A kinder, gentler Microsoft does away with stack ranking

Look around the office. For any group of five people you can easily figure out which person excels, which three are doing okay, and that leaves the person who’s a slacker by comparison.

Microsoft has compared its employees that way for years, but no more. The company is ending its evaluation system known as “stack ranking.”

The problem with stack ranking was that people angled to get on work teams where they knew they could be a top performer by comparison. Many good employees were eliminated, even though they had significant contributions to a high-performing work group, because someone one had to be on the bottom.

Full-time employees received an email today saying Microsoft is doing away with grading “on the curve.”

“There will no longer be a pre-determined targeted distribution,” says Lisa Brummel, head of human resources for the Microsoft.

Instead of pitting one employee against another, Brummel says teamwork and collaboration are going to be given more priority in the way employees are evaluated.

A statement the company sent me says, “These changes will encourage greater speed, creativity and teamwork to help us bring innovation to market faster and better serve our customers.”

Microsoft isn’t the only company using stack ranking to compare employees. Amazon, Facebook and Yahoo do too.

Microsoft has taken the most criticism for stack ranking though, with some of it coming from a Vanity Fair article last year and from former employees who said it lead to a “dog eat dog” environment.

Last year, I talked with Jason and Melissa who say stack ranking isn’t entirely objective. It’s based on judgments such as “how much your manager likes you, or how much visibility you have beyond your immediate team.”

It’s a popularity contest.

Jason and Melissa both worked in Microsoft IT and tell me they performed well. Jason says he was promoted every year for the almost 7 years he was there. Melissa received the top review one year after working 12 hour days and taking on extra projects.

“I really did put a lot into my work at Microsoft and it was important to me. You feel like you put so much into your work and end up wondering why it’s not being valued,” Melissa says.

In 2005, Melissa says she was diagnosed with Post Traumatic Stress Disorder brought on by the “hostile” Microsoft workplace and lack of support from managers.

“I just couldn’t think. It was hard to make decisions,” Melissa says, describing her PTSD symptoms. “I was very emotional. On the ride home from work every night, I would just cry all the way.”

She kept working for the company two years after being diagnosed with PTSD, and then resigned. She says her condition has improved after being on medication for a year to treat her anxiety.

“I could survive there. I could do well. I finally learned the game, but I decided I didn’t want to participate anymore. It wasn’t for me,” she says.

“It feels like it took away a dream,” Jason says. “I believed I could do something big at Microsoft. When a new manager comes in, all of your great accomplishments can be wiped clean and you have to start all over again.”

Jason and Melissa didn’t want me to use their last names for this story, but they did attach their Microsoft badge numbers to a book they published last year to help other employees cope with the company’s evaluation system. It’s called Stack Rank This! Memoirs of a Microsoft Couple.

Managers say the most beneficial part of stack ranking was identifying the high performers so they can take proactive steps to prevent them from leaving or being recruited elsewhere.

By LINDA THOMAS