Ben Thompson, who used to work at Microsoft, floats some problems with summarily killing stack ranking:
What makes a decision – or a product, for that matter – a good one, is not the surface level question of whether or not it’s a good idea. Stack ranking2 stinks, and it was hurting Microsoft for years. But simply tossing it out the door without carefully considering every aspect of the decision, including who is making it, what is replacing it, and how it interacts with the other seismic changes at the company, threatens to convert a good idea into a bad decision, and another example of the lack of deep consideration that undermines so many of Microsoft’s initiatives.
He makes good points (as usual, sheesh, what is with that guy?), but assuming there is a process in place for performance reviews to be evaluated by the employee and the manager’s manager, I still think, yes, getting rid of a crappy policy is better than keeping one. Thompson knows better than I how it was implemented at Microsoft, but having worked someplace that went down this path, stack ranking had nothing to do with writing the reviews, it simply had to do with forcing them into a bell curve.
Unlike Thompson, I assume that this move did not come from Steve Ballmer but from the board.
Many managers may take the easy way out and give everyone about the same amount of compensation, which sure, prevents said manager from delivering really crappy news to the bottom of the curve, but unintentionally demoralizes the folks that are actually making a difference.
If you’re a manager and you’re not managing by providing your employees the proper incentives, then your manager should let you know you’re not doing your job. That’s how a normal review process works.
None of it is ever perfect in any organization. What you don’t want to do, however, is institutionalize the unfairness and I believe that’s what stack ranking does.