Stack Ranking is a system that companies like Microsoft use to measure and rate the performance of their employees. Amazon, Facebook, and Yahoo all have their own versions of stack ranking. It’s a pretty controversial system for those involved, both currently and previously with the company. And it’s also no more. Microsoft has sent out an internal memo to employees letting them know that the system will cease to exist, starting from now.
What is stack ranking? It’s a system that Microsoft used to rank and determine employee performance. Leaders on teams were required to rate employees working under them as either top performers, good performers, average performers, or poor performers. That in and of itself isn’t necessarily bad, but the fact that only a given percentage of employees in a given unit could be a top performer vs. a good performer is where it falls apart.
For example, in reality you might be a good employee, but if the leader of your unit has already given out the allotted "good employee" slots to your coworkers you might fall into being labelled as an "average employee". Even though you’re a good employee, the system forces someone to need to be average and poor performers.
The stack ranking system within Microsoft has been heavily criticized (and even supported) for years. We won’t get into the argument of whether or not you can get better performance using the system. So what’s Microsoft doing now? According to the internal memo sent out by Lisa Brummel, head of human resources for the company, there will be a new system implemented that focuses on ranking employees on how they fit into the “One Microsoft” plan. That is, teamwork and collaboration have been given priority. We’ll hopefully see divisions within Microsoft cooperating with one another more readily over time.
Thoughts on Microsoft removing the stack ranking? Don’t forget to head to ZDNet to read the full memo that was sent out to Microsoft’s employees.
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