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Microsoft does away with stack ranking

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Re: Microsoft does away with stack ranking

#41

Post by potatolicious »

dllthomas wrote: post #39
potatolicious wrote: post #38

Earlier quoted context omitted.

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 discuss…

The purpose of discretionary bonuses is to address imperfect (and potentially asymmetric) information about just how much you really are worth. It can be easier to assess post-hoc. Whether it actually does this well is certainly an important question, as well as how it can be abused and how frequently that happens, but it seems remiss to rail against them without noting their intended purpose - which, in the abstract…

Assessing performance post-hoc doesn't necessarily entail discretionary bonuses.

If I am not performing to expectations, fire me or renegotiate my salary. There are a great many ways to tune my compensation to my actual determined worth.

A discretionary bonus in this case is simply "you should take a below-market salary until we're convinced you're the real deal, and then maybe you will get the salary difference back". I'm not convinced anyone who isn't desperate will take this deal.

And having experienced the discretionary bonuses at two very large and well-known software companies, I am absolutely, completely, vehemently disinclined to ever enter into such an arrangement again.

For discretionary bonuses to make even the most remote amount of sense, it needs to offer the employee an upside for taking on the uncertainty.

Re: Microsoft does away with stack ranking

#42

Post by lmg643 »

Ensorceled wrote: post #34

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 an…

I once had a similar experience - in an interview situation. (I can be likeable in person, just not in comments...)

The guy was attributing statements to me, from the conversation we were having in that moment, that i had never said. He would even say "what you said, or what you were going to say..."

I found it extremely bizarre. I am a pretty precise person, and I wanted to correct him but i realized it is pointless. the lesson i take away was powerful - if people "like" you there is almost no level they won't go to make it work out.

one thing we can do about this is cry about it. the other thing we can do is to figure out how to "hack" likability. i think my mother taught me most of the basics already.

of course - much easier to do this for one hour in an interview, than for an entire year at a job. but there is something to be said for smiling, a few kind words, and then ... graceful evasion of everything else when you want to do real work.

Re: Microsoft does away with stack ranking

#44

Post by amaks »

ethomson wrote: post #25
r00fus wrote: post #20

Earlier quoted context omitted.

Isn't it the case the stacked ranking exacerbated the backstabbing issue? I see this move overall as a positive one for Microsoft - without removing the perverse rewards to screw over your teammates and other teams, the actual cultural fix can't take place. I think the culture will shift soon - Microsoft, for more than a decade, had no real competitors. They made more money each year whether they executed (see Win2k)…

My point was that no, I don't think stack ranking provides a greater impetus to backstabbing your coworkers than this sort of vague compensation model. In fact, I think a continuous model may lead to more backstabbing than exists now. Currently, I go into a bucket - let's say I'm a two, for instance - and all the twos get the same compensation. Can I backstab somebody so that I get a two and they get a three? Maybe.…

It doesn't really matter. Most of the time you don't know which bucket you're going to end up in, so constant back stabbing is the modus operandi to stay on top. I'm more curious about the absence of the formal review cycle in the new model.

Re: Microsoft does away with stack ranking

#46

Post by mkramlich »

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.

Re: Microsoft does away with stack ranking

#47

Post by Pxtl »

ethomson wrote: post #5

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. 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 s…

From the outside as a developer, you can feel the effect of such a drama-driven system as Stack Rank. MS's obsession with perfect backwards compatibility means they can't make mistakes, because those mistakes are forever.

So why embrace a process that seems to celebrate daring? A move-fast-and-break-things approach to projects? You'd think MS would be an analysis-paralysis company, because every MS product needs to integrate with hundreds of other MS products and be supported on oodles of platforms for like a decade.

But instead? We see this crazy wasteful churn of APIs and packages and MSDN Magazine-driven fashions.

I mean, how long will MS be stuck supporting Silverlight? Or Linq2SQL? Or ClickOnce installers? Or the zillion different SKUs of SQL Server and Access?

Re: Microsoft does away with stack ranking

#48

Post by amaks »

robododo wrote: post #8
Shenglong wrote: post #7

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. Is this not in effect the same as a curve? Giving higher bonuses to one person means giving lowe…

Yes, but there is no forced curve fit. A healthy organization will always "manage out" people who are not fit for the job. At Microsoft, folks are given the hint early enough that they can explore other internal options before leaving the company entirely. Though, to be honest, if someone just can't cut it, they will leave the company.

"At Microsoft, folks are given the hint early enough that they can explore other internal options before leaving the company entirely."

Except that it doesn't work. No internal hiring manager will ever allow the interview loop/transfer for the internal candidate with the score 4 or 5 (I think those are the lowest scores in the current model:-). In 99.9% of cases those unlucky who got 5 get laid off by the next review period.

Re: Microsoft does away with stack ranking

#49

Post by e12e »

InclinedPlane wrote: post #28
CurtHagenlocher wrote: post #24

Earlier quoted context omitted.

Is there a human organization of any size that doesn't have politics?

That's a bit like asking whether or not there is a human population of any size that doesn't have STDs. Sure, that's plenty true, but it's one thing to have a small incidence of herpes and another thing entirely to have a pandemic of HIV or syphilis.

Your analogy reminds me of this I just read the other day:

"Some countries initially felt they were isolated from AIDS, but now they realize there is no such thing. There is no border, no boundary. We've learned that walls endanger because they encourage a false sense of security. Even if you could impose the perfect program for screening international travellers, infected people will get in, and some of your own citizens will come back infected. In the meantime, people won't follow safe sex practices, because they figure they're protected inside their walls. (...)

One of the major barriers we face in trying to get countries to deal effectively with AIDS is the tremendous gap between social myth and social reality. I think closing this gap is a useful step. It's important to deal with things as they are, and not as somebody would like them to be. (...)

I have asked a lot of government officials and experts, 'At what age do young men and women in your society begin to have sexual intercourse?' This is not prurient curiosity on my part. I'm trying to figure out when you might start certain kinds of educational programs. The expert thinks a minute. He may take on a reflective look as he considers his own adolescence, and he makes a decision. Is he going to tell me when he had sexual intercourse, or when he should have had sexual intercourse? The answers are not at all scientific, and frankly, people often don't know what's going on in their own society in terms of sexual practices and drug use."

- Jonathan Mann, director of the Global Program on AIDS, from the book: "Reinventing the Future: Conversations with the World's Leading Scientists" by Thomas Bass, 1994

Great book. But the (somewhat paraphrased) quote fits rather nicely if you replace screening with "hiring process" and "career advancement" with "sexual practices".

How do we want our organizations to work? What should the life-cycle of an employee be? Can we state that frankly in a way that's both good for the company and good for the employees? Where do managers go as they grow older? Up or out? If up, where does the CEO go?

Re: Microsoft does away with stack ranking

#50

Post by SubuSS »

potatolicious wrote: post #41
dllthomas wrote: post #39

Earlier quoted context omitted.

The purpose of discretionary bonuses is to address imperfect (and potentially asymmetric) information about just how much you really are worth. It can be easier to assess post-hoc. Whether it actually does this well is certainly an important question, as well as how it can be abused and how frequently that happens, but it seems remiss to rail against them without noting their intended purpose - which, in the abstract…

Assessing performance post-hoc doesn't necessarily entail discretionary bonuses. If I am not performing to expectations, fire me or renegotiate my salary. There are a great many ways to tune my compensation to my actual determined worth. A discretionary bonus in this case is simply "you should take a below-market salary until we're convinced you're the real deal, and then maybe you will get the salary difference back…

It depends on the numbers involved too.

Many companies give you a market rate and a bonus (sign on / stock RSU/ cash bonus etc) on top of it to incentivize extra work / ownership.

My case: my base salary is pretty competitive considering the market/location. I also get a stock award on top of that based on my future potential / current work etc. For me, the stock component has been a reasonable contributor to the final net take home.

Essentially: you work hard, you can potentially make 2x-3x your base and this multiplier only goes up as you go up levels.

I am not against discretionary bonuses like the above (obviously :). Come for the base, toil for the bonus.

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