Microsoft ditches system that ranks employees against each other

The system has long been the object of critical barbs by those who believe it lowered employee morale and stymied innovation.

Under stack ranking, managers each year were required to put set percentages of their team’s employees into one of five groups, ranging from top performers to bottom performers.

The ranking affected everything from promotions to bonuses, and underperformers typically ended up seeking jobs in other parts of the company or elsewhere.

Even if all members of a team performed well that year, the manager was required to designate a set percentage as underperformers — a practice that drew fire from employees. Many thought the system rewarded internal politicking, withholding of information and back-stabbing, rather than rewarding innovation or cooperation.

That review system has been blamed by some for causing Microsoft to fall behind other tech companies in the past decade in key areas such as mobile computing.

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