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(BusinessWeek)   Yahoo made the classic HR rookie mistake of grading employees on a curve   (businessweek.com) divider line 47
    More: Fail, Yahoo, Marissa Mayer  
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3960 clicks; posted to Business » on 14 Nov 2013 at 5:40 AM (34 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



47 Comments   (+0 »)
   
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2013-11-14 12:54:48 AM
Didn't Microsoft just drop this?

The biggest problem with that system is that you can have an entire sub-department of great employees, another sub-department of completely shiatty employees, and the lower 1/3rd of each gets let go.  So you're still stuck with shiatty employees and you decimate incentive for the high performers you still have.  In the meantime, you're rewarding under-performers who have the luck of working in an underperforming silo.

Granted, as you apply this farther up the Org Chart, the underperforming silos are eradicated (along with the managers) but it takes so much time you end up losing great employees and demotivating the existing ones all at the same time.  You also lose just "good" employees who would have stayed on if they weren't caught up in the blanket layoffs.  And since you've pitted each employee against each other one, their main focus is not on the company, it's on making sure they beat the other guy.

As a psychological experiment, I'm sure it's fascinating.  For running a business?  You end up with Windows 8.
 
2013-11-14 01:51:52 AM
I'd grade her curves any time.


media.npr.org
 
2013-11-14 02:02:57 AM

Bucky Katt: I'd grade her curves any time.


Didn't Michael Scott leave his job to be with her?
 
2013-11-14 04:31:06 AM
Everything I did or may have thought about this story was washed away by the mind-blowing terribleness of this sentence:

If Marissa Mayer is as good at identifying winning startups as she is at embracing contentious human resources practices, Yahoo! is going to be just fine.

If Jerry Sandusky is as good at drawing up defensive game plans as he is at mouth raping little boys, Penn State is going to be just fine.

If Hitler is as good at winning wars as he is at making lampshades out of human skin, Germany is going to be just fine.
 
2013-11-14 06:41:34 AM
Maybe the way to stabilize a company shouldn't be to identify startups and inflict your money-losing ways on them. Maybe fix your own company first and regain competence at your core products and services. Then swallowing up startups may not just be tossing money down a bottomless pit.

This is a company that screwed up being bought out in an attempt to remain relevant. I don't trust them on the other side of the equation either.
 
2013-11-14 06:54:33 AM

Lsherm: Didn't Microsoft just drop this?

The biggest problem with that system is that you can have an entire sub-department of great employees, another sub-department of completely shiatty employees, and the lower 1/3rd of each gets let go.  So you're still stuck with shiatty employees and you decimate incentive for the high performers you still have.  In the meantime, you're rewarding under-performers who have the luck of working in an underperforming silo.

Granted, as you apply this farther up the Org Chart, the underperforming silos are eradicated (along with the managers) but it takes so much time you end up losing great employees and demotivating the existing ones all at the same time.  You also lose just "good" employees who would have stayed on if they weren't caught up in the blanket layoffs.  And since you've pitted each employee against each other one, their main focus is not on the company, it's on making sure they beat the other guy.

As a psychological experiment, I'm sure it's fascinating.  For running a business?  You end up with Windows 8.


Except Windows 8 is actually just fine. Yahoo is not.
 
ZAZ [TotalFark]
2013-11-14 07:29:26 AM
I don't like companies big enough that grading on a curve is useful. I don't disagree with the principle that 5% of employees in a large organization are useless wastes of space.
 
2013-11-14 07:51:09 AM
KeatingFive
Except Windows 8 is actually just fine. Yahoo is not.

i.ytimg.com

Mmhmm. When you have a multibillion dollar juggernaut like Microsoft churning out a worse product than the bonafide amateurs of Linux, then I'm sure it's just a case of "oh well, what can you do?"
 
2013-11-14 08:11:30 AM

MusicMakeMyHeadPound: KeatingFive
Except Windows 8 is actually just fine. Yahoo is not.



Mmhmm. When you have a multibillion dollar juggernaut like Microsoft churning out a worse product than the bonafide amateurs of Linux, then I'm sure it's just a case of "oh well, what can you do?"


Windows 8 is fine.
 
2013-11-14 08:22:48 AM

Lsherm: Didn't Microsoft just drop this?

The biggest problem with that system is that you can have an entire sub-department of great employees, another sub-department of completely shiatty employees, and the lower 1/3rd of each gets let go.  So you're still stuck with shiatty employees and you decimate incentive for the high performers you still have.  In the meantime, you're rewarding under-performers who have the luck of working in an underperforming silo.

Granted, as you apply this farther up the Org Chart, the underperforming silos are eradicated (along with the managers) but it takes so much time you end up losing great employees and demotivating the existing ones all at the same time.  You also lose just "good" employees who would have stayed on if they weren't caught up in the blanket layoffs.  And since you've pitted each employee against each other one, their main focus is not on the company, it's on making sure they beat the other guy.

As a psychological experiment, I'm sure it's fascinating.  For running a business?  You end up with Windows 8.


Wouldn't this policy also encourage managers to keep a few sub-par people around just to protect their good people? There's no incentive to hire expensive talent if you just have to let them go.
 
2013-11-14 08:30:56 AM

Lsherm: Didn't Microsoft just drop this?


I know it was a huge part of their problem.

HR is a department that should be relegated to processing payroll and administering benefits.  They are not suitable for any other purpose.  If you let them have input into your organizational policies, you will get what's coming to you.

That's free advice.
 
2013-11-14 08:33:37 AM

Lsherm: The biggest problem with that system is that you can have an entire sub-department of great employees, another sub-department of completely shiatty employees, and the lower 1/3rd of each gets let go. So you're still stuck with shiatty employees and you decimate incentive for the high performers you still have. In the meantime, you're rewarding under-performers who have the luck of working in an underperforming silo.



We went through a period where everyone was put into one of three buckets, over performed, performed and under preformed.  Each activity (sub department if you will) had to have equal numbers in each.  Like you said, some activities are more critical than others and can't tolerate errors as well as others.  So the critical departments lost some very good people and had to be back filled with less competent personnel.


After one cycle someone realized that not only were you were ruining departments but you were ruining the careers of some of the people who, by doing a good job, helped get managers their promotions.  The second time through the annual revue cycle they didn't fire people.  Instead they had three cost of living raise categories, let's say it was 3%, 1.5% and 0%.  That turned out to be an equally stupid move.  Instead of people doing their job to the best of their abilities, people learned they had to have highly visible projects.  So each activity started sending out newsletters which were highly visible but didn't really improve profit margins.
 
ZAZ [TotalFark]
2013-11-14 08:42:55 AM
Each activity (sub department if you will) had to have equal numbers in each.

My experience was most employees had to be in the middle group. 5% had to be graded poor. You could be fired for consecutive poor ratings. Up to 10% could be excellent. I forget if there was a quota for excellent. At one big company my boss and I didn't get along so there was no way I would get excellent. I quit the other big company before my first year was up.
 
2013-11-14 08:45:32 AM

ZAZ: I don't disagree with the principle that 5% of employees in a large organization are useless wastes of space.


I agree that some percentage of employees are worthless, but setting that percentage at 5% is arbitrary.

If team members are exceeding expectations, keep them, no matter how many there are.
If team members cannot meet expectations, get rid of them, no matter how many there are.
 
2013-11-14 09:08:34 AM

poot_rootbeer: I agree that some percentage of employees are worthless, but setting that percentage at 5% is arbitrary.

If team members are exceeding expectations, keep them, no matter how many there are.
If team members cannot meet expectations, get rid of them, no matter how many there are.


The nice thing about the bell curve approach is that it regulates managerial expectations. If you're forced into quotas, you can't say that *all* of your employees are great or *all* of your employees are awful.  This can be important for a tech company like Google or Microsoft where a lot of management is made up of engineers rather than managers, and a lot of those people have warped expectations of people.

The *problem* is when people start thinking that being anunderperformer is an automatic firing offense. If an employee is an earnest worker but also in the bottom 5-10%, that tells me that person needs more training or management attention. They might be way over their heads in the position they've been given, or they might be going through personal stuff, etc.

If they chronically underperform and don't seem to care, then you've got a problem.
 
2013-11-14 09:18:00 AM

Fubini: The nice thing about the bell curve approach is that it regulates managerial expectations. If you're forced into quotas, you can't say that *all* of your employees are great or *all* of your employees are awful.  This can be important for a tech company like Google or Microsoft where a lot of management is made up of engineers rather than managers, and a lot of those people have warped expectations of people.


If managers are good at evaluating their teams' performance, keep them.
If managers cannot evaluate their teams' performance, get rid of them.

Now, there is an endemic problem in many organizations where employees at all levels are not given adequate support or training to do their jobs at maximum potential, so when I say "get rid of them", I mean first try to improve their performance, and then if they continue to be incapable of acceptable performance, let them go. Employees shouldn't be made to suffer for the company's failure to equip them for success.
 
2013-11-14 09:27:30 AM
dilbert.com
 
2013-11-14 09:54:28 AM
The forced distribution and bell curve systems do a lot more than eliminate poor performing individuals. But it's only supposed to be used in businesses that need it. Using it as a way to manage "personnel lifecycle" was the mistake in execution that Welch admitted.Yahoo needs this. Probably for 3 years or more.
 
2013-11-14 10:21:52 AM
Do what FedEx does: have the employees rate the managers and fire the low-ranking managers.
 
2013-11-14 10:52:11 AM

"Mmhmm. When you have a multibillion dollar juggernaut like Microsoft churning out a worse product than the bonafide amateurs of Linux, then I'm sure it's just a case of "oh well, what can you do?""


Sorry, but the year of Desktop Linux will never, ever ever arrive. You guys like creating new distros like there's no tomorrow. Documentation, when it exists, is usually poorly written. Asking a question about a Linux issue is a crapshoot that you will either receive help or some thinned skinned Linux person will tell you off.

And though CLI is awesome and more powerful to use when you need to get stuff done and know how to use it, everyone else prefers a graphic interface. The world outside of Linux has moved on from the command line in daily use. And no one should have to be an expert user to be able to use Linux.

Linus Torvalds really needs to tell off a large segment of his users for their narrow views of computing.

 
2013-11-14 11:03:15 AM
It is probably a good thing for Yahoo if applied in the short term. I bet Yahoo has a lot of dead weight that needs to be trimmed off. If it runs for too long they will have no fat left to trim, just muscle.
 
2013-11-14 11:39:23 AM

MusicMakeMyHeadPound: Mmhmm. When you have a multibillion dollar juggernaut like Microsoft churning out a worse product than the bonafide amateurs of Linux, then I'm sure it's just a case of "oh well, what can you do?"


Since when are there more Linux users than Windows 8 users?

/Hint: There aren't
 
2013-11-14 12:40:49 PM

homarjr: Since when are there more Linux users than Windows 8 users?

/Hint: There aren't


If you (correctly) count Android as Linux, there are about 10 times as many end-user Linux installations in use as Windows 8 installations.
 
2013-11-14 01:36:00 PM

poot_rootbeer: homarjr: Since when are there more Linux users than Windows 8 users?

/Hint: There aren't

If you (correctly) count Android as Linux, there are about 10 times as many end-user Linux installations in use as Windows 8 installations.


Hmm, well, I guess the morons at Google could be called amateurs then.
 
2013-11-14 02:19:34 PM

MusicMakeMyHeadPound: KeatingFive
Except Windows 8 is actually just fine. Yahoo is not.

[i.ytimg.com image 320x192]

Mmhmm. When you have a multibillion dollar juggernaut like Microsoft churning out a worse product than the bonafide amateurs of Linux, then I'm sure it's just a case of "oh well, what can you do?"


The only people who have used it and honestly think it's a "worse product than the bonafide amateurs of Linux" are Linux fanbois.
 
2013-11-14 02:19:54 PM
Yeah, I worked in an office, in a cubicle, that was labelled "production." What production means is metrics, and what metrics involve is rigid guidelines with no respect to quality or the person doing the job. In both of my jobs that had metrics (call center agent and property preservation manager), I excelled well beyond the requirement. The best bosses leave me alone at that point. The worst continue to harp on me. If I'm supposed to answer the phone, deal with an irate customer AND type a record of the conversation in six minutes or less, you get the hell away from me so long as my number is 5:30. I had one supervisor actually grab my hand once; I handled the call and then logged out immediately to speak with my immediate supervisor (she was his peer) and then we went to the site director. I do not suffer micromanagers well, and metrics is the foot in the door to micromanagement. On the other hand, my immediate supervisor listened to me when I warned him of a coming trainwreck. Because of it, HE got a commendation for being prepared when no one else on the floor was (I didn't mind him getting credit; I wanted the encouragement for him and to others to keep listening!).

If you have bad employees, you're a bad leader, straight up. You either can't make the call to terminate the ones who need to leave, or you aren't inspiring the ones who are there to get better. Either way, I'm really sick and tired of lower-level employees being constantly blamed for what are really leadership issues. Have to cut corners because your boss has an unreasonable deadline? HE should be the one held responsible when the liability lawsuit comes knocking, not you. Unfortunately, that's not how corporate works at the moment.

/rant off
 
2013-11-14 02:32:56 PM
Lsherm: The biggest problem with that system is that you can have an entire sub-department of great employees, another sub-department of completely shiatty employees, and the lower 1/3rd of each gets let go. So you're still stuck with shiatty employees and you decimate incentive for the high performers you still have. In the meantime, you're rewarding under-performers who have the luck of working in an underperforming silo.

And then, you try to fix a bad silo by transferring some good folks out of another group.

These smart folks might try to fix something, but then they either realize that they're the smartest folks in a group full of goons, get disenchanted and start slacking off. OR, they burn themselves out.

And the ones that start slacking, are smart enough to know just how much they need to do to keep them safely above the goons.
 
2013-11-14 02:38:46 PM
commieprogressive: Windows 8 is fine.

Fine, not great, not awesome, just fine.

// hell, I didn't even care for windows 7 that much

// After decades of using windows, I switched to Ubuntu full time 3 years ago and never looked back. Ubuntu is awesome (once you get rid of all of the Unity bullshiat).

// I think the biggest problem windows has is how much old code they have sitting around in the codebase, and the codebase is too massive to do any proper cleanup.
 
2013-11-14 02:41:38 PM
Muta: Instead they had three cost of living raise categories, let's say it was 3%, 1.5% and 0%. That turned out to be an equally stupid move.

Jimmy: Everybody gets an equal bonus of $400.

Dave: That sounds good, sir.

Jimmy: Except for one lucky person who gets a bonus of $3000, or as I like to call it, "The Big Bonus".

Dave: That's very generous of you, sir.

Jimmy: And also, one employee gets a bonus of $0, or as I like to call it "The Shaft".
 
2013-11-14 03:16:08 PM

poot_rootbeer: homarjr: Since when are there more Linux users than Windows 8 users?

/Hint: There aren't

If you (correctly) count Android as Linux, there are about 10 times as many end-user Linux installations in use as Windows 8 installations.


It's a little unfair to compare all instances of Android to just Windows 8.

How many people are on Kit Kat?

/win7 user at work
//iPhone owner
///Love Android
 
2013-11-14 03:17:52 PM

Marcus Aurelius: HR is a department that should be relegated to processing payroll and administering benefits.  They are not suitable for any other purpose.  If you let them have input into your organizational policies, you will get what's coming to you.


From what I've read, Google (where Marissa Mayer came from) had a great HR department that does a lot to track their employees' activities, and came up with a lot of ideas for making their employees happier and more comfortable while making them more efficient.  I don't get why she's doing the stack ranking thing instead.
 
2013-11-14 03:31:42 PM

Omnivorous: Do what FedEx does: have the employees rate the managers and fire the low-ranking managers.


We do this at my job. My old boss didn't get fired though when he recieved the lowest marks for a manager in the entire country. The only reason was his boss was also his BFF and he told corporate we were all liars out to get him and it was a vast conspiracy against him. Some of my coworkers pretty much crucified him in the 1-10 grading scale for various parts of his job and on the comments section they vented. I did give him low marks and was a tad more diplomatic with my comments. The messed up thing was my bosses boss shared everything with him when he shouldnt have and he came out of his office screaming about how he would get us all back. Very healthy workplace.
 
2013-11-14 04:37:32 PM

Arkanaut: Marcus Aurelius: HR is a department that should be relegated to processing payroll and administering benefits.  They are not suitable for any other purpose.  If you let them have input into your organizational policies, you will get what's coming to you.

From what I've read, Google (where Marissa Mayer came from) had a great HR department that does a lot to track their employees' activities, and came up with a lot of ideas for making their employees happier and more comfortable while making them more efficient.  I don't get why she's doing the stack ranking thing instead.


Well Yahoo's sorta farked, their revenue fell dramatically in 2011 and barely moved in 2012, so they're still in "need to justify layoffs" mode.
 
2013-11-14 04:57:02 PM

Shazam999: poot_rootbeer: homarjr: Since when are there more Linux users than Windows 8 users?

/Hint: There aren't

If you (correctly) count Android as Linux, there are about 10 times as many end-user Linux installations in use as Windows 8 installations.

Hmm, well, I guess the morons at Google could be called amateurs then.


Could explain why buying a big laptop to tether on my phone mobile connection was one of my best decisions in a while.

I try to minimize my phone usage to when it's too impractical to do otherwise.

/lenovo y510p win8. Comes with Pokki preinstalled, almost never see the metro screen.
 
2013-11-14 05:44:18 PM

Shazam999: Arkanaut: Marcus Aurelius: HR is a department that should be relegated to processing payroll and administering benefits.  They are not suitable for any other purpose.  If you let them have input into your organizational policies, you will get what's coming to you.

From what I've read, Google (where Marissa Mayer came from) had a great HR department that does a lot to track their employees' activities, and came up with a lot of ideas for making their employees happier and more comfortable while making them more efficient.  I don't get why she's doing the stack ranking thing instead.

Well Yahoo's sorta farked, their revenue fell dramatically in 2011 and barely moved in 2012, so they're still in "need to justify layoffs" mode.


If they still care about their future and aren't just planning on liquidating the company, they should just bite the bullet and lay them off.  Nobody really ever needs to "justify" layoffs, other than financially.  If they create a poisonous work environment and encourage their best people to leave, they're going to make it extremely difficult to rebound.

Wait, maybe that's the plan.  Are we sure Marissa Mayer isn't a secret operative sent by Google to destroy their competition from the inside?
 
2013-11-14 05:53:13 PM

Arkanaut: Shazam999: Arkanaut: Marcus Aurelius: HR is a department that should be relegated to processing payroll and administering benefits.  They are not suitable for any other purpose.  If you let them have input into your organizational policies, you will get what's coming to you.

From what I've read, Google (where Marissa Mayer came from) had a great HR department that does a lot to track their employees' activities, and came up with a lot of ideas for making their employees happier and more comfortable while making them more efficient.  I don't get why she's doing the stack ranking thing instead.

Well Yahoo's sorta farked, their revenue fell dramatically in 2011 and barely moved in 2012, so they're still in "need to justify layoffs" mode.

If they still care about their future and aren't just planning on liquidating the company, they should just bite the bullet and lay them off.  Nobody really ever needs to "justify" layoffs, other than financially.  If they create a poisonous work environment and encourage their best people to leave, they're going to make it extremely difficult to rebound.

Wait, maybe that's the plan.  Are we sure Marissa Mayer isn't a secret operative sent by Google to destroy their competition from the inside?


Honestly I don't think she has... the balls...  to say it up front.  That's why we keep seeing all these stupid initiatives from her.

Really it's what I would expect from a Gen X CEO.
 
2013-11-14 06:42:21 PM
"Rank-and-yank" was the brain child of Jack Welch aka "Neutron Jack". Every year, he would fire the bottom 10% of his managers, no matter their absolute performance. If they were ranked in the bottom 10%, they were yanked.

Another company that used "Rank-and-yank" was Enron. Well, look at what happened to them.

Of course, all this does is turn an office into Survivor, where the least popular people get voted off.
 
2013-11-14 07:09:46 PM
My biggest problem with Yahoo! is that they've decided to send me daily emails. I unchecked the setting for them, but they still come. Compare that to Google, whose new Gmail interface has done wonders for eliminating shiat from Groupon, Living Social, etc.

Yahoo, take a page from Google. Sell my data behind my back, don't spam me directly.
 
2013-11-14 09:45:37 PM
I'm sure the sales department would love it, for they are naturally competitive. Everyone else not so much. Who would actually want to work for a company that prioritizes performance this way? Who other than naive college grads would apply there?
 
2013-11-14 09:50:55 PM

dustman81: "Rank-and-yank" was the brain child of Jack Welch aka "Neutron Jack". Every year, he would fire the bottom 10% of his managers, no matter their absolute performance. If they were ranked in the bottom 10%, they were yanked.

Another company that used "Rank-and-yank" was Enron. Well, look at what happened to them.

Of course, all this does is turn an office into Survivor, where the least popular people get voted off.


I worked at GE in 3 different businesses for over a decade and the entire "fire the bottom 10%" never happened.

There was a lot of bullshiat that Jack wrote in his books that never in reality happened at GE. Sure we did 20/70/10 forced distributions (which you could alter based on dept/BU performance) but you only had to have a plan for the bottom 10%...you didn't have to shiatcan them. Now if the same person was on the list for 2 straight years...see ya...but RARELY did somebody get torched for one year in the bottom bucket, especially if it was their first year in a new job or they had been moved into something new.

It was massively less ruthless than what Jack said it was.
 
2013-11-15 02:37:50 AM
The best company I've ever worked for had a strict ranking for all of it's employees.  I thought it was a great way of doing things.
 
2013-11-15 07:01:19 AM

MY TEXT IS GREEN AND THAT IS SPECIAL

 
2013-11-15 10:59:46 AM
Yeah, because decimation worked juuuust fine to boost the morale of Roman legions. Oh wait! The practice was dropped because even Republic era Romans thought it was too uncivilized. And these were the people with gladiator arenas and slaves.
 
2013-11-15 12:52:04 PM
Fark_Guy_Rob: The best company I've ever worked for had a strict ranking for all of it's employees. I thought it was a great way of doing things.

Who is number one?

i.telegraph.co.uk
 
2013-11-15 01:27:29 PM

Coach_J: dustman81: "Rank-and-yank" was the brain child of Jack Welch aka "Neutron Jack". Every year, he would fire the bottom 10% of his managers, no matter their absolute performance. If they were ranked in the bottom 10%, they were yanked.

Another company that used "Rank-and-yank" was Enron. Well, look at what happened to them.

Of course, all this does is turn an office into Survivor, where the least popular people get voted off.

I worked at GE in 3 different businesses for over a decade and the entire "fire the bottom 10%" never happened.

There was a lot of bullshiat that Jack wrote in his books that never in reality happened at GE. Sure we did 20/70/10 forced distributions (which you could alter based on dept/BU performance) but you only had to have a plan for the bottom 10%...you didn't have to shiatcan them. Now if the same person was on the list for 2 straight years...see ya...but RARELY did somebody get torched for one year in the bottom bucket, especially if it was their first year in a new job or they had been moved into something new.

It was massively less ruthless than what Jack said it was.


AFAIK that ranking system was invented at Mckinsey & Associates only they call it "up or out". But even those who are "out" aren't fired in the traditional sense, I think they call it "coached to leave" and it's a mutual beneficial type setup. Mckinsey is an interesting company in many ways, low key, no advertising, old school, but the very heart of business and where raw unadulterated pure capitalism is breed and raised. The money flowing through the company is almost incomprehensible. A study using their A-list teams runs in the hundreds of thousands per hour.
 
2013-11-15 02:11:40 PM
Big Blue did the bell-curve thing, at least when I worked there in the late 90s. Probably still does. No automatic firing for the low-end folks though.

Sure, it was demotivational, but no more so than anything else at a company of that size.
 
2013-11-15 02:13:24 PM

Coach_J: RARELY did somebody get torched for one year in the bottom bucket, especially if it was their first year in a new job or they had been moved into something new.


At Big Blue new people were always in the bottom bucket their first year, with rare exceptions (of which I was not, though to be fair I'm not an exceptional employee either).
 
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