Microsoft Ends Competitive Employee Rankings

Anyone who pays attention to the CopyPress blog knows how much emphasis we put on company culture. Can you blame us? A company’s internal structure accounts for its successes and failures almost as much as its product. This is why media experts point to Microsoft’s employee ranking system as a cause of decline in market share.

Microsoft has a stacking system that rates employees on a curve. What does that mean? A certain percentage of employees are labeled best performers, another batch is grouped into good performers, then there are average performers, and the final group is labeled poor performers.

PrintThis means that you don’t have to be the fastest antelope on the Sahara, you just can’t be the slowest. If everyone meets their goals and KPIs, but some go above what is asked, those who don’t do extra are still punished as if they hadn’t met them. They were fast, just not fast enough.

The ranking plan creates an environment of competition. It doesn’t matter that you’re doing well; you need to be doing better than everyone else to avoid getting fired and to get any rewards. There is no teamwork, no “everyone is a winner” in this system.

An article by Vanity Fair said competition rose to the level of sabotage. People withheld information from each other and actively campaigned against their coworkers to make sure they would get rewarded and others would get fired. It was all about the rankings. TechCrunch explained how the sabotage seeped into the team building process. Stronger employees would pick weaker teammates so they would look better and get ranked higher. (Imagine Derek Jeter playing with high school players so he would look ten times better than everyone else.)

shutterstock_135388526That’s not a very healthy company culture.

Good thing Microsoft decided to do away with it.

The Verge published the memo from HR to all employees explaining the new emphasis on teamwork and unity. There were three main points covered in the notice.

First, employees will be reviewed on their own performance, along with their ability to accept input from others and offer input to other people. Microsoft wants employees to start asking each other for their opinions and reviewing their peers’ work to see what can be improved. This facilitates the feeling of a “group win” when a product is launched or a plan is approved.

Microsoft also wants to focus on the knowledge and growth of its employees. In the previous system, employees were reviewed every six months. The problem was that each department was on a different timeline, they all had different ebbs and flows throughout the year. The new system will take the cycles of each department into consideration and build unique plans for employee reviews around them.

shutterstock_134176526Finally, the bonus and reward systems will stay in place, but won’t be doled out on a bell curve or ranking system. This is the best news in the whole memo, the part where bottom employees won’t have to fight to make sure they’re not last and the top won’t worry about getting dethroned.

A healthy review system doesn’t pit coworkers against each other and invite sabotage. Employees should be reviewed individually, not ranked compared to their peers. I think we’re all curious to see how Microsoft improves as a company under the new system. It couldn’t get any worse, could it?

About the author

Amanda Dodge