Microsoft Revamps Job Evaluations in Quest for Innovation

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...

Comments are closed.