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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?

#91

Post by yuhong »

hyperpape wrote: post #61
JoeAltmaier wrote: post #45

Earlier quoted context omitted.

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

Managers squabble over the best developers. They fight to transfer their worst developers to each other, and don't let talented developers go work on other projects that interest them. Every group gets the same number of raises, regardless of their performance, or effective developers in poor groups get nothing. Stack ranking sounds like a shitty system, without a doubt. But I don't think you can have a well grounded…

I think this kind of problem is what open allocation is supposed to solve.

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

#92

Post by forkandwait »

calinet6 wrote: post #87

Here's a question to which most people experience revulsion, but must be thought of and answered honestly: Why not give everyone the same bonus based on company performance? Make it collective good. You'll probably think of reasons, like "good people should be rewarded," or "people who do things wrong need to have consequences," but you must realize the alternative is this vile demotivational anti-pattern with even w…

I am currently reading a bunch of the Toyota Way books, Deming, etc. and sometimes I wonder if one of the most basic assumptions in the West is that the individual is the root and the system is a derived thing. This assumption starts, maybe, with Christianity which tells us that we stand alone before God judged on our individual character, not on our wealth or social position. Buddhism, on the other hand, tells us that even our perception of selfhood and autonomy is an illusion to be rooted out and discounted.

To toss out an assumption as fundamental as these would require a huge realignment of all sorts of things -- how we punish and reward, our sense of self worth, who is good and who is bad, etc. So we don't really want to go there.

I think the West could benefit from a swing to the Systems/ Wholeness side of the dichotomy, but I wouldn't want to discount how powerful and what a creative force our individualism has been throughout the last 2000 years.

(EDIT, PS: Deming is the real deal, and the Toyota Way/ Lean books and movement tries to take some of his surface ideas and implement them without challenging their readers in the way Deming wanted to.)

(EDIT, PPS: Toyota / Buddha says "You see a problem? Change the system." Microsoft/ Jesus says "You see a problem? Roast the culpable individuals, reward the virtuous individuals.")

(EDIT, PPPS: Hegel and his philosophical descendants have the best take on the dynamic movement between individual and collective, without discounting either of the two viewpoints.)

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

#93

Post by michaelochurch »

xal wrote: post #42
kvb wrote: post #21

Earlier quoted context omitted.

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-...

Valve "stack ranking" is for bonuses only. In other words, an error that puts you toward the bottom of the stack reduces your payout from a pool of money you were never promised and to which you are not entitled. You get another chance next year to excel and come out on top. Over time, the errors should smooth out.

Microsoft-style stack ranking, on the other hand, completely fucks up your career in the company, even if you were just unlucky. You don't get another chance. This can happen when a company falters (layoffs) but it shouldn't be by-design.

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

#94

Post by macspoofing »

calinet6 wrote: post #87

Here's a question to which most people experience revulsion, but must be thought of and answered honestly: Why not give everyone the same bonus based on company performance? Make it collective good. You'll probably think of reasons, like "good people should be rewarded," or "people who do things wrong need to have consequences," but you must realize the alternative is this vile demotivational anti-pattern with even w…

>Why not give everyone the same bonus based on company performance? Make it collective good.

Company performance is not dependent on the performance of any one single individual. That is, I can be the laziest, most incompetent developer or middle manger, and it would have no bearing on quarterly earning. So if you're using company-wide performance bonuses to stimulate productivity, in a company of thousands of employees, you're doing something wrong. The incentive in that case is for each individual to do as little as possible because why exert yourself if you're just going to get as much as the next guy anyway, and the result is everyone loses. This is a classic "tragedy of the commons" scenario, where the incentive is to be a cheater.

So the idea of rewarding high achievers (carrot) and punishing under-achievers (stick) is a good one. That's what you need to do, and that's how you properly set up the incentives. The problem is that in a company of thousands of employees, creating a ranking system that works perfectly is pretty darn hard, especially since metrics are usually ambiguous and subjective. So you're not going to get it right 100% of the time.

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

#95

Post by forkandwait »

macspoofing wrote: post #94
calinet6 wrote: post #87

Here's a question to which most people experience revulsion, but must be thought of and answered honestly: Why not give everyone the same bonus based on company performance? Make it collective good. You'll probably think of reasons, like "good people should be rewarded," or "people who do things wrong need to have consequences," but you must realize the alternative is this vile demotivational anti-pattern with even w…

>Why not give everyone the same bonus based on company performance? Make it collective good. Company performance is not dependent on the performance of any one single individual. That is, I can be the laziest, most incompetent developer or middle manger, and it would have no bearing on quarterly earning. So if you're using company-wide performance bonuses to stimulate productivity, in a company of thousands of employ…

I wonder if the individual reward versus collective reward approaches have any actual data for their respective sides?

I am pretty sure Toyota gives collective bonuses or not, and they are kicking the shit out of American auto, but I don't really have the background in this to cite data on either side. Maybe someone on HN does?

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

#96

Post by squidi »

calinet6 wrote: post #87

Here's a question to which most people experience revulsion, but must be thought of and answered honestly: Why not give everyone the same bonus based on company performance? Make it collective good. You'll probably think of reasons, like "good people should be rewarded," or "people who do things wrong need to have consequences," but you must realize the alternative is this vile demotivational anti-pattern with even w…

> Why not give everyone the same bonus based on company performance? Make it collective good.

I wholeheartedly agree. Apart from niche examples, like measuring sale people on sales, there is no good reliable way to measure employees based on performance/outputs. IO Psychologists have been looking at this for years and even mathematicians (like Leonard Mlodinow in The Drunkard's Walk) agree.

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

#97

Post by etler »

boomzilla wrote: post #85
etler wrote: post #74

Earlier quoted context omitted.

I think managers are inherently in a bad place to review the performance of individuals in the team below them. They're primarily affected by the mean performance of the team, so if one guy is slacking off and the rest of the team needs to pick up the slack, the manager might not notice. I think peer reviews will be more honest. If a peer is doing next to nothing, or providing little to the team while everyone else i…

I think it is a lot more complicated that just that. The root cause here is there is no easy way to quantify one's contribution to the company (or even a team) in software development. Some other professions are easier to evaluate, e.g. stock traders have their own P/L, lawyers/doctors have their own customer billings, etc. Note that I said "easier", but not necessarily bullet proof, because it still encourages peopl…

That's definitely the root cause. I'm not saying peer review is the solution, just that if managerial review is the alternative, I think peer review is better.

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

#98

Post by abraxasz »

calinet6 wrote: post #87

Here's a question to which most people experience revulsion, but must be thought of and answered honestly: Why not give everyone the same bonus based on company performance? Make it collective good. You'll probably think of reasons, like "good people should be rewarded," or "people who do things wrong need to have consequences," but you must realize the alternative is this vile demotivational anti-pattern with even w…

I did experience revulsion, but I think that you're right, it's an important concept to think about. I perused the link you provided, and here are some random thoughts:

- The article lists as a deadly sin: "Evaluation by performance, merit rating, or annual review of performance"

But then the question remains: how do you make sure your best employees don't get poached by other companies who are willing to acknowledge the fact that they are superior, and pay them accordingly?

- Another point listed as a deadly sin: "Mobility of management"

I can agree with that, only if we also agree on the fact that management is just an administrative position, like at Fog's Creek or Jane Street. In other words, salaries and positions in the hierarchy are decoupled. If not, then the system you mention doesn't solve the problem of: "how are we going to promote people?"

I admit that I didn't read the entire Deming article, so please correct me if I'm missing something.

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

#99

Post by winslow »

I recall Valve having a stack ranking system as well? I haven't heard anything bad about their ranking system though. Maybe it is different considering the lack of managers with the flat culture that makes it better.

EDIT: Article I found on MS vs Valve stack ranking. http://www.jpuddy.net/2012/stack-ranking-to-gain-team-insigh...

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

#100

Post by fizx »

kybernetikos wrote: post #80
fizx wrote: post #67

Earlier quoted context omitted.

I've wondered if recursively propagating down "bonus points" would be a fair way of solving this. For example, Acme, Inc ranks on a 1-5 scale, and all things being equal, a manager will get (direct reports)x3 points to allocate for his performance reviews. But Acme has a good quarter due to a strong engineering effort, so the CEO decides that Bob, VP of Eng, gets a 4, and he gets to allocate (direct reports)x4 points…

I always wanted to experiment with a system where all employees have a currency that they can pay other developers who help them or that they think are doing really well. As well as the credits that all employees have, there are also large numbers of credits distributed to the product owners of products in proportion to how much money they make. Come bonus time, the bonuses are paid in proportion to how many credits…

c.f. http://blog.bonus.ly/post/33011276149/google-peer-bonus
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