“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:
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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
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