Paul Thomas has written a blog that explores the destructive nature of the Microsoft culture and how that culture is now affecting and demoralizing public education. Thomas is reacting to an article in Vanity Fair that is a must-read.
The “cannibalistic culture” that Thomas critiques is derived from a method of employee evaluation called “stack ranking,” where every unit is required to rank everyone in the unit, to identify the best, the average, and the worst, no matter how good everyone might be. By design, someone loses.
This competitive culture has not been good for Microsoft and is wreaking havoc on American public education, whose goal is equal educational opportunity, not the survival of the fittest. It is ruinous for collaboration, on which good schools depend.
It turns out that “stack ranking” is also known as “forced ranking,” and that it is a common practice in some big corporations. It was popularized by Jack Welch of GE. The idea was that you rate your employees from best to worst, and fire the worst. If all of them are really doing a terrific job, that’s too bad, you fire the bottom batch anyway, and repeat the process again next year.
One of the reasons I strongly recommend that you read the article in Vanity Fair is for the comments that follow. Here are a few samples:
I worked for IBM for a long time, and I definitely agree that “stacked ranking” in a company immediately and effectively kills all creativity in a team. No matter how brilliant anyone (or even everyone) on a team is, the majority of them will be relegated to mediocre-to-poor ratings year-after-year, while one or two of their higher-profile counterparts take the top rankings. Depending on the team, these top-ranked may truly be the best in the group, or they may just be more friendly with the manager or have a role within the team that gives them more exposure to their superiors. These rankings, as meaningless as they are, then affect every aspect of an employee’s career, from raises and bonuses to advancement opportunities, to job security during periods of layoffs. When I left IBM I promised myself I would never work for another company engaging in this absurd practice.
Taking platform developers and throwing them against hard goals and deadlines kills your ability to adapt. Management and project stakeholders end up making too many decisions about the technology away from the people who know it best – the people building it. To show progress and keep management happy, engineers shift their focus to tangible deliverables and ignore the pieces management can’t understand, like the underlying architecture. You start going down the path of building lots of bells and whistles, but nothing solid that you can competitively leverage.
Stack ranking is where they throw all the people in a work group together in a pit and let them eat each other. Afterward, the survivors are ranked according to ability by people who don’t actually work with them directly, thus permitting the lead to apologize in a credible fashion when someone who has been an excellent employee for at least 12 years (rarely less – and if you’ve been there over 15 years, you have a bullseye on the back of your head) given gleaming gold stars for performance for the last six months, suddenly has a big fat goose egg review and is escorted out the door for nonperformance issues.
At Enron, the same practice was called “Rank and Yank.” The traders who made the most money were ranked at the top. The ones who made the least were yanked. And we know what happened to Enron.