
Microsoft ditches the stack ranking system. Yahoo lays off 600 because of it - DanielRibeiro
http://www.infoq.com/news/2013/11/stack-ranking-microsoft-yahoo
======
DanielBMarkham
Good grief

"...Yahoo! has recently laid off about 600 employees based on a ranking system
introduced last year..."

No. Yahoo has laid off people because the business cannot support that number
of employees. Stack ranking is just the tool used to make the decision.

The problem for any good-sized business is this: in difficult times, how do we
make the decision who to lay off? People want to go on the warpath about
stack-ranking, and that's great, _but it doesn 't address the problem_.

So a story about why Yahoo is downsizing would be interesting. A story about
stack-ranking alternatives would be interesting. One mixing up the two
concepts in order just to keep some bullshit narrative alive about stack-
ranking? Just to get some reaction? Not so much.

I'm still waiting to hear what Microsoft has come up with to replace stack-
ranking, because there has to be some kind of plan. Instead, we seem to be on
a merry old witch hunt after any companies who dare to use the phrase "stack
ranking" in their employee evaluation policy manual. The greater discussion is
not advancing too well.

~~~
asdfologist
Exactly. I notice this pattern of thinking quite often on HN: X has some flaw
(according to shoddy armchair analysis and vague anecdotes), so X is terrible.
If you want to argue that X is bad, you should at least discuss an alternative
Y and make a convincing argument as to why Y is better than X. There are pros
and cons to everything.

~~~
spamizbad
> Exactly. I notice this pattern of thinking quite often on HN: X has some
> flaw (according to shoddy armchair analysis and vague anecdotes), so X is
> terrible.

Harvard Business School has studied employee performance evaluations and has
found them to be flawed:
[http://www.hbs.edu/faculty/Pages/item.aspx?num=44969](http://www.hbs.edu/faculty/Pages/item.aspx?num=44969)

------
bowlofpetunias
I don't see the point. Seems to me that the only scenario in which stack
ranking is actually efficient is exactly when you need to lay people off and
have to figure out who you'll miss the least.

Lay offs are never a nice stress free process, any system you use to determine
who to let go will suck badly for everyone involved.

~~~
altrego99
This is one glaring example of corporate stupidity.

I couldn't ever overlook the gross misunderstanding of statistics here. The
"bell curve" is an asymptotic distribution law, and even assuming that the
distribution of performance is indeed normal, it is outright idiotic to fit
the bell curve with as low as 10 people. The chance that no one out of 10
random people will be really at the lowest 5% of performance, is as high as
60%. The HR even uses an Excel sheet to even draw a normal distribution...

I have seen many good people's careers stopped in my farm (and it is a big
farm), because of this "bell curve".

~~~
bowlofpetunias
I yield to your superior knowledge of statistics (I have none), but that's not
the point.

Layoffs are about speed, not accuracy. The faster they're done, the less
damage they do. The only thing that matters besides the number of people to
lay off is not losing your _best_ people, which comes down to speed (the
longer the mess lasts, the more likely your best people will leave) and being
accurate enough to not accidentally lay off your best people.

Seems to me that stack racking, however awful it is ethically, emotionally and
statistically, at least covers that well enough.

~~~
PhasmaFelis
I'm not sure "it may wreck all our shit, but at least it wrecks our shit
_quickly_ " is a point in favor. Rather the opposite, really.

------
camus2
For those who know me , I hate to say "i told you so" but i've predicted mass
lay off coming to yahoo and it's not over. Their new ranking system is just an
excuse.

Since the beginning of Marissa's binge buying, the goal was only to pump the
stock up, not to make Yahoo actually relevant. There is no long term strategy
whatsoever.

~~~
laureny
Your analysis is correct but you're coming to the wrong conclusions.

It's clear that going in, Marissa needed to fire a lot of Yahoo employees, she
just needed to find a way to do that and she found two: 1) revoke remote
privileges and 2) stack ranking.

Once she is satisfied that she has gotten rid of all the underperformers, she
will most likely cancel these two policies.

And in the meantime, Yahoo is offering top dollars to hire new blood (ideally
coming from Google).

------
analog31
Stack ranking makes managers irrelevant to employee performance: The lowest
employee is going to get sacked, so there's no reason for the manager to work
on that person's performance. The highest employee doesn't need a manager. The
remaining middle can be dealt with next year.

Maybe stack ranking replaces low performers with high performers, but only if
you make managers irrelevant to the hiring process, because we keep hearing
that managers don't know how to hire.

All that's left is for the manager, once a year, turn in a ranking list.

I wonder if all of that could be automated. SRAAS. ;-)

Now, there remains a place for managers, because stack ranking is a
"guideline" and there is always some flexibility. So it's each manager's job
to negotiate the budget of rankings for their team. This is why I've commented
before that a vital factor is having a boss who is liked by others, and who
has the leadership ability to stand up for his or her team.

------
PhasmaFelis
> _several studies performed in the last years indicate that the bell-curve
> ranking system has a number of flaws._

Related studies have also recently confirmed that water is wet, the Pope is
Catholic, and _what the fuck is wrong with you people._

------
curiousDog
Ironically, Yahoo is still hiring. A friend of mine, a recent grad was offered
$135k base. That's on par with GOOG/FB and he's no stellar candidate either.
Looks like they could've rehired them into different areas without laying them
off.

~~~
asdfologist
I don't see how that's ironic. It's logically consistent for a CEO to desire
to layoff dead wood and simultaneously expand the company with strong hires.

~~~
bilbo0s
"...It's logically consistent for a CEO to desire to layoff dead wood and
simultaneously expand the company with strong hires..."

"...A friend of mine, a recent grad was offered $135k base... and he's no
stellar candidate either..."

???

I've been reserving judgement... but the more I hear... the more I wonder what
exactly the plan is at Yahoo.

~~~
asdfologist
The fact that he's not a "stellar candidate" says nothing about how he
compares with the people laid off. Also, this is a sample size of 1 - any
hiring process has false positives/negatives.

------
allochthon
Apart from all of the questions that arise from applying a single measure of
"performance" to individual contributors (and not managers) and assuming that
this index is distributed in a bell curve in small teams, stack ranking has an
even bigger failing. It assumes that the success of a company is due to
management carefully shaping the situation. I'm going to guess that really
successful companies are successful because employees are empowered to do what
they love, and management largely sees its role as playing enabling and
protecting functions rather than a shaping function.

Mid- and upper-management are liable to imagine that they have a big hand a
company's doing well, but my bet is that they have a much larger hand in a
company's doing poorly. The best managers are often ones that step back.

------
PeterisP
Stack ranking sucks if the 'bands' are enforced on a small team level. Sure,
your organization may well have 10% of people that noticeably underperform and
need to be identified and fired; but yahoo-style ranking doesn't implement
that.

Think of it from pure statistics viewpoint - if you put in a bag 10 red balls
and 90 green balls; and then grab handfuls of them to form "teams" \- you'll
get a bunch of teams with no underperformers and most likely a team where most
or all of them are underperformers. Put the same 'level' quota for each team -
and you'll get exactly what you deserve.

~~~
ProblemFactory
Teams are not formed randomly - competent people like working with other
competent people, and underperformers find safety among other underperformers.
Even an impersonal evaluation of entire teams as a whole would be more
accurate than a 10% firing quota for every team.

------
consultutah
The reason that I hate stack ranking is that I have to keep people around that
I would rank poorly rather than simply letting them go because I don't want
better people to be punished/limited by it.

------
crassus
This may make sense for a short time at a place like Yahoo! If Marissa wants
to raise the average for Yahoo employees, then the first step is to raise
hiring standards and cut dead weight. The danger is that stack ranking drives
away high performers who are allergic to BS, so it should only be practiced
for a year or two.

~~~
od2m
Yep, the truly brilliant folks are very bad at social skills / marketing
themselves. They're usually introverts so although they're making critical
contributions THEY'RE NOT RUNNING AROUND TELLING EVERYONE HOW GREAT THEY ARE.

Generally if someone is telling me how great they are, I assume they're not.

~~~
jhspaybar
Is there research to this stereotype of "smart people are introverts"?
Especially in highly collaborative environments like software engineering.
Being an introvert and an asshole seems completely opposite to asking for,
receiving, and giving help. My experience tells me this is bad in the
environment we work in...

~~~
od2m
First of all, introverts are not "assholes" \-- they're just different. About
one quarter of the population are introverts but about half of all "gifted"
people are introverts. Most introverts learn to cope in an extrovert world by
becoming "actors" \-- learning how to interact with extroverts -- but some do
not.

Introverts have physically different brain organizations and may grasp for
words at times. They tend to dislike self promotion -- they perceive it as
fake, and also dislike having attention drawn to them. They generally think a
lot and say very little. They tend to focus on details quite a bit.

Introversion isn't a single dimensional thing, it's a cluster of dozens of
tendencies brought about by this alternate brain organization.

Source: The Introvert Advantage (book).

