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Microsoft Ends Controversial Stack-Ranking System

Guaranteeing a percentage of its workforce would receive poor job evaluations proved not to be smart business for the technology giant.

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(Photo Credit: NOAA's National Ocean Service/Flickr)

Microsoft is in a transitional phase as longtime CEO Steve Ballmer leaves the company after a decade of being shellacked by its top competitor, Apple.

One of the most controversial aspects of the Ballmer's tenure was his stack-ranking system for employees. The system forces managers to judge employees on a bell curve, with a certain percentage of employees receiving positive, average, and poor ratings. So even if a manager was happy with the performance of all their employees, he or she still had to give some of them poor ratings. Critics of the system say it leads to employees competing against each other as opposed to working together.

But as Ballmer leaves, so does stack-ranking. The company announced last week it was ending the system and instead bringing a "fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact," an internal Microsoft memo said.

Writing in The Verge, Tom Warren said, "Ultimately, the changes could help attract talent to the software giant as it looks to move beyond its Windows roots."

Time will tell, but just because Microsoft is axing the stack-ranking system doesn't mean it's disappearing from the face of the Earth. Yahoo's new CEO Marissa Mayer has implemented a ranking system in hopes of turning around her company.

Tell Us What You Think

Do you think there are any positives of ranking employees on a curve? We want to hear from you! Leave a comment or join the discussion on Twitter.

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