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November 14, 2013

Microsoft Eliminates Stack Ranking in Favor of Collaboration Focus

By Rory Lidstone, TMCnet Contributing Writer

With Steve Ballmer (News - Alert) planning to step down in less than a year’s time, it seems the Microsoft (News - Alert) chief executive is looking to make some quick changes before he leaves. For example, it seems Ballmer has decided to do away with the controversial stack ranking system that has been in place at the company for years. It’s tough to say what kind of effect this change will have on customers and end users, but Microsoft’s employees must be letting out a sigh of relief.



Put simply, stack ranking encouraged users to compete against one another. Employees would be reviewed by their management team and ranked, with a certain percentage selected as top performers, others average performers and others still poor performers. The obvious result was a competitive environment within Microsoft, leading to colleagues working against each other rather than together — especially since the method demanded some employees be designated as poorly performing.

Obviously, this approach has been criticized heavily both by former employees and outsiders. Vanity Fair contributing editor Kurt Eichenwald, for example, blamed the stack ranking system in part for Microsoft’s flat performance over the last decade or so. Such critics should be pleased to hear, then, that stack ranking is being replaced with a less harsh system that promotes collaboration.

“I am pleased to announce that we are changing our performance review program to better align with the goals of our One Microsoft strategy,” reads and internal memo from Microsoft HR chief Lisa Brummel. “The changes we are making are important and necessary as we work to deliver innovation and value to customers through more connected engagement across the company. This is a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact.”

Key elements of Microsoft’s new management strategy include greater emphasis on teamwork, collaboration, and employee growth. More importantly, the company has eliminated employee ratings.




Edited by Blaise McNamee
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