Microsoft does away with stack ranking

Are you a current employee?

One major thing I learned from 360 reviews is how bad developers are at judging each other or their manager.

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.

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.

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.

I honestly don't even get why reward pools are such a big deal.

I do work for you, I am owed compensation based on terms we've negotiated before I started working for you. From time to time these terms will come up for renegotiation.

There is no need for compensation in excess of what we've negotiated. Sure, I am not one to turn down free money, but understand that this does not affect our normal compensation discussions.

My work is worth $X on the market. I expect that you will pay me $X (or come up with alternative forms of compensation that are mutually agreeable). I will not sign a deal that adds up to $X where part of the compensation is discretionary. My work is worth what it's worth. If it is not up to your satisfaction, you are free to terminate this relationship or renegotiate my pay. You may not unilaterally decide to pay me less than what we agreed upon, and I will not submit to a system that allows this.

Which is to say, you will be unsuccessful if you try to persuade me to lower my base salary on the promise of "bonuses".

I feel that "bonuses" are just ways to hoodwink people who haven't been around the block. Every time I have come across bonuses of this variety, it has been an excuse to lower your base salary. I have never once received the full possible bonus, even though I have been promised multiple times prior to joining the company that "everyone" gets the full amount, and that only very poor performers don't. I have never received a poor performance review.

If you do not pay me $X, whether in salary or in bonuses or in suitcases of bacon, I will leave. I do not give one flying hoot about stack ranks, bonus pools, or any such nonsense. I am not willing to inject uncertainty into my income without a proportional upside for myself.

Discretionary bonuses are full of shit.

360 isn't perfect but it's better than the alternative.

You're basically saying that those who worked daily in close interaction with the 10x developer and had to work with the code that developer produced, had lower regard for his technical ability than a manager who presumably is further removed?

You can't ignore the social aspect. A team with social frictions isn't going to work as well as a team that enjoys working together. Obviously just being social isn't enough but a strong team needs a combination of the social and technical aspects. Also 360 should mean going beyond the team, so the manager should be evaluated by his peers, his managers and his team and technical people on the team should be evaluated by members of other teams they work with.