do it on a large scale.

That's not an accurate impression. Microsoft has grown their staff steadily while employing this policy.

All that means is that they are hiring more than they are firing.

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

#50

Post by jrochkind1 »

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.

In fact, with Amazon it seems they are not, that's probably what Molly Graham meant when she wrote:

> Facebook has seven performance assessments as well as a guideline for what % of employees should be at each level, however it is explicitly not a forced curve, particularly for small teams.

I think the author completely missed the point of the original criticism they were responding to -- the criticism was very specifically about the specifically required distributions in each category, within each team.

The author of OP, on the other hand, seems to just be making the case that there are reasons to rate some people high and others low, and all the tech giants do it! That's the proverbial straw man.

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