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Microsoft does away with stack ranking

zdnet.com

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Re: Microsoft does away with stack ranking

#51

Post by tensor »

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…

What makes you think that your judgements are any better than theirs? How do you judge performance? Do you look at code? Or do you simply go by how many feature check boxes they get through in a given time frame?

edit: and I don't ask this to be insulting, but judging performance is a very difficult task and I've never seen a reliable methodology for doing it. Thus, I'm naturally extremely skeptical when someone claims that they can do it better than others. Especially so when it includes broad generalizations about a group of people.

Re: Microsoft does away with stack ranking

#52

Post by Todd »

This is a great move for the company. Especially now that so many competitors have internalized the process. It was the single most identifiable thing that poisoned the culture at the company. It will be interesting to see what they replace it with. The process certainly made it easier to make decisions higher up the chain (even if it was difficult for the managers and their direct reports).

Re: Microsoft does away with stack ranking

#53

Post by waqf »

j_baker wrote: post #45

The last bullet point strikes me as incredibly odd. No ratings? How will managers determine raises and bonuses if they don't have a rating to determine whether the employee is meeting expectations or not?

You're asking how managers will be able to freely assign numbers to individuals according to their performance, without being guided by numbers that the same manager previously freely assigned to the same individuals according to their performance?

Re: Microsoft does away with stack ranking

#54

Post by SubuSS »

>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.

The compensation budget is the key part here. I don't know how this is going to account for:

- Failed products with smart developers and their retention. - Avg products with very smart developers - Less 'visible' projects. Those that management don't realize is necessary until you have no one working on it. (This happens a LOT in big companies).

All this can be solved by pumping a ton of money into this as they are alluding elsewhere though.

Overall the fact that they are taking feedback seriously and are working towards a solution is pretty positive though.

Re: Microsoft does away with stack ranking

#55

Post by dllthomas »

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…

"If I am not performing to expectations, fire me or renegotiate my salary."

Both of these are high overhead, which means harder to tune. Depending on circumstance, that may work to the advantage of the employer or employee, or to the advantage or disadvantage of both.

In principle it needn't require desperation, just confidence that your market salary should be above what you can demonstrate it should be during the interview process.

Again, I'm not speaking to actual practicality - I know in a limited fashion how it has and hasn't worked for me, where discretionary bonuses have occasionally been present but have generally not been a large part of my compensation; I don't have any particular insight into their function / misfunction broadly.

"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."

Obviously.

Anyone saying "Base + max bonus gives the compensation you expect" is trying to take advantage. It should be "base + expected bonus is marginally higher than the fixed rate you would deserve if you are as good as you think".

Re: Microsoft does away with stack ranking

#56

Post by derefr »

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…

You know what, though? Productivity on a team can be just as separate from people's perception of you (i.e. how much they like you) as individual productivity is.

Imagine this experiment: you have a great, productive team who has one member they all hate (and therefore assume isn't doing much for the team.) You take that person off the team... and the team's productivity plummets.

Re: Microsoft does away with stack ranking

#57

Post by jasonculbertson »

I saw the downfall of stack ranking immediately after a company I worked at was acquired by Microsoft. The workplace changed within a month from one focused on teamwork and support to Lord of the Flies. When the only way you can succeed is by being "better" then someone else you are forced to step upon others.

I believe that this is also the effect of working for a public company with a stock that hasn't moved in price in 10 years.

Re: Microsoft does away with stack ranking

#58

Post by jredwards »

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…

Likability is underrated. Someone who is easy to work with, improves workplace morale, and makes other developers feel comfortable at work is a valuable asset. Certainly, it shouldn't be a substitute for technical ability, but it can be a very significant complimentary attribute.

Re: Microsoft does away with stack ranking

#59

Post by tiglionabbit »

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…

This is a perfect description of the Halo Effect.

http://en.wikipedia.org/wiki/Halo_effect

Re: Microsoft does away with stack ranking

#60

Post by HelloMcFly »

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…

Bonuses must be distributed in some manner, and at most companies it is ultimately zero-sum. Giving one person a higher than average bonus means somewhere in the company (maybe on your own team, maybe someone across the world) will have to get less.
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