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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Topic: Stack-ranking

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November 13, 2013 at 10:33 AM

The death of stack-ranking: About time

If Microsoft begins a turnaround now to regain its innovative edge, the hinge won’t be the retirement of Steve Ballmer or any new device. It will be the elimination of the employee evaluation system known as stack-ranking.

This was the origin of the poisonous culture that has damaged the company, setting employee against employee, department against department.

Far from providing an honest evaluation of performance combined with benchmarks and coaching to improve, it required that a certain percentage of employees be deemed falling behind the bell curve — as in, find another job — even if they were excellent. Kurt Eichenwald described it in his influential Vanity Fair article, “Microsoft’s Lost Decade”:

Supposing Microsoft had managed to hire technology’s top players into a single unit before they made their names elsewhere—Steve Jobs of Apple, Mark Zuckerberg of Facebook, Larry Page of Google, Larry Ellison of Oracle, and Jeff Bezos of Amazon—regardless of performance, under one of the iterations of stack ranking, two of them would have to be rated as below average, with one deemed disastrous.

In an interview earlier this year with my colleague Janet I Tu, Ballmer seemed to begin backing away from the system as part of the company’s reorganization.

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