“There were many reasons for the decline of Microsoft under Steve Ballmer, including… its lack of focus and its habit of chasing trends rather than creating them,” Will Oremus reports for Slate. “But one that’s not obvious to outsiders was the company’s employee evaluation system, known as ‘stack ranking.'”
“While Google was encouraging its employees to spend 20 percent of their time developing ideas that excited them personally, Ballmer was inadvertently encouraging his to spend a good chunk of their time playing office politics,” Oremus writes. “Why try to outrun the bear when you can just tie your co-workers’ shoelaces?”
“Microsoft wasn’t the first company to adopt this sort of ranking system. It was actually popularized by Jack Welch at GE, where it was known as ‘rank and yank’… What seemed to work for Welch — for a time, anyway — has produced some ugly results elsewhere,” Oremus writes. “Even GE phased the system out following Welch’s departure. But in an interview with the Seattle Times just last month, Ballmer indicated that he was sticking with it. From the Seattle Times:
Q: A lot of people have slammed Microsoft’s stack ranking review system as contributing to a noncollaborative atmosphere. Is the kind of cultural change you want to effect possible with that stacked ranking system still in place?
A: We’re doing our performance reviews now. We’re finishing up our year (and there are) no changes to—no—I’ll say minor changes to our system. I think everybody wants to work in a high-performance culture where we reward people who are doing fantastic work, and we help people who are having a hard time find something else to do. Now, whether our existing performance-management system needs to change to meet the goal of fostering collaboration is something that Lisa Brummel [head of human resources] would take up.
Oremus writes, “It will be interesting to see whether Microsoft’s next CEO takes more personal responsibility for the company’s corporate culture — or leaves it for Lisa Brummel to take up.”
Much more in the full article here.
MacDailyNews Take: Can you imagine a real CEO like Steve Jobs, Tim Cook, or Marissa Mayer installing a system that encourages their employees to constantly backstab each other while striving for mediocrity and then, when confronted about it, leaving it in the hands of human resources? Absolutely incredible.
America is an amazing place: Even the painfully stupid can become billionaires via nothing more than a fortuitous dorm assignment and a pantsload of user car salesman glad-handing.
Hey, don’t throw the bathwater out with the big dumb baby, keep the “stack ranking,” Microsoft! We like that strategy. We like it a lot.
Related articles:
Microsoft seeks to reassure workers by telling them that Ballmer’s reorg plan will go ahead – August 27, 2013
The rise and fall of Windows Mobile, under outgoing CEO Steve Ballmer – August 26, 2013
Steve Ballmer’s exit not planned or as smooth as portrayed by Microsoft – August 26, 2013
If Steve Ballmer ran Apple – August 26, 2013
Under sales guy Ballmer, Microsoft’s stock has been a dud – August 26, 2013
A tale of two Steves: Apple’s Jobs vs. Microsoft’s Ballmer – August 24, 2013
Steve Ballmer, Microsoft’s $16 billion albatross – August 23, 2013
Microsoft stock surges on Ballmer retirement news – August 23, 2013
Microsoft CEO Steve Ballmer to retire within 12 months as BoD initiates succession process – August 23, 2013
Yes, One has a team of fantastic workers who all give 110%.
But, That does not matter.
Not Matter What, Some of them HAVE TO FAIL their review. 😎
–
After a while, the only type of employees that you have remaining are…
> we help people who are having a hard time find something else to do.
If this “stack ranking” system applied to EVERYONE, it would have found Ballmer (and his top-level minions) “something else to do” many years ago…
wonder where Steve is ranked now?…adios Ballmer T Clown.
A system for backstabbing is called a worker’s union! Unions exist to suck the most they can from a company while doing the least amount of work! Only way to get ahead is backstabbing cuz unions make sure only the senior people get all the good stuff! Forced to join a union as a condition of employment sound like freedom to you?
Forced to have safe working conditions, good pay and benefits.
Sounds rough. 😛
Yea! Grocery stores are highly dangerous!
No thanks, I will make my own deal with the company because I am good at what I do.
Don’t want some fat slob sitting at a desk making a deal for me that is no better than the rest of the “membership.”
Safe working conditions, good pay and benefits: 100 years ago, the unions were needed. Then the fat slobs in the union management discovered their power and became more corrupted than company management because unlike company management, they had no competition. They have become the best backstabbers in the world.
Freedom to go back to the Victorian poverty age, or back to serfdom, and eventually slavery? That’s the way it’s all going right now I’m afraid to say, where individual worker’s “freedom” to discuss employment pay and hours amounts to agreeing to it all, or getting no work. Civilised Western society has spent 200 years reducing the “freedom” of bosses and feudal lords to throw us about. Now they’re taking it back from us…
No, no, Alex.
We need to get rid of unions. And we need to get rid of regulations that protect workers.
The holy and beautiful “market forces” will snuggle us up in their arms, keep us warm and safe and give us all good lives — like in the nineteenth century.
iMaki … the epitome of a pious turd.
Exactly. The goal of unions is to equalize the field so low performers are treated the same as high performers. Everyone gets the same $ regardless of ability, motivation, or results. Look at the $hithole public school system or municipal/state/fed “workers.” They don’t even try anymore. They have nothing to lose.
Then why are the majority of low performing states in education the ones that ban unions by law?
The public school system is hobbled by the idiotic way it is funded and politically controlled. Teacher’s unions are another red herring foisted on those who can’t think beyond sound bites.
“Then why are the majority of low performing states in education the ones that ban unions by law?”
What’s your source on that? Show details.
It’s easy, just look at the state SAT scores (freely available from http://www.ets.org):
These five states prohibit collective bargaining for educators, thus banning teachers unions:
– South Carolina – 50th
– North Carolina – 49th
– Georgia – 48th
– Texas – 47th
– Virginia – 44th
Wisconsin, where they’re using every dirty trick in the book to kill unions of all kinds is (currently) ranked 2nd in the country.
While the Stats are true, there is a reason. NC tests 100% of the students, so the average covers ALL the students. Other states may test ONLY 15% who are college bound. Guess what average value that results in?
So, that is the ONLY reasonable correlation. Don’t think so.
Exactly! Just like it’s not unions are the only problem with schools.
No, the goal of unions is to tax the workers to buy hookers and blow for mobsters and politicians (I know, same thing..)
-jcr
… SOME unions operate that way. Heck, some are even LESS useful. Most are more positive, more helpful towards leveling the playing field so the better workers can advance and be rewarded. So the boss’ son doesn’t get multiple free shots at the members of the secretarial pool. So there are at least a few sick days and vacation days for those not in upper management.
As your hatred of unions has blinded you to this fact, I’ll spell it out for you: The backstabbing here occurred at Microsoft. Microsoft isn’t unionized. Therefore, systemic co-worker backstabbing can occur in the complete absence of unions due to incompetent management.
iMaki go kaki
I have worked for unionized companies and institutions several times and in every case, I was limited in salary by the unions and admonished a couple of times for working too hard. My father was a long time union organizer and we disagreed about the modern utility of unions.
Knowing your political slant, it is very difficult to give you anecdote any credibility,
I don’t think you really know my ‘political’ slant. I don’t subscribe to any ‘political’ party or thought. Most people think I am very conservative or very liberal. I don’t believe that the world’s problems will be solved by politics or policies.
actually no one really thinks about you at all.
I know that you can’t pass up any of my comments.
Whereas we all think SO much about your wise and insightful comments, botvijerk.
hypocrisy |hiˈpäkrisē|
noun ( pl. hypocrisies )
the practice of claiming to have moral standards or beliefs to which one’s own behavior does not conform; pretense. Synonym: Seamusness.
ORIGIN Middle English: from Old French ypocrisie, via ecclesiastical Latin, from Greek hupokrisis ‘acting of a theatrical part,’ from hupokrinesthai ‘play a part, pretend,’ from hupo ‘under’ + krinein ‘decide, judge.’
Maybe your dad was right…
iMaki, some unions have taken things to excess. But most of them are looking out for the workers. Unions would not have formed if corrupt companies were not exploiting their employees. Workers tend not to unionize at good companies who honestly give a crap about their employees.
There has been far too much self-serving propaganda spread about unions over the past few decades – big business propaganda from the “job creators.”
Trolley troll, I’m guessing. The lame schpiel is the giveaway…
Mmmm… You however don’t get it (reality) at at all.
While I think many unions subjugate their “member” workers as mush as the companies ever did and are certainly an impediment to management and workers relations (and teamwork) and also to individual workers achievement and excellence.
Trade Union mentality is about “the collective” and defiantly not about stabbing each other in the back. If there was a fault it would actually be the reverse. That a “brother” (or sister) union worker would be unlikely to report even a coworker who regularly came back from lunch after having several drinks.
Sounds just like the “Program Performance Review Ranking” that our new state legislators have imposed on the university. sigh.
Set up a website to do the same to the state legislators…
Great idea!
What a dimwit.
I liked that employee review strategy! I liked it a lot!
Keep that in place. Ballmer is pure genius. So please no changes Microsoft!
For the past decade + 1 more year into the future, I assume there is no one doing SteveB’s performance review otherwise he will be long gone.
Nice!
So if you were sane, and good and really skilled, why the hell would you want to work there? Other than the paycheck.
what is Ballmer’s rank among CEOs?
(the dude had near INFINITE resources $$$$ at his disposal for 10 years — left to him by his pal Billy Gates — a never-ending and SECURE stream of billions for expansion, R&D, acquiring personnel and tech companies, marketing etc AND a complete FREE HAND from a stupidfied Board of Directors mesmerized by his Pal Billy the Chairman and what did he do with it? )
AND HE HAD THE BALLS TO RANK OTHERS !??
Amazing.
My former employer – Lockheed Martin – does performance reviews based upon a bell shaped curve. I remember asking my manager if everyone in the group did “Excellent Plus” work and another employee did just “Excellent” work then that would be the former person would be towards the bottom of the bell curve. He replied “Yes”. Lockheed Martin used to be a great place to work before institutionalizing this practice. Now this article describes Lockheed Martin too.
I spent 15 years in the defense industry and am SO HAPPY to be out. Please do yourself a favor and work in commercial industries.
Yep. I quit the big “L” this year, and couldn’t be happier about it (to say nothing of richer, since I got off Lockheed’s miserable “raise” sequence).
It is a miserable company to work for, with clueless, dishonest upper management and stifling bureaucracy. Stay far away.
So…Monkey Boy is patterning himself after Jack Welch? That explains a lot. JW is anti-worker no wonder GE dumped his policies.
“. . . and we help people who are having a hard time find something else to do.”
Looks like Microsoft’s “stack ranking” finally caught up with Monkey Boy himself!
He meant that they take those people out to the loading dock and slam the fire door behind them
So who ranks Ballmer?
The stockholders, thru proxy voting
Can anyone tell me the name of the movie that MDN has of balmer? I am trying to remember the name if that movie. Thanks guys.
I’ve been a leader in such a system and, for the most part, it doesn’t work. It especially breaks down when your company has less natural turnover and there’s no new/replacement hiring. MSFT has had layoffs and been stagnant, therefore there’s no organic churn. As people leave, great people become ranked good and then bad over time, someone has to be at the bottom of the curve once the bottom is laid off or driven off. And then even the great ones get disenfranchised because of the backstabbing and mistreatment of their colleagues.
Stack ranking has a better chance at a highly desirably employer like Apple, Google or Twitter… but it would eventual break down there too.
btw, good managers hate the system because they can’t give honest assessments. I’ve had to lay people off and then hire (or do without) lesser replacements.
Bottom line: Balmer’s an idiot.
In my two decades with Apple, management was asked to stack rank their teams every time there was a reorg that included downsizing. Good managers ranked their employees as individual contributors, not in comparison, and then looked at how the results stacked up. Bad managers made arbitrary evaluations that resulted in “surprises” (to everyone but the manager) in the ranking order. In some areas of the company it worked fine, but in any area where an individual’s responsibility and control over their objectives was complex, stack ranking was too difficult to do effectively and led to “bad” manager decisions, i.e. surprises when layoffs were announced.
It’s the poison itself manifesting in Ballmer that infuses in all areas and products. Steve Jobs created products for himself and shared them with the world. Steve Ballmer makes them to bully and take from the world.
Outstanding that this abomination is going away. ALL HR MANAGERS who ever used it or we’re exposed to it should be fired – IMMEDIATELY.
This was clearly the worst system for managing hi-tech personnel ever devised. Doesn’t surprise me that Jumpin Jack Welch started it. The guy is a maniac… Given the premise of a recent b-movie who’s theme was that for 24 hours anything was legal, MILLIONS would be lined up at Welch’s place to string him up !!!
Every environment that I’ve seen in the last 40 years in the tech world using this personnel system has left at least 20-30% of employee productivity on the table because they spent that time plotting against their mates or looking over their shoulders…
AMF to all you HR trolls…
Welch was a prick. Suffered from short man’s complex. He was a little prick.
Clearly, everything at Microsoft is going just fine. Ballmer has managed to reduce market capitalisation, decrease staff morale and turn Windows into an obsolete behemoth whilst missing out on the mobile revolution.
Yep, all is well in the world. Great job Ballmer – you’ve made Billy a very happy man.
Way before Jack Welch, Bell Labs had stack ranking. Maybe it wasn’t as severe as GE made it but all employees within an organization were ranked from first to last and raises given out accordingly. Of course firings happened infrequently. The company also published a chart with everyones salary shown as a dot on a chart showing salary versus years of employment