Skip to main content

Controversial employee ranking system scrapped by Microsoft after 'cannibalism' claim

Microsoft has announced the end to its controversial stack ranking employee system, after some critics claimed it led to a cannibalistic culture.

Stack ranking - a system designed to encourage employees to compete directly with each other - contrasted starkly with Microsoft CEO Steve Ballmer's vision of a collaborative company, which he dubbed 'One Microsoft'.

This shift in dealing with rewards and bonuses for employees is the latest step the software giant has taken towards realising Ballmer's plan, following a major structural overhaul announced last July.

Only a few weeks before Ballmer unveiled One Microsoft, Vanity Fair contributing editor Kurt Eichenwald interviewed current and former Microsoft employees and accessed records in order to better understand the internal workings of the company. The system of stack ranking received particular criticism from Eichenwald, who partly blamed it for a "lost decade" for Microsoft.

In an internal memo to employees yesterday, Microsoft HR Lisa Brummel said that a new approach designed to increase levels of teamwork for "breakthrough business impact" would be adopted by the company.

"This change is an important step in continuing to create the best possible environment for our world-class talent to take on the toughest challenges and do world-changing work," Brummel said.

The key points of the memo are "more emphasis on teamwork and collaboration", "more emphasis on employee growth and development", "no more ratings" and "no more curve" – meaning no more pre-determined targeted distribution when it comes to employee rewards.

As part of improving teamwork and collaboration, Microsoft will be introducing a process called 'Connects', which it hopes will optimise feedback and improve promote meaningful discussions "to help employees learn in the moment, grow and drive great results."