I was one of those who was laid-off, or fired, or whatever you want to call it. I've been really confused over the last week because the reasons for my termination were pretty vague. But wow, after reading that, so many things make sense now.
One of the areas this type of a bell-curve system falls apart is for highly specialized and well-qualified teams, such as the one I was working on. Who knows, maybe I was a poor employee, but after all the raises, accolades, and the promotion I received (by my firing manager), I'd like to think that wasn't the case and it was just a manager put in a tough spot.
Regardless, it was a nice run and the job market is great. I'm taking a bit of time off, but if you are a company in SF and looking for someone with lots of JavaScript, Node.js, and frontend experience at startups and (of course) big companies, links are in my profile.
Worth noting that I was promoted to that team due to being an overachiever on a lower expectation team. So here's the issue... I could have stayed with the old team and ensured my job security, but instead I chose to go with a tougher challenge and surround myself with smarter people to learn from, but I ended up stack ranked out by the very manager who promoted me in the first place.
Ah well. Despite what happened, it was the correct career move and I'd do it again.
That's a pretty poisonous attitude, since half the company isn't going to be in the top half of their team. And honestly, in my experience, most people have no idea whether they are at the 50% point or the 15% point.
What's poisonous about it? It's the blunt truth. In stack ranking, you don't have to be the best employee, you just can't be in the bottom 15%. If you get laid off, it means you're in the bottom 15%. There's nothing poisonous about that assertion.
It's like they say about escaping a hungry bear, you don't have the be the fastest runner to survive, you just have to be the second slowest runner.
I liked your spirit...management is one shit where the board's decision or the management's decision is responsible for a company's failure..what these guys were doing when they were hiring or buying companies...is employees responsible for the failures...
In any company's failure, the first one to blame is the management because they failed and that's why a lay off has to be done..I had always felt that layoff is an easy way for a CEO or the management to wash off their hands rather than trying to solve the problem at hand..
A leader is someone who leads his team and makes other perform...
In management, I have found most people just licking the bosses above them...and i hate these bunch...in such a management structure, one actually creates a bunch of followers who are unfortunately called managers..
There are exceptions...and they are very few...and these are actual leaders who have the power to turn things around..
If you're a manager in a stack-ranking organization like this, in this market, why not take a stand? Refuse to classify team members who are not actually "occasionally misses" as such. If it's straight-up stack ranking, give everyone a tie for 3rd place or something.
What's the worst thing that happens? You get let go? What a great way to get let go from a dysfunctional company.
While I generally agree with you that stack-ranking is a terrible idea for software companies[1], my guess is that the goal here is "lay off a bunch of low performers who were hired over the last 10 years". How do you think they should handle that? Managers, generally speaking, are never going to rate their team member down if that means their team will be effected by the layoff.
- Trying to bulk-remove low performers is doomed to failure, don't try
- Bulk-remove on something else, like what projects you worked on instead of your rating
- Let them rank as high as they want, then let the bottom N% go regardless of whether they were technically rated "meets expectations"
- Some solution I'm not seeing?
This is an honest question -- I've never run (or worked for a long time) a company as big as Yahoo.
At Twitch, this isn't a problem because you don't have many layers of management and the number of people is small, so it's easier to get consensus on what acceptable performance is across the entire organization. But I really have no idea how you'd manage that somewhere like Yahoo.
If this isn't a one-time thing and Yahoo is moving to a permanent stack-ranking system...nevermind everything I said. But stack-ranking seems like a reasonable one-time way to cut deadwood in a very large company.
[1] And maybe in general, I'm just only experienced with software companies.
You are absolutely right, and that is what Jack Welch intended when he first implemented stack ranking at GE in the early 90s. At the time GE was overly large with an ossified bureaucracy and thousands, if not tens of thousands, of deadwood employes who were just coasting along occupying a chair. It was killing the company. Stack ranking was the answer to forcing managers to make the hard decisions about who was really helping and who was just collecting a paycheck. It worked very well.
This was only supposed to last as long as required to turn GE around. Like all good fads in the business world, though, it was taken too far by the MBA crowd. They now see stack ranking as a great permanent solution to deadwood. They fail to recognize that: 1) all organizations have a certain minimum amount of deadwood, as a function of their size; 2) once an organization approaches its natural level of deadwood, stack ranking hurts more than it helps.
how do you apply stack ranking effectively if most of the dead weight is in the branches (middle management) but scoring heavily weights the leaves (workers) of an organization?
My feeling is that generally a group knows who sucks or is disruptive, and this is probably the most reliable data source. That's your scoring criteria. Other modifications I might make:
1. flatten the org chart for the purposes of ranking.
2. employees rank best and worst fellow employees, i.e. up to 10 best, up to 10 worst.
3. ranking is two-dimensional to distinguish between "this person is terrible and should be fired" from "this person isn't a good fit/being utilized well and should be moved".
4. Do the above and see if the results can be used to determine who should be fired.
5. If you want to repeat this process every year don't set forced quotas.
Agree. I am sure Yahoo has some cruft at the lower levels, but I would imagine that the real problems are in middle management, where many of the worst are the most adept at playing the game with the higher ups after years of practice. I really do not know of any great ways of solving this, but I have seen the problem many times in companies of similar size.
From what I remember, Microsoft has the employees rank their peers. 360 feedback. That's part of what then poisons the atmosphere, especially since of 10, the sucker in last place often/always has to leave. People implicitly then make pacts based often on politics... But at least it's annual rather than quarterly.
yeah, no system is perfect, but the modifications I suggested I think would address these issues to large extent. For example, I suggested that employees would rank their peers on three scales (good, bad, misused) instead of with "scores". An actual score would hopefully come from aggregating the whole company and doing some analysis. Hopefully by having some smart people try to put together an algorithm that seems "fair".
Also, if I remember correctly, MS employees might have had some say in their peer's rank, but then groups scores would be merged with other groups by having managers "calibrate" with each other, which more than likely gives the manager a lot of control in the final outcome.
This is not a condemnation but people often like to invent perfect employee performance systems, as you have done here, and it is akin to people writing their own cryptography. There is evidence-based research out there - look for papers by Elaine D. Pulakos for example. My understanding is that no system works in and of itself and training managers to get the most out of their people is probably the best thing any firm can do.
how do you apply stack ranking effectively if most of the dead weight is in the branches (middle management) but scoring heavily weights the leaves (workers) of an organization?
I'd make the system ignore the scores of any bottom ranked management.
1) all organizations have a certain minimum amount of deadwood, as a function of their size; 2) once an organization approaches its natural level of deadwood, stack ranking hurts more than it helps.
Like fingernails. You never cut the fingernail right up to the quick, you always leave a little bit behind...
When Jobs rejoined Apple there were huge layoffs and a cleaning up of projects. But it was never permanent, he struck hard and it was clean. After that the company could focus on innovating and not fear politics of stack ranking. Can you imagine if he kept that system in play, would Apple have been as successful?
Keep in mind that the whole office still had the fear of Steve Ranking, i.e. the fact that Steve Jobs was a dictatorial asshole who just so happened to also have good design sense. More importantly it's very dangerous to start generalizing from Apple to the whole technology industry, considering that you'll probably convince a number of otherwise underperforming companies that their best bet is to have an asshole CEO.
You state your two final assertions as if they're universal laws. I'm not saying you're incorrect -- they certainly sound valid to me -- but can you point to any research to back up your claims?
As Yahoo is not on the verge of bankruptcy, I'd say start with a headcount freeze rather than immediate layoffs. That immediately changes the tone from "oops, you fell below an arbitrary line that makes no sense for this team", while providing an incentive to lay off true under-performers because you can replace them with better people.
Then start making individualized assessments of projects/teams. Start with the larger ones, where you can hopefully make meaningful cuts with the least disruption. Make individual judgements as to whether the team is pulling its weight or needs to be shrunk (or eliminated entirely).
Where layoffs from a team are forced, offer transfers to other teams, which can evaluate whether they would be better served by replacing their lowest performers with these otherwise-doomed employees.
Do you need an excuse to lay them off? Oracle laid off thousands of employees after their Peoplesoft merger (many of them in Oracle Apps). The decision on whom to cut (as I understand from friends who were in management at both companies) was a long and drawn out effort and involved many levels of management meetings.
But... do it once and leave it be (maybe revisiting in a few years) Doing it every quarter (as implied by the QPR term) or even every year is an organizational forced-march.
Maybe you could get away with that at a hedge fund or other highly profitable venture (though in those places you can usually do this by giving/withholding bonuses, etc)
"Hence we may learn the lesson that on seizing a state, the usurper should make haste to inflict what injuries he must, at a stroke, that he may not have to renew them daily, but be enabled by their discontinuance to reassure men’s minds, and afterwards win them over by benefits. Whosoever, either through timidity or from following bad counsels, adopts a contrary course, must keep the sword always drawn, and can put no trust in his subjects, who suffering from continued and constantly renewed severities, will never yield him their confidence. Injuries, therefore, should be inflicted all at once, that their ill savour being less lasting may the less offend; whereas, benefits should be conferred little by little, that so they may be more fully relished."
Most of the time, in companies like this the dead-weight is actually among the middle managers. Pruning the leaves is just bleeding talent. I think a better solution would be to do a one-time merciless chop-off of managers/people who don't own/maintain a sufficiently large chunk of a product or are part of an org losing money. This type of system just creates a toxic environment within the company and brings down employee morale. Not to mention, new talent would also start shying away from the company
>Managers, generally speaking, are never going to rate their team member down if that means their team will be effected by the layoff.
Where I work they forced all the managers to give up an employee for the Y2K team. Of course they all recommended their least productive team member. Then the entire team was laid off in mid-2000.
If the goal is to lay off 10%, then tell every rating manager that he has to lay off 10% of his direct reports, modulo a limited amount of horse trading for true stars.
I believe it's a 'miss' for the manager if they can't do the performance reviews the right way.
I worked with two folks that had previously worked at Intel. The same procedure was implemented there. There was a top 10%, a middle 80%, and a bottom 10%. This isn't a problem when working on a team of 10 to 20, but you certainly don't want to be on a team of 3 to 4. In that case, someone has to be the top and someone has to be the bottom. Once you are on the bottom once it's pretty much a 'start looking' situation.
These types of systems have their obvious drawbacks. You don't want to work with good people because the better they are the bigger chance that you'll end up on the lower end.
Yeah, it's clear to me what the disincentive is. On the other hand, maybe call their bluff. If you're the manager willing to go to bat for your team and take a stand against insane performance measurement systems, there's a decent chance they don't want to lose you anyways.
My read is that with the situation Yahoo is in now, that's exactly the type of manager they want to let go. From their perspective, those are the managers who don't listen to the directions they're getting from executive management.
It's hard to turn around a company if you tell people to do something and nobody does it.
You would be surprised. Some big companies are so broken that these processes are like a steamroller. If you're in management at one of these places, do not assume that because you are valuable and in a profit center you will be able to buck the trend. Better to just start looking for other opportunities now.
Large companies that use forced ranking: you will reap the fruits of your broken process after a few years.
The typical solution (although I am not a manager) is to bucket up staff until you reach some predetermined size (i.e., collate staff upwards in the hierarchy until you reach something like 100 people). This still really only works if you have a large population doing similar work, and it just so happens that they're all divided into small teams. You probably need to still do level setting (e.g., this part of the org worked on a harder/easier problem than this other part of the org). Not an easy problem to solve.
With that sort of distribution, there have to be at least 7 people on a given team to have a >50% of a single bottom 10% outlier (0.9^6 = 0.53). Bell curves only work well with large sample sizes.
My company does the same thing, and I can tell you exactly why managers don't refuse things like this.
They only exist to serve those above them. The entire purpose of their existence (and pay) is to do what they're told. They know it. Their bosses know it. It's inconceivable that any of them would do anything like you propose, because that goes against how they got where they are in the first place.
I only ask because when I was younger and hadn't been a manager, I would have thought the same exact thing (I remember dismissing managers as "shiny shoes").
Now that I do manage, I realize the multiple tensions and forces pulling and pushing on managers. Some of them include: making employees happy, hitting targets they've committed to, doing their own work, and interacting with peers to move the company forward.
If you have been a manager, I'd be interested to hear how you felt about "exist[ing] only to serve those above" you. Seems like a pretty tough existence.
On the other hand there are plenty of managers who would love to work in such a system because it provides perfect cover for them when they want to really screw with employees, scapegoat others for their own failings, etc. One manager at a previous employer at mine would be particularly interested in this kind of management style; he practiced it well enough on his own.
Also, if this internal board is anonymous I'll eat my dirty underwear. I guarantee you the "L2 and L3 executives" (and probably the department heads) can attach names to posts, or have the means to order it done, if they really want to.
there are no "stand taking" heroes for one. Or at least doing it publicly and conspicuously with big noise seems to be not considered a good style in society here(just my observation for 10+ years here) What i've seen a manager, good person, does when he is forced to pigeonhole somebody into incorrect category, it is to write in plain English in performance review form - "performance is at the grade X, assigning grade Y because of required grade allocation"
I'm still confused by this part “in order to meet the bell curve”. Sounds like they are forcefully ranking people poorly regardless of their performance. That doesn't make sense to me.
> Sounds like they are forcefully ranking people poorly regardless of their performance.
That is exactly what is done, and is why stack ranking is both abhorrent and dysfunctional (it incentivises in-team politics and sniping, each team member tries to ensure he's not the one in the bottom slot).
It also incentivises top employees to not work together and to not be put in the same team, as it decreases their chance of being in the "superior" rung and increases their chance of being in the bottom one, something more or less impossible if they're clearly the top of their own rank-and-file team.
The system is so retarded for obvious reasons. I guess the only reason top executives choose for this system is that it forces:
- a very competitive attitude among employees (for better or worse).
- managers to remove "rotten apples" from the company, even if it means occasionally some good people have to leave.
Still, to me the benefits don't seem to outweigh the costs. The first point could result in back-stabbing politics; the 2nd point in removing extremely valuable employees which might demoralise teams.
In my career I've only met maybe 1 or 2 managers who were actually very good at their jobs and would be willing to stand on principle rather than crumble at the first sign of pressure from higher up. Most managers are just not very good in general.
And as your example illustrates those that are very good tend to end up going elsewhere, because why bother putting up with bullshit when you have the talent to avoid it?
Sounds like the managers didn't realize the weight of their "occasional misses" – if they had, they might have made a stand at the time of the evaluation.
These types of forced ranking systems are very tough. Microsoft has had a lot of complaints about there's. GE, on the other hand, has had success with theirs. I've seen them work successfully at large firms where they were ingrained, and the companies had other cultural norms to increase teamwork. I've seen it flop at a few software firms.
What they're good for:
- Forcing managers to make hard decisions and give real feedback. (You can't just tell everyone "You're doing fine.")
- Highlighting who at the bottom should be let go, and who a level below should replace them. (In most firms, the top 10% at a given level outperforms the bottom 10% at the level above them)
- Providing internal guidance for larger layoffs.
- Encouraging constant trimming to avoid those larger layoffs.
The problems of these systems are numerous though:
- It can discourage teams of superstars from working together on large projects. "What if only 1 or 2 out of us can be ranked high?"
- It can encourage selfish behavior and infighting if there aren't other counterbalancing forces.
- There is frequently disagreement for anyone not in the chosen group.
- Much of the differentiation is based on managers ability to fight for their employees, rather than employees actual ability.
It will be interesting to see how this plays out. In Marissa's defense, she wasn't hired to continue "Business as usual".
"In most firms, the top 10% at a given level outperforms the bottom 10% at the level above them." This is a really key point.
This dovetails with another fact of corporate life: over time, the median performance of any level degrades to the worst performer at that level. "I deserve to be promoted to VP. Look at Joe the VP, I'm obviously better than he is."
Any company that isn't regularly clearing out the bottom 10% is fooling itself about both its hiring competence and its management skills.
Any employee who can't get judged to be in the upper 90% of any organization isn't nearly as good as he/she thinks.
It's no different from a restaurant thinking, "If the economy doesn't improve, which 2 of my 20 waiters and waitresses will I let go first? I should let them know they're on the bubble."
Or perhaps more abstractly an investor saying, "I have 20 investments. If I need cash, which 2 should I sell?"
I worked at Yahoo, and quite frankly, Yahoo needs to go through a few years of culling the bottom 10% like this. After several iterations of this, it could be a great company again.
What Mayer is saying is that she is willing to sacrifice those employees that are at the lower boundaries of acceptable, in order to make more room for the top 85%
And quite frankly, the managers that are complaining about having to put people at the lower boundaries are highly likely to be underperforming as well. When I was there, it was mostly filled with bloated and lazy employees.
1. if the company moves to stack ranking rather than just does a cull, it's a bad move
2. stack ranking works at the team level, not at the company level. If a team is full of morons and the next one is full of awesome developers, stack ranking will keep 90% of the morons and cull 10% of the good devs.
"stack ranking works at the team level, not at the company level. If a team is full of morons and the next one is full of awesome developers, stack ranking will keep 90% of the morons and cull 10% of the good devs."
That may be a risk they are willing to take. They are probably firing some good people. If a team is doing great and they fire someone from that team because SOMEONE has to get fired, then that's poisonous. But if someone isn't right for the job, but because the job is badly defined, or poorly managed, or the goals are unreasonable, or whatever... it does definitely suck for the person being fired, but losing that employee is a reasonable cost for Yahoo.
Yup. They are in kind of a "bet-the-company" stage right now. They've got a problem, they've got no perfect solutions, and if they sit about just twiddling their thumbs they will go under.
I doubt it affects recruiting very much because most people will be convinced that they'll be in the top 10%, or that they're being hired specifically to replace someone in the bottom 10%.
I am probably not in the top 10 percent of developers at this point, but I consider myself a good developer, and definitely a great problem solver and an all-round asset to any team. It is most unlikely I will even consider a company that uses stacked ranking, and this is perhaps the primary criterion I will look at. For me it is an important indicator that there will be a dysfunctional, damaged culture, and subtle or overt politics.
I think you overestimate the number of prospective employees who make their ultimate decision whether or not to work at a company based off of stack-ranking.
I turned down an offer from Microsoft, in substantial part, due to their evaluation system and the resulting "competitiveness" of the teams. (The competitiveness was self-admitted during the interview when I asked about the team culture)
I'm not a "star" developer by any means (although I consider myself competent), and I was frankly very concerned that they might be bringing me on to be the "scapegoat" that could be rated underperforming to save the rest of the team.
Exactly. It was like ending work-from-home arrangements: probably a negative move for a generic company in a vacuum, but a reasonable risk for a company in trouble with Yahoo's specific issues.
If the company is performing well in a couple of years, they can revisit their policies and loosen up on things like this, because if the company is performing well, or probably means they've fixed most of their workforce issues anyway.
> In 1981, Ford's sales were falling. Between 1979 and 1982, Ford had incurred $3 billion in losses. Ford's newly appointed Division Quality Manager, John A. Manoogian, was charged with recruiting Deming to help jump-start a quality movement at Ford.[19] Deming questioned the company's culture and the way its managers operated. To Ford's surprise, Deming talked not about quality but about management. He told Ford that management actions were responsible for 85% of all problems in developing better cars. In 1986, Ford came out with a profitable line of cars, the Taurus-Sable line. In a letter to Autoweek Magazine, Donald Petersen, then Ford chairman, said, "We are moving toward building a quality culture at Ford and the many changes that have been taking place here have their roots directly in Deming's teachings."[20] By 1986, Ford had become the most profitable American auto company. For the first time since the 1920s, its earnings had exceeded those of arch rival General Motors (GM). Ford had come to lead the American automobile industry in improvements. Ford's following years' earnings confirmed that its success was not a fluke, for its earnings continued to exceed GM and Chrysler's.
I'm trying to tie this to the original article. Is the idea that performance reviews are inconsistent to systemic management improvements ala Deming? My understanding is he was against the annual review.
... which is why you italicized the 85% bit? But one is a percentage of people, and the other a percentage of problems. If I'm misunderstanding, it would be helpful if you explained further.
Sorry, it's difficult to take that wikipedia article and make a soundbite out of it. Elsewhere in the source you'll see this:
> Placing blame on workforces who are only responsible for 15% of mistakes where the system designed by management is responsible for 85% of the unintended consequences
I didn't use that, because it doesn't have any context with it.
I work for a company with stack ranking. and was forced to stack-rank my team.
The success of this system depends on 3 things
a ) qualifications of the managers doing stack ranking
b ) perception management of the employees being ranked.
c ) quality (impact and sophistication) of the projects people are doing
( a ) is hard to come by in middle-management ranks (because very few talents individuals stay in those ranks -- they either move up, or move out).
( b ) perception management (essentially ability to blame others, to create inflated perception of your contribution) -- is a horrible thing to do for a technology company who benefits from having introverts who just love to program.
Those will often fall the victim to the 'smoke and mirror specialists'.
( c ) can simply be traced to poor up stream decisions/conditions.
---- -
But how to actually deal with accumulated incompetency (as it happens especially in companies that must grow very fast) ?
--- -
The answers I heard here would work but in combination
a) stack-rank projects
b) within project evaluate performance of project's stakeholders/initiators in addition to the project team
c) stack-rank all employees by using peer-and-outsider model that takes up 40% of the overall rank
(so that if an employee has excellent enteprise impact, but an incompetent manager, as noted earlier, -- he/she will not be totally dependent on that manager's score)...
And that also builds up better team work.
Instead of deciding which projects are not paying off and cutting them, cut employees across all projects, regardless of how well they perform. Similar to the budgetary sequester backed into by the US government.
It is at the surface. I don't think it's commonly implemented that purely though. There will be projects that are failing and they will have, if they already haven't had, tougher cuts. There will be projects that are succeeding and they will get more people. Then there will be projects that are just coasting.. Mayer is way too smart to just sequester the staff like that. On paper you can't really say it's being done any differently though.
Every time this comes up, it's treated like kryptonite. What's better? I can agree if this is the ONLY thing they've got going, then yeah it's terrible and the whole company probably is in a lot of trouble. Thing is it'll be a policy of sorts but great managers of great teams will go to the mat and not have guys in the bottom 10%, that stuff happens in big corporations. To that, when you've got an elite team doing elite work, pretty much everyone knows it and usually they are scared to mess with it. Sometimes the hard choice is made and whole teams are shut down because they aren't performing or their project isn't, some times it's their fault and sometimes it was someone else' bad idea.
Should they have peers rank peers? What's better? I'm seriously asking, companies have better and lesser performers, companies of a certain size almost always have people that simply aren't good. How do you get rid of them and make the whole company stronger? Some sort of measurable business objective combined with manager ranking and peer ranking?
There will be projects that are succeeding and they will get more people.
Not necessarily. I've seen projects that were profit centers deprioritized for other projects that were moonshots. Due to forced ranking, this resulted in the important but less sexy project getting fewer of the nice evaluations to distribute across the group and the loss of important people. It was ultimately an own-goal on the company's part, but the whole process was too big for any one person to prevent it. It was like watching a slow train wreck.
How do you get rid of them and make the whole company stronger?
This is a good question. I don't have any clear answers, myself. I'm inclined to think a good place to start is a hiring freeze in the groups that are not contributing and then letting them shrink by attrition followed by a reorg once the project is too understaffed to be competitive.
Not quite. I've been through one like that, and it wasn't anything like as ugly. The line was, 'we haven't any fat, but our costs are too high so weren't going to have to cut meat'. 10% cut across the board, whoever happened to have less crucial work on at the time. Unpleasant, but a one time shot which didn't affect morale going forwards.
Dont worry, Yahoo will fire a lot of people soon.
Yahoo "bought a lot of buzz" to drive its stock up so big investors can cash in, they will trim their workforce soon,
I know this sounds harsh, and this is pure conjecture on my part, but the way I see it is that Marissa Mayer is on a 5 year contract and after that she is out of there, regardless of what state Yahoo is in.
If the company is a mess in 5 years time she can blame it on the culture which was resistant to change. She will simply jump onto the next gravy train via her big investor and board-room friends.
The WSJ and NYT say her total compensation over this period will be at least $100m+. All she has to do is sit tight, look as though she's busy, and hopefully keep the share price up to maximize her share options.
Considering that the company has burned through multiple CEOs already anyway, I think the case that the company was doomed if she didn't try some major moves is both obvious and compelling.
The thing I like is that she's trying both the carrot and the stick at the same time: trying to make Yahoo a better place to work with Google-style amenities, while also making staff more accountable and slashing poor performers.
She's also focusing the company much more heavily on mobile which is both obvious and necessary, but which wasn't taken nearly as seriously by previous execs.
I don't know whether it will work or not, but this doesn't seem like a "marking time" strategy at all.
I don't know about Yahoo, but what I normally associate with such drives as this, isn't actually keeping the most productive team members, but cutting pay costs. Hire new people that do the same job that people you let go are doing now, but start them out at the bottom of the pay range.
If you can cut salaries 20% and take less than a 20% cut in revenue (note, revenue not productivity), you're up in profits, and managers gets bonuses. I don't think it makes sense if the goal is maximum productivity or highest quality of development -- but it'll boost quarterly results.
I have no idea what the pay structure looks like in yahoo (or comparable companies) -- what does a talented recent graduate get vs a 20 year veteran developer?
Whoa what? “Mayer, in fact, tried to address the issue yesterday morning in a Q&A, which she began by quoting her favorite children’s book about the value of experience.”
How do you start addressing concerns of working professionals by quoting a children's book?
I have had 2 adults, on separate occasions, quote from The Little Prince by Antoine de Saint-Exupéry they read as children. If the shoe fits, I have no problem with it.
Children's books are often written to convey a general pattern of human behavior. Teamwork, sharing, empathy, etc. It's not a bad starting point for a conversation, because it helps everyone see the pattern you're talking about quickly. Just make sure to follow up with actual details to fill in the generic outline!
I worked at IBM Research for 6 years and they have absolutely the best way to achieve the best possible productivity from all employees:
The secret?
"Trust Your People".
I was a contractor, working offsite, from another country.
I used to come to IBM Research facility once a month and we had quick discussion: "Should we add this? Ok. Let this guy (me) do that". After that I disappear for a month or two, charge IBM hourly and then present a report of what was done.
Result: we had the best enterprise security product on the market that actually generated plenty of revenues for the company.
Hats off to IBM and to SRW, JM, JK, BA, and of course DC!
Granted we were smaller team - 20 people in total or so.
Lots of new people were coming in and doing their best to deliver their best.
There was something spiritual about this, but it worked like a charm.
We have an internal blog at my company, which is an admittedly small telco. People often post honest thoughts, which are often complaining about the company.
You would think of all companies that could trace a DHCP IP to a logged in user it would be a telco. Not so.
Things are so dysfunctional around here it would take a week to attempt to do such a thing, and it wouldn't be accurate. There are so many other things going on it would never be a priority anyway.
The last place i'd be bitching about my work, performance, or someone else's performance is somewhere that's persistent. It hits home when its face to face.
This is a pretty popular thing at many large companies. Everyone somehow wants to hire the cream of the crop, yet there are only so many cream of the crop candidates.
My own experience is that after a couple of rounds of these layoffs, most of the fat is cut from a lot of teams. After that you start knocking off productive people.
I'd be more impressed by someone who invigorated their workforce and then selectively cut people after they figured out who wasn't working out. Choosing a random manager assigned number that wasn't specifically requested to be a ritual offering of headcount isn't very smart. It'll bite you in the ass eventually when productive people actually end up leaving because of the work environment.
> This is a pretty popular thing at many large companies. Everyone somehow wants to hire the cream of the crop, yet there are only so many cream of the crop candidates.
I think in some places it's not so much the desire to hire the cream of the crop, but a manager or managers wanting to believe that by hiring only the cream of the crop, they are then the cream of their crop. As a side effect, it helps them maintain an erection.
If you read "Straight From the Gut" by Jack Welch, you would know that this is standard practice that is supposed to weed out the bottom 10% every year.
The "GE Way" was to keep pruning from the bottom, and yes, it would mean that sometimes decent performers would get cut. In the book, there's an anecdote about how at some point, groups would take on crappy workers, just so that they could fire them for the yearly purge.
> The "GE Way" was to keep pruning from the bottom, and yes, it would mean that sometimes decent performers would get cut. In the book, there's an anecdote about how at some point, groups would take on crappy workers, just so that they could fire them for the yearly purge.
How is that something that should be emulated? Seems like a tremendous waste of resources to me.
In theory, a system like this could work much better if those "bell" rankings were only forced on teams which aren't performing well (as a team). This would both encourage teamwork and lower the risk to let very good people go only because they're in an exceptional team.
In the documentary 'Enron: The Smartest Guys in the Room', it mentioned that the company had a "rank-and-yank" system, whereby annually everyone would rank everyone else. Those ranked in the top 10% would be promoted, and those in the bottom 10% would be let go. One guy commented "I don't know a successful company that fires 10% of its employees every year".
Isn't this the system Microsoft is using that has created such huge problems for the company? There was that Vanity Fair article recently that talked about what a mess the product teams are at Microsoft. It blamed the stack rankings in part for creating a hostile environment where nothing could get done. Nobody collaborates because they want to come out on top of those rankings, and some even go so far as to sabotage their co-workers to stay atop the rankings.
I seem to recall the article suggesting that the only place stack ranking ever worked was GE.
Here's the deal. As an employee with boots on the ground, you're usually the first to see this sort of stuff coming a hundred miles away. Why anybody would put up with this BS is completely beyond me. If you can get a job at Yahoo, I'm pretty sure you shouldn't have any problem getting another well paying job.
I was in a pretty large corporation and they started doing this and a ton of their top developers started leaving in droves. I'm talking 10 a week, and not entry level guys. We're talking senior BA's, developers and engineers when it was at its worst. They had a turn over rate in the 90% range. After 6 months of not being able to do anything because they were in a constant training mode, a bunch of directors and middle managers got axed and they took a different approach. It takes a lot to move the needle, but when it does, it will make a difference.
Kara Swisher: She's clearly in the monkey quadrant.
On the topic of the chart: why would you ever work for a place why 85% are structually constrained to underperform or be average? If 100% of the empolyees start out the 15% "Target Hires", in a single generatino they have 6/7 failure rate of performing to their potential? Makes no sense if you're actually any good.
C'mon. Right or wrong, everyone knows the "no working from home" policy was a way for Y! to do a mass layoff without having it look like one to the street. This is merely an extension of the same policy. Mayer can afford to make a lot of mistakes. It's not her dime after all. So she will make them.
This suggests there's a major problem in the mid-level management that's communicating the message. Telling a front-line manager to put someone in a bucket to meet the quota results in bad feelings, poor decisions that lead to loss of talent and bad publicity.
The alternative doesn't have to be abolishing stack ranking. The manager's manager should instead ask for justification and help the manager raise standards if they are too low. If not, he should repeat the same process with his manager. The +-3% variance indicates that the executive team expected this to happen. Since the feedback indicates that it's not happening in some (many) cases, hopefully this has triggered top-down conversations on the right way to implement.
When it comes to employee ratings, absolute vs. relative is a red herring. Both lead to adverse outcomes. With the more common absolute ratings, managers have an incentive to rate everyone highly, so people who work for honest managers get screwed. With relative ratings, the weakest members of the strongest teams get screwed. Rating employees just doesn't work unless the departments are also rated. If you know the relative strength of each department then you can adjust the ratings of its members accordingly. There's still a serious question of what you do with that information, but at least then it won't be totally distorted by the differences between teams and managers.
It would be interesting to look at companies with stack ranking and see if any objective performance measure is a significantly better predictor of a layoff than: 1) A random number generator; 2) the personality of your boss.
It seems to me there are two problems with this system. One is that you are grading on the curve so a "less good" but still good employee is getting fired. The other is that the only person doing the evaluating is the employee's manager.
I would propose a system where there is an absolute, not relative, scoring method. Pick 10 criteria and score them with 1 - 10 points. Set a minimum score for continued employment, say 70 points.
I would also crowd-source the reviews. Not just the manager, but peers and people that report to the employee would all give a review. Then take the average review score.
What difference does it make? If your committed to reducing an organisation by X%, then a certain number of people are going to be fired. And it makes sense they are the lowest performing percentile.
So maybe some people were rated as "misses" when they weren't, but they were still the lowest ranked employee in their unit. Would this argument be mute if they were ranked "least effective" instead?
> If your committed to reducing an organisation by X%, then a certain number of people are going to be fired. And it makes sense they are the lowest performing percentile.
It may make sense to reduce the number of employees. If you chose to do so, it'd be great if you could keep your (relatively) "best" and fire your "worst". The problem is that it's really, really hard to measure how good your employees are. It's even hard to define what a "good" employee is. Especially, perhaps, in a large company.
Take YUI, for instance. How much does someone working in localization of YUI contribute to quarterly revenue? Is he or she more valuable than the person responsible for selling ads? How about the community manager for the Traffic Webserver? How much revenue does he or she contribute? Are the these roles even comparable?
I wonder how things would look if they went by seniority, and simply fired the last 10% to join (maybe with the exception of certain "specialists", like the CEO... ).
> The problem is that it's really, really hard to measure how good your employees are. It's even hard to define what a "good" employee is. Especially, perhaps, in a large company.
At a company level that is absolutely correct. I think it supports the notion of firing by team - if anyone can measure the worth of an employee, it is their direct line manager, who is responsible for giving them work and judging the timeliness and quality of the outcome. However, as this "measure" is essentially incomparable between teams, it can't be effectively extrapolated to form a company wide view of the "bottom 10%". Asking each manager to get rid of their least effective employee both spreads the cuts evenly across skill sets, while ensuring that the measure of employee worth is being made by the most qualified person to do so.
> I wonder how things would look if they went by seniority, and simply fired the last 10% to join
Well, like firing by team, it is just another arbitrary measure. But I think I would rather an arbitrary measure that at least tries to take into account employee worth rather than when they joined.
> I wonder how things would look if they went by seniority, and simply fired the last 10% to join
It would look like a company that would have a terrible time hiring anyone decent, perhaps ever again.
Who would want to volunteer to be the most likely to be let go, especially given that you'd stay at risk round after round (if the hiring after you was able to absorb 100% of the next layoff, you'd still end up the lowest tenured employee). Ossified has-beens isn't a comfortable or profitable staffing model.
Firing the bottom 10% of performers at a company with the size and problems of Yahoo makes perfect sense.
However, organizing such a company into teams, and then firing the bottom 10% of every team, is a terrible idea, and it will not produce even remotely the same results. That's doubly true if not everyone is even subject to the policy (e.g. first-line or second-line managers).
Think of it this way: if you selected the bottom 10% of a company, would the results always have exactly 10% of each team? Of course not. Stack ranking at a whole-company level, or to a rough approximation at a divisional level, can work just fine. Stack ranking within teams or even within small groups of teams is a terrible idea.
Nice in theory, just doesn't work in practice. There are two main problems with company or even divisional stacking:
One, inter-team comparative rankings are essentially meaningless. Imagine you have two teams of roughly equal competence. When asked to rank employees one manager is a bit of a soft touch and gives all his team members good-high rankings. The other is a bit honest and ranks most in the middle, with some low and some high. Some managers might be weak, others lazy, or may simply have a difference understanding of the rankings to other managers. The result is that the group people who get let go are arbitrarily determined by incomparable manager rankings - when you look at it this way, forcing every manager to fire their least effective employee is a blunt, but fairer approach. Of course if you have some magic formula to truly discover the bottom 10% of an entire company...maybe in a call center where everyone can be measured by calls/day...but in a software company what would you do? Measure people by KLOCs? That craziness ended in the 80s (except maybe in IBM). At the end of the day manager rankings (and perhaps peer rankings like MS) are all you have - and as they are essentially incomparable, what else can you do? If you have a better way, you should start a management consulting firm.
Two, when a company is engaging on a total staff reduction, it needs to spread the cuts otherwise it might see entire crucial areas and teams disappear. I think we can all agree here that sales/corporate/IT are generally far less effective employees than engineers, but a company can't just fire its entire sales division. That fact alone, by definition, implies that some more-competent staff will need to be fired while less-competent ones are kept, simply to maintain a necessary skill balance. Firing by team is an effective, if crude way to reach that goal.
I think this is one of those areas where you have to accept there are no easy answers, and the "least worst" solution is the best one.
1) There is no "absolutely normal" anything about firing or laying off employees. Some of layoffs/firings will be to get rid of bottom X%-ers, but some will be good or even very well qualified and capable employees (e.g. for salary or budgetary reasons).
2) There is no such thing as a "free market." Or, put another way, "it's a free market" in the same way that China is a pure communist state.
3) You're assuming the person granting the grade--the manager--is being objective and assigning grades fairly. If you think managers do that, you're either a manager, inexperienced, or woefully oblivious (or possibly all three). There are many, many reasons a person could be placed in the bottom X% that have literally nothing to do with his performance or abilities.
Except as others have pointed out, you're not ranked according to the company, but your group. And in companies that like to keep groups small, that means even in groups where everyone is performing well, someone has to be called the bottom.
Your manager was forced to blame someone for something so you get fired for being part of a project that had better staffing so it would be less impacted by loss. This setup requires someone to be called deadweight whether that group actually has any or not.
Firing a static percentage of the company every year is horrible for morale. Managers who are doing their jobs and managing their people should find out when they need to work with them or let them go. People who should be let go shouldn't be held on to until the next review cycle.
Wouldn't this encourage cross-department collaboration? My logic goes like this: Collaborating makes one succeed. But, you don't want your team to succeed, because then you might be laid off. But, people on other teams aren't in competition with you. So, if you collaborate with them, you can really kick the ass of that jerk next to you that you used to be friends with.
I had put down this comment in reply to one of the thread's below...however its better that i put it as a separate comment too..for a larger audience...and in appreciation of true leaders..
management is one shit where the board's decision or the management's decision is responsible for a company's failure..what these guys were doing when they were hiring or buying companies...is employees responsible for the failures...
In any company's failure, the first one to blame is the management because they failed and that's why a lay off has to be done..I had always felt that layoff is an easy way for a CEO or the management to wash off their hands rather than trying to solve the problem at hand..
A leader is someone who leads his team and makes other perform...
In management, I have found most people just licking the bosses above them...and i hate these bunch...in such a management structure, one actually creates a bunch of followers who are unfortunately called managers..
There are exceptions...and they are very few...and these are actual leaders who have the power to turn things around..
For now, all the yahoo services I use stink as much as they always have. It will take years for these sweeping cultural changes to pay off, if the do. Definitely a heroic effort on Mayer's part, considering the shelf life of Yahoo CEOs is so low.
This is silly in my opinion. If she wanted to prune the comoany to make room for more (acqui-)hires do it in stages. First let the managers feel like they can more easily fire the most underperforming people. Donmt force them to do so.
I mean at this point Yahoo is an anachronism, they might as well go all the way with it. Perhaps this will accelerate the inevitable and we can all just be done with it.
Am I the only one wondering why Yahoo! is still around? I struggle to even comprehend what the hell they even do today after jumping out of the search engine race.
> I feel so uncomfortable because in order to meet the bell curve, I have to tell the employee that they missed when I truly don’t believe it to be the case. [...] More often than I’d like I’m told we are executing a certain way ‘because Marissa said so.’
If you have an underproductive department with overprotective management, layoffs (and negative performance reviews) won't happen as frequently as they should.
Maybe members of management just want to protect their respective fiefdoms. Maybe they have their empathy makes it difficult to lay people off. Maybe they genuinely believe their teams are doing well. Maybe their teams actually are doing well, and exceptionally few layoffs (if any) need to happen.
Regardless, "because Marissa said so" is a perfectly valid answer. There will be collateral damage, but it's likely that she's dealing with some extremely protective, entrenched management who won't negatively review anyone on their teams unless they're forced to.
If you've got an underproductive department with overprotective management, I've got a suggestion for where you could trim some fat.
I have difficulty comprehending the logic that trusts someone to monitor, assess, and organize a team's work, but doesn't trust them to take responsibility for the performance of the whole team and micromanages their staffing from above.
> I have difficulty comprehending the logic that trusts someone to monitor, assess, and organize a team's work, but doesn't trust them to take responsibility for the performance of the whole team and micromanages their staffing from above.
I hear you.
I imagine Mayer would like to fire those overprotective members of management, but I can't imagine how she could know exactly who they are at this point. This review processes should hopefully help shine a light on some of them.
One of the areas this type of a bell-curve system falls apart is for highly specialized and well-qualified teams, such as the one I was working on. Who knows, maybe I was a poor employee, but after all the raises, accolades, and the promotion I received (by my firing manager), I'd like to think that wasn't the case and it was just a manager put in a tough spot.
Regardless, it was a nice run and the job market is great. I'm taking a bit of time off, but if you are a company in SF and looking for someone with lots of JavaScript, Node.js, and frontend experience at startups and (of course) big companies, links are in my profile.