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Yahoo rolls out "stack-ranking" just as Microsoft kills it
Back in the 1980s at General Electric, Jack Welch started a system of stack ranking employees which was picked up by Microsoft. A 2012 Vanity Fair article highlighted how over the years stack ranking helped to breed resentment and distrust among employees at Microsoft. The articles top quote "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,”has certainly had a lot of airtime across the web.
Microsoft told employees on Tuesday that it's ending its so-called "stack-ranking" system. Under Microsoft's infamous system, workers were ranked on a curve, and those at the low end would be fired or dealt with in some way. The goal in stopping these rankings is to focus more "on teamwork and collaboration," according to an internal memo human-resources chief Lisa Brummel sent to Microsoft employees.
Stack also became popular at Google, although it's not clear if Marissa Mayer, who was previously a vice president at Google, was involved in implementing it. Either way Yahoo employees can't be happy to hear that CEO Marissa Mayer has begun implementing this exact strategy at Yahoo. AllThingsD's Kara Swisher reported that Mayer asked managers to rank their workers on a curve, and more than 600 people have been fired in the past few weeks.
The biggest problem with stack ranking is that it encourages employees to be competitive with one another rather than collaborative. And it was just as anti-collaborative as Microsoft suspected. Microsoft's top performers avoided working on the same teams "out of fear that they would be hurt in the rankings."
It will be interesting to see how this works out for Yahoo.
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