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Microsoft kills the stack-ranking

Microsoft kills the stack-ranking

Microsoft kills the stack-ranking According to Jay Yarow from Business Insider, Microsoft has ditched its employee review system known as stack-ranking. Business Insider reports that the controversial system has created many problems for Microsoft and refers to an internal memo from Lisa Brummel, in charge of HR operations, which announces the organization’s new focus areas and changes.

What is the stack-ranking?

Stack-ranking basically allowed managers to rank employees from 1 to 5 in terms of their performance. Interestingly, instead of increasing employee productivity, it seems as if it hurt employee motivation.

Yarow highlights two major problems with Microsoft’s employee review system. Firstly, the stack-ranking didn’t encourage team work and collaboration. It didn’t support two brilliant people to work together, as a typical employee wouldn’t want to compete with a peer of equal or superior standing. Secondly, if an employee and manager happened to be friends, it created a system of favoritism whereby the employee would follow the manager who was most likely to accredit his staff with high rankings. Lastly, even good employees received low rankings that consequently upset their self-confidence and esteem.

Microsoft aside, it’s a story worth learning from. Employers should be brave enough to try new systems, evaluate whether or not they’re creating the desired results, be humble enough to recognize flaws and take the decisions to trash ideas and processes if it’s counterproductive. It’s important for organizations to continue innovate than stay in comfort zones.

Yarow, Jay (2013). Microsoft Just Killed The Controversial ‘Stack Ranking’ Review System That Killed Employee Morale. Business Insider. [Online] Available from:
http://www.businessinsider.com/microsoft-just-killed-its-controversial-stack-ranking-employee-review-system-2013-11#ixzz2l0vw2oJg [Accessed on 18 November 2013]