Productivity at Microsoft has skidded to a brief halt thanks to the Vanity Fair article, which employees are reading on tablets and Nooks and Kindles because no one dares bring in the actual magazine.
I've had a chance to read the article and talk to a friend at the company at length. I had planned to cover a number of issues, but one is so overwhelming it really demands this full blog post.
According to the Microsoft employee I spoke to, the "stack ranking" method of employee measurement is even worse than VF made it out to be. The stack ranking employee review system says 20 percent of the staff on any given team are stars, 70 percent are merely adequate and 10 percent are worthless, and it sets out to fit people into one of those three molds, to the point of being a self-fulfilling prophecy. People ranked in the 10 percent often end up there for being lousy at office politics, not their job.
"If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review," a former software developer told VF writer Kurt Eichenwald.
Stack-ranking is all that and worse, according to my mole. You are ranked on a 1 to 5 scale, 1 being tops and 5 being worst. But it's not just ranking that’s the problem; it's the sheer amount of time spent on it.
"We have been in peer-evaluation and self-evaluation and managerial evaluation since late May, with two months to go before FY13 commitments are codified and the mid-September bonus season makes it rain, and the ******* midyear evaluations start three months later," said my source.
What's worse, people with a 3, 4, or 5 ranking can't transfer within the company, and that impacts about two-thirds of the workforce. It doesn't matter if it's a person whose skills could be better used elsewhere, someone who just needs a change of scenery to revitalize their work, or an employee who just needs to get away from an awful boss. Managers won't touch anyone who has a 3 or 4 or 5 ranking. So their work continues to suffer and they can't move out of a bad situation.
And here's the real kicker: not only are individuals ranked, so are groups, and it's up to their manager to fight for them. Sometimes whole groups are tagged with a 5 simply because their manager wasn't strong enough to stand up for them when management was looking to fulfill its 10 percent prophecy.
Microsoft’s ‘most universally hated exec’
Eichenwald clearly had a bone to pick with Ballmer, and was so bent on nailing him that he missed out on a bigger target, my source says.
"Murmuring in the halls was that if the writer hadn't been gunning so hard for [Ballmer] he'd had noticed the seething hatred of Lisa Brummel, perhaps the most universally hated exec in the place," according to the source.
Brummel is head of HR with the title Chief People Officer. Ballmer was the creator of stack ranking, but Brummel, when she took over HR, had promised to fix it. Instead, according to my source, she has tweaked it ineffectually for years, leaving a bad scenario in place. She is also seen as the one behind the decision to dump a premium healthcare benefits plan, something Eichenwald touched on in the article.
This is all really mind-blowing. Whatever happened to the old adage that a company's most valuable resources walk out the door at the end of each day? I've had my bad share of employers over the years but this takes the cake. No wonder there is a steady stream of talent out of the place, most of whom head to Google.
Eichenwald omitted a lot of Microsoft successes in his rather obvious pro-Apple bias, something I will touch on in my next blog post. But the stack ranking revelation alone leaves me wondering how the company can ever hope to attract talent or keep what it has, especially now that this is out and exposed to the whole world