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Microsoft Throws Employee Stack-Ranking Out The Window

Source | LinkedIn : By Steffen Maier

Microsoft, the company that saw itself as market leaders in desktop computing in 1995, has had its share of problems over the past 20 years. 2000 to 2010 had become known as the ‘lost decade’ – the decade, in which the then CEO Steve Ballmer, lost substantial market share from the likes of Apple and Google. Kurt Eichenwald, the author who penned the article ‘Microsoft’s lost decade, blamed the system of stack ranking for the lack of company innovation. In November 2012, Lisa Brummel the Head of HR, announced that the company would be getting rid of the stack ranking system and replacing it with a process that had more emphasis on teamwork and employee growth.

The Problem

Kurt Eichenwald explains that in the years Microsoft was supposed to be crippling its competitors, it instead crippled its employees. At the center of Microsoft’s cultural problem was their performance review system. Every manager was forced to place their employees on a scale from top to poor performers. One employee said that:

“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review.”

“It leads to employees focusing on competing with each other rather than competing with other companies.”

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