The time for change is coming, and not only in the sense of technological innovation. Today, Microsoft Corporation (NASDAQ:MSFT) announced that it will finally be ridding employees of the controversial stack-ranking process. This evaluation technique was first applied to the company a decade ago, when Steve Ballmer took his seat as CEO of the tech giant. Now, it seems he’s losing his power and popularity in the company, and so is his rating system.
But let’s take a look at what stack-ranking is all about and what the Human Resources department has planned for the employees’ future.
Bigger, better, faster, stronger
Global enterprises and corporations are famously known for expecting the best of their workforces, and then rewarding workers for their efforts. Simple and effective, right? Well, yes and no. When Microsoft CEO Ballmer decided to run the company on his stack-ranking system, he thought that he would be doing right by it. The technique was based on ranking employees by percentage into top performers, average or poor performers. It was supposed to rouse the passion for work among colleagues, but instead it backfired into backstabbing competition and grudges among the workforce, according to ex-staff.
If you don’t make the cut, you’re out
Now, we all know that hard work is eminent to achieving success, but collaboration, team work and growth are just as essential. Nevertheless, Yahoo! Inc. (NASDAQ:YHOO), is one of the many industry players that believes in narrowing in on the hard work only. But how useful can a ranking system be, that gets over 600 people fired in less than a month? This same thought probably went through the head of human resources chief Lisa Brummel when she looked at the stats and overall morale within Microsoft Corporation. And since no healthy business can run on unsatisfied employees, she decided to take a stand and say adios to Ballmer’s stack-ranking.
The dawn of a new day
In a memo sent out today to the staff of Microsoft, Brummel explained that the focus is a “fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact.” As such, the team units at Microsoft will now be promoting teamwork and collaboration, instead of individual results. Pre-determined targeted budget boosts will be cut from the program, as well the overall ranking. And to top it off, the “Connects” program will actually allow each employee to get a personal performance review and tips for growth. So no more kicking the weak to the curb.