Monday, July 4, 2005

Microsoft Stack Ranking is not Good Management

There are some excellent follow-up comments in my post about how Microsoft's current review stack ranking system seems completely busted and unfair. While I truly believe there are solutions to it, the solutions will neither be easy nor readily agreed upon. But our system is busted and we have to walk away from trending great performances downward, demotivating our employees, and giving people a reason to keep around their poor performers to ensure the bottom of the curve is always easily occupied.

A few questions considering the comments and the current review season joy:

  • What do employees want and need in order for them to provide fantastic customer-pleasing results?
  • We have a bunch of stinker leads still. How do we identify them? What do we do with them?
  • What can the stack ranking system be replaced with?

The Washington Post recent had an article called "The Mark of a Good Manager." What makes a good manager? One that empowers and trusts their employees with meaningful work and a manager that is available for engaged conversation and is respectful of questions (a challenge for Microsoft). I have a great lead now, but I've had some leads who perfected the, "Huh? What the hell do you want?" gaze when I dropped by their office to clarify an implementation detail.

What the hell do I want? To get you to do your job.

Folks know that managers get a separate people review rating in addition to their individual rating. I haven't seen this given a whole lot of attention. A problem with the review rating is that it's still something negotiated by the lead and their management. Shouldn't the reports (from the very bottom of the hierarchy) have some kind of say? Folks might actually fill out the manager feedback if they knew there was a spot to rate their boss and have it stick. Sure, there might be some sycophantic and burning revenge bits in there but out of this noise would be the stars and the clunkers. Love your stars, get rid of your clunkers.

First, I'd want to fire the bad managers. But as a compromise, I'd look back at their individual contributions and if they were happy and productive good employees, I'd give them that chance to side-step back into an individual contributor world. Make this part of an effort to flatten management all-around and get more talented contributors back spec'ing, developing, testing, and all that other work. Decide that managers are going to plain just manage, and manage super-well.

Back to the stack ranking system. I was in Borders at Redmond Town Center and I stumbled across Joel Spolsky's new book The Best Software Writing I (which was sheer luck - I had seen it before but mistaken the current cover for the previous book's cover). I flipped through it and by sheer luck compounded hit the article by Mary Poppendieck put in the section called "Team Compensation." (it can be found off of Ms. Poppendieck's site as well: ). I read the article a little and decide to plunk down some cash for the book (I'm quite glad I did) and sat down in Starbucks and continued reading.

The article deals with the classical story of a team that did a fantastic job all around but now the manager is faced with stack ranking her employees. She says they all are the best (4.0) and has to deal with the consequences. I certainly recognized the listing of dysfunctional consequences that result from the competitive stack rank system:

  1. Competition.
  2. The perception of unfairness.
  3. The perception of impossibility.
  4. Suboptimization.
  5. Destroying intrinsic motivation.

Something I didn't realize is that good ole Deming himself decried ranking review systems and I thank the article for bringing that up. Back when I was a Deming-nerd I didn't work for a stank-ranking organization so that particular key point was lost of me. The Deming article Gone But Not Forgotten has the following succinct gem:

  • Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict.

I'd like to hear from the Microsoft executive who thinks they have greater insights into team leadership than Deming.

Our current review system lacks honesty and integrity when you have to fit people to a curve and then tailor your feedback according to where they ended up. You're lying to them about their accomplishments so that they can be fitted into a compensation model. You can't give them truly honest feedback during the rest of the year because the end-result-curve may not match your kudos.

The only feedback I see mandated to give people during the year? Give them feedback and "message" them if they are at risk of getting a 3.0 so that it's not a surprise. We spend more time preparing the soft-landing for bad-news that folks who are doing great don't get to hear it.

We have to grow up and come up with a review system that encourages truth, encourages recognition, and encourages people to be their best without having to kick their peer in the shin ("I don't have to run fast - I just have to run faster than you!"). And don't get trapped in the mindthink that truthful feedback is tightly coupled with compensation.

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