Stack Ranking

I just heard about the term stack ranking today. The idea itself is not new. You rate your employees using a normal distribution. A few are top performers. Most are in the middle. And you have a few low performers. Seems legit to me. Isn't this how all reviews are kind of done anyway?

I would prefer that ratings be taken a bit further like they are at select companies. The bottom performers are periodically purged from the company. That might seem a bit radical. But you want to keep your top performers around and happy. It does not help when you keep dead wood on a project or even in the company.

I read an article by Vanity Fair where they interviewed a lot of Microsoft employees. Apparently Microsoft does not like stack ranking to evaluate employee performance. It pits developers against each other. Strange. You would think Microsoft developers would also want such a ranking. At my company, the only time relative rank comes into play is when they evaluate your pay raise. If you make a lot less than your peers, you get the opportunity to catch up during a pay modification.