I’ve been saying similar things about our review process since, oh…1997:
Eichenwald’s conversations reveal that a management system known as “stack ranking”—a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”
Maybe I look at this stuff a little differently, having a social science background in addition to engineering, but I have never been able to understand how an engineer can look at a stack ranking review system and not immediately recognize the (dis)incentive structure it creates. Like Microsoft, LM is a company brimming with engineer types, including in management positions — how is it possible that these managers could look at such a system and not see its inherent operational flaws?
I suspect it’s actually because so many of them are engineers. It’s common almost to universality to encounter the view that “engineers are bad at people skills”, that we’re all introverts more comfortable working with numbers and code and machines and models than with other human beings. That view being deeply internalized, it’s only to be expected that when confronted with the need to deal with people issues, managers might choose to simply hand it off to the supposed experts: the human resources department and the constellation of outside consultants professing expertise in such matters.
Then of course there is the matter of liability. Any employee evaluation system based truly on merit is going to be open to charges of bias and favoritism. Cynically, one could view stack ranking as the perfect solution to this risk: because everyone knows that everyone else is getting screwed just like they are, there is less incentive to see (or claim) that the rankings are skewed by race, gender, or other such factors. You got the Yay! Everybody’s a Winner! average ranking this year, again, but so did Bob or Jane despite their excellent work that carried the whole department — while the useless Fred got the Top-Notch Contributor ranking, again, because of his superlative talent at ass-kissing the right managers.
As for the matter of Gates and Ballmer rejecting pioneering innovations years before others brought them to market based on parochial or blinkered perspectives, yeah, well…