Microsoft ditches system that ranks employees against each other

In an email to employees Tuesday, Lisa Brummel, Microsoft’s head of human resources, wrote that the new review process will now have “no more curve.”

“We will continue to invest in a generous rewards budget, but there will no longer be a predetermined targeted distribution,” she wrote. “Managers and leaders will have flexibility to allocate rewards in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget.”

In addition, she wrote, there will be “no more ratings. This will let us focus on what matters — having a deeper understanding of the impact we’ve made and our opportunities to grow and improve.”

The change comes as the company undergoes a huge reorganization, begun in July, designed to foster more collaboration and to increase Microsoft’s pace in delivering products and services.

Brummel said in an interview that the reorganization provided “the perfect opportunity to implement these changes. You always want the people plan to align with the business strategy of the company. Now is a beautiful confluence of those things.”

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