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Submission + - Microsoft abandons stack ranking (wsj.com)

Strudelkugel writes: In an overhaul of its employee-review system being announced Tuesday, Microsoft will stop requiring managers to rank workers on a scale of one to five on a "bell" curve. The system—often called "stack" or "forced" ranking— meant a small percentage of workers had to be designated as underperformers. The rankings were also crucial in allocating bonuses and equity awards.In place of the bell curve and numerical-ranking system, Microsoft managers will give employees more frequent feedback on how they're doing their jobs. Managers also will have more flexibility in how they dole out bonuses. The changes take effect immediately. The stack-ranking system was designed to ensure Microsoft's most-effective employees were awarded the lion's share of bonus pools, and were first in line for promotions. Such forced-ranking systems were widely copied after they rose to popularity at General Electric under CEO Jack Welch, but have fallen out of favor in recent years. Some current and former Microsoft employees say the software giant's system has serious flaws. Critics said the review program sometimes resulted in capricious rankings, power struggles among managers jockeying for their employees to get better reviews, and unhealthy competition among colleagues.
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Microsoft abandons stack ranking

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