Microsoft Corp. is discontinuing an employee ranking system which many believe is unfair because it forces managers to give a set proportion of workers a poor review, regardless of their actual performance.
“No more ratings,” read an email to Microsoft employees on Tuesday from Lisa Brummel, the company’s executive vice president for human resources, who said that the software maker was changing it performance review program to “better align with the goals of our One Microsoft strategy.”
A copy of the email which was shared to IDG News Service, also said Microsoft will stop its pre-determined targeted distribution rewards program and will provide managers with more flexibility in giving out rewards in a manner that reflects the performance of their teams and individuals.
A June 2013 article in the magazine Vanity Fair, the practice known as “stack ranking” was labeled a destructive process that prevented Microsoft from being more innovative.
The system compelled managers to give a predetermined percentage of employees in a team a top, fair or bad annual review, even if all team members were performing very well.
This resulted in workers competing with each other rather than with other companies, the Vanity Fair article said.
Brummel said there will now be greater focus on employee growth, teamwork and collaboration.