Microsoft ditches infamous employee evaluation scheme

Microsoft is abandoning the major elements of its infamous ‘stack ranking’ system of employee evaluation, a system that critics claim stifled innovation at the company.

The oft-maligned system required managers to grade their subordinates along a bell curve. According to a Vanity Fair article from last year, under the system “every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor”, regardless of how many actually should have fit into those categories.

Those getting top marks were given bonuses and promotions, while those at the bottom “usually received no cash or were shown the door”.

The system “crippled the ability to innovate at Microsoft”, the article said.

Some ex-Microsoft employees have claimed the rankings pushed them to focus on gaming the review system rather than just doing their job well.

Microsoft employees were reportedly notified of the changes in a letter from the company’s executive vice president of HR, Lisa Brummel (located in full here).

In the letter, Brummel said “No more curve” and “No more ratings”.

“We will continue to invest in a generous rewards budget, but there will no longer be a predetermined 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,” she said.

Brummel also promised more emphasis on teamwork and collaboration, and more emphasis on employee growth and development.

“We have taken feedback from thousands of employees over the past few years, we have reviewed numerous external programs and practices, and have sought to determine the best way to make sure our feedback mechanisms support our company goals and objectives,” Brummel said in the letter.

“This change is an important step in continuing to create the best possible environment for our world-class talent to take on the toughest challenges and do world-changing work,” she said.

Pictured: Lisa Brummel. Image courtesy of Microsoft.