News & Information for Technology Purchasers NewsFactor Sites:     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
24/7/365 Network Uptime!
Average Rating:
Rate this article:  
Microsoft Revamps Job Evaluations in Quest for Innovation
Microsoft Revamps Job Evaluations in Quest for Innovation

By Barry Levine
November 13, 2013 10:26AM

    Bookmark and Share
Interestingly, just as Microsoft is abandoning its bell-curve ranking of its employees in hopes of stimulating innovation, Yahoo has just adopted a new policy requiring managers to bell-curve-rank employees, and then dismissing those caught on the lower end of the curve. Reportedly, Yahoo has fired more than 600 workers in the last few weeks.

Related Topics


Can a change in how Microsoft ranks its employees' work performance improve its ability to innovate and compete? That question will take awhile to answer, but it's a valid one after news on Tuesday that the technology giant is dropping its "stack ranking" employee review system.

Stack ranking is a much-reviled Microsoft system where managers rank employees on a bell curve, creating winners and losers in every department. Employees have reported that the result was a cutthroat and highly politicized environment, where some workers learned how to best game the system -- and thus get the largest bonuses. Product innovation and quality, however, were not at the top of employees' minds.

Instead of stack ranking, Microsoft managers will now give feedback to employees on a more frequent basis. Additionally, managers will have more discretion to hand out bonuses, rather than be tied to a numerical system.

'One Microsoft'

An e-mail was sent out Tuesday to all employees at the company from Lisa Brummel, executive vice president for human resources.

It said that the changed performance review program is better aligned "with the goals of our One Microsoft strategy," a unified, teamwork-based approach that has been touted by outgoing CEO Steve Ballmer. She said that this "fundamentally new approach to performance and development" is intended to promote "new levels of teamwork and agility for breakthrough business impact," and is the result of feedback from employees and reviews of "numerous external programs and practices."

Brummel said that the new approach emphasizes three elements -- not only one's own work, but "also how you leverage input and ideas from others, and what you contribute to others' success." Additionally, she said there is now more emphasis on employee growth and development at Microsoft, and the rewards budget will no longer be based on a "predetermined targeted distribution."

Interestingly, just as Microsoft is abandoning its bell-curve ranking of its employees, Yahoo has just adopted a new policy requiring managers to bell-curve-rank employees, and then dismissing those caught on the lower end of the curve. Reportedly, Yahoo has fired more than 600 workers in the last few weeks.

Job = Keep Job

Bell-curve ranking was popularized in the 1980s by the likes of GE's Jack Welch. According to the Institute for Corporate Productivity, it has fallen out of favor in recent years, with only 5 percent of high-performing companies using this approach in 2011, compared with 20 percent two years before that.

Additionally, a Massachusetts Institute of Technology study in 2006 found that forced ranking de-motivates even high performers who, because someone has to be in the middle or the bottom, sometimes get forced into that part of the curve. Among other things, this kind of looking-over-your-shoulder compels employees to take fewer risks, which leads to less innovation -- and appears to be antithetical to the cooperative, flattened hierarchy that characterizes most nimble dotcoms.

Brad Shimmin, an analyst with industry research firm Current Analysis, said that stacked ranking tries "to emulate a meritocracy," where there are winners and losers based on an assessment of ability, but it "fails to capture the value of an employee."

Such an employee performance system, he added, could have been a factor in why Microsoft "had been behind" in reacting to three of the biggest changes in computing -- Web browsers, mobility and clouds. In such an environment, Shimmin said, an employee's "job is to preserve your job," not to innovate or take risks.

Tell Us What You Think


1.   Watson's First Consumer-Facing Gig
2.   HP Drops $50M on Hortonworks
3.   Yammer Moved to Office 365
4.   Will Next OS X Bring New Apple Grief?
5.   IBM, California Partner in the Cloud

Backlash Stirs Against H-1B Visas
Debate over foreign workers continues.
Average Rating:
Amazon Intros Zocalo Storage Service
Online storage and sharing for business.
Average Rating:
Avaya Pressing Hard on Cloud-Based UC
Provides easier, faster provisioning.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Researchers Working To Fix Tor Security Exploit
Developers for the Tor privacy browser are scrambling to fix a bug revealed Monday that researchers say could allow hackers, or government surveillance agencies, to track users online.
Wall Street Journal Hacked Again
Hacked again. That’s the story at the Wall Street Journal this week as the newspaper reports that the computer systems housing some of its news graphics were breached. Customers not affected -- yet.
Dropbox for Business Beefs Up Security
Dropbox is upping its game for business users. The cloud-based storage and sharing company has rolled out new security, search and other features to boost its appeal for businesses.

Enterprise Hardware Spotlight
Watson Gets His First Customer Service Gig
Since appearing on Jeopardy, IBM's Watson supercomputer has been making a living using his super-intelligent knowledge base for business verticals. Now, Watson's been hired for his first customer service job.
Tablet Giants Apple and Samsung Feel the Heat
When a company saturates its home market with a once-hot product, expect it to pump up efforts elsewhere. Apple, for its part, is now pushing iPads to big corporations and the enterprise market.
Microsoft Makes Design Central to Its Future
Over the last four years, Microsoft has doubled the number of designers it employs, putting a priority on fashioning devices that work around people's lives -- and that are attractive and cool.

NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.