In August, Ballmer announced he would be stepping down as CEO within a year. Managers and leaders will have flexibility to allocate rewards in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget." "We will continue to invest in a generous rewards budget, but there will no longer be a pre-determined targeted distribution. "No more curve," she wrote in a list of what will be changing in the coming days. In a lengthy Vanity Fair feature on Microsoft published earlier this year, Kurt Eichenwald singled out the stack ranking system "as the most destructive process inside of Microsoft" causing a lack of innovation in Redmond during what he labeled a "lost decade" under the leadership of outgoing Microsoft CEO Steve Ballmer.īrummel's memo makes it clear that Microsoft is moving in a completely different direction with regards to how it assesses employee performance. To wit, even a very successful group of employees must have some members graded as average or poor per the rules, leading to institutional incentives against helping others and sharing credit, and in some instances, the downgrading of good workers as poor.īonuses, promotions, and other rewards for employees at Microsoft have hinged on this ranking process. The trouble with the system, according to its critics, is that it functions as a zero sum game. "These changes will encourage greater speed, creativity, and teamwork to help us bring innovation to market faster and better serve our customers," a Microsoft spokesperson told PCMag.įor years, Microsoft used a stack ranking system to grade employees on a curve, rating a portion of workers as top performers, another as average, and a third group as poor. Microsoft on Thursday confirmed the change to its performance review program. ![]() ![]() ![]() Best Hosted Endpoint Protection and Security Software.
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