14 ms·

As a Microsoft employee I am so happy that we got rid of stack ranking a few years ago. It encourages a bad behavior and goes against helping your coworkers wit

As a Microsoft employee I am so happy that we got rid of stack ranking a few years ago. It encourages a bad behavior and goes against helping your coworkers with whom you are essentially competing for compensation. I am surprised to see that a company like Valve, which seems to be held in high regard by many developers in the industry, still operates with this compensation system. It's system of the 80's if you ask me.

AimHere 10y ago
I suspect it might work differently in Valve's case. I'm led to believe that Microsoft had a fixed, conventional hierarchy, where every little group and person within the group was backstabbing everybody else to keep their jobs. If their handbook is to be believed, Valve has a much more flat management structure, where it's basically Gabe at the top, sortof, and everyone else doing whatever they think is best for the company, and there's a fluid system where people can move between groups according to their interests and how they perceive they can add value. So, unlike in Microsoft's case, Valve's people have an easy avenue towards putting 'if you can't beat 'em, join 'em' into practice. Valve has a radically different corporate culture from most other companies in it's space. It doesn't come from the 80s, or indeed almost any other time. Perhaps the stack ranking works a lot better because of it.
- Karunamon 10y ago
  Part of me wonders if the Valve management structure isn't almost completely to blame for things like their infamously bad customer service. I could see why - dealing with support tickets from irate people is not a particularly interesting (or judging by Steam's runaway success: particularly value adding) activity. Not that I mean to hijack this to complain about Steam, but you have to admit it's a benefit of a traditional management structure: someone is making sure the shitty-but-necessary work gets done.
  - AimHere 10y ago
    I suspect it's much more that Valve is an insanely lightweight company for it's customer base. It has something like 330 employees servicing 100 million customers on the go-to PC gaming platform, and a lot of those employees are working on shiny tech and new games. As a comparison, Rockstar North's facility in Edinburgh has roughly the same employee count (slightly more by Wikipedia's count), and all they do is put out one new game every 5 years or so. I suspect that if Valve wanted to, it could easily hire lots of people who would be happy to man the customer service helplines and who wouldn't be either able or willing to try to make TF2 levels or whatever. Maybe the management structure is what limits the size of Valve, though.
    - danso 10y ago
      [insert obligatory Half-Life 3 joke/reference here] I've never used Steam's customer support; do they outsource any of it to contractors and/or offshore?
      - wishinghand 10y ago
        They've tried and they discontinued doing so because they felt it was even worse than being apathetic about it.
        Sebguer 10y ago
        What's your source on that? I'm fairly certain that all of Valve's customer support is outsourced, though not specifically overseas, but to contract support teams.
    - frik 10y ago
      > shiny tech and new games You mean Half Life with it's last full iteration from 10 years ago, and the second episode with a cliffhanger from 2009? Or the Source engine (HL2) which evolved from GoldSource (HL1) which was based on Quake 1 engine (with some parts from Quake 2 engine) - even the Call of Duty engine which aged well too is based on the more modern Quake 3 engine, and I wouldn't consider it shiny in 2016. Rockstar's RAGE engine as well as Crytek engine (StarCitizen, Crysis), and the Frostbite (Battlefield 1) are light years ahead and far superior in every aspect and that's what I would consider shiny tech. Valve is what Valve is today because of the success of steam. They produce little games like Dota2 more for fun than anything else, they gt rich with steam.
  - tikhonj 10y ago
    I mean, it's not like traditional companies—from Google to Comcast—consistently provide great customer support either. So you can't really make strong conclusions about why Valve is having issues there without additional insight; there are too many confounding variables to pin it just on its management structure. This is a common story with people trying something new. If you do the old-fashioned thing—buy IBM, so to speak—and fail, well, these things happen. A lot of factors could have contributed to the problem. But if you try something new, the new thing must be at fault—even though all those other factors apply just as much now as they did in the IBM case.
    - Karunamon 10y ago
      That's a fair point, but I'm struggling to think of a way in which it isn't at least partially to blame. The handbook (and Valve insiders) say it's pretty much a do-your-own-thing company. Who'd want to deal with angry users all day?
      - robbiemitchell 10y ago
        If they increase the weekly/monthly pay for people who choose to deal with angry customers, it should reach equilibrium eventually.
      - hodwik 10y ago
        I work for a software company very much like Valve in structure, who has been operating this way since the 70s. Support still gets done, because when you hire you specifically hire people who love doing support. Those people exist, and they get tremendously emotionally involved in the quality of their work, just like anyone else. In every department there are people who struggle with the flat hierarchy and free range to work on what you like, who have a strong emotional need to know who is in charge, and to be told what needs doing. Those people struggle, but they are by no means relegated to any one department -- plenty of them are engineers.
      - Bjartr 10y ago
        Surely there are some people out there who really do have a passion for, and get satisfaction from, dealing with upset customers. The questions left are how hard are they to find and how expensive are they to employ.
  - touristtam 10y ago
    Or someone is making sure to look like their are doing some work. I have seen plenty of managers, that are nothing more than a human layer between the CEO/CTO and the engineers.
dpweb 10y ago
Wouldn't it make sense to just pay everyone (in the same type of role) essentially the same amount and then bonus people from time to time on particular outstanding achievements. Nothing is a more powerful inducement than financial incentives and a bonus gives an impact that the ongoing salary doesn't. People don't give a crap about annual reviews unless they think its low enough to get them fired. My sense is performance evaluations should be banished from the corporate world, for the most part. Usually a waste of time, but that is where managers can be helpful as they are carrying an ongoing assessment of the value of each of their employees at all times.
- deleted 10y ago
  [deleted]
- ck425 10y ago
  'Nothing is a more powerful inducement than financial incentives' Actually there's a lot of research that contradicts this. Essentially as long as people have enough money that they don't worry about money ie a comfortable middle class lifestyle for country/area, and they don't think they earn significantly less that their peers, money is very inefficient and occasionally negative incentive for tasks that require a decent level cognitive ability.
  - thenomad 10y ago
    IIRC Peopleware showed that financial bonuses were tremendously effective - at reducing peoples' investment in their work.
- usrusr 10y ago
  Extra money for excellence comes with an implied message that the regular money is just for showing up. You really don't want your employees to feel that way.
localhost 10y ago
At any company (Microsoft included) where performance-based compensation exists, there is a budget for that line item. Therefore it is a zero-sum game - to pay someone more because of their performance, that means that someone else gets less (or zero) from that line item. So, depending on how you interpret the term "stack ranking", you can either look at it as "forced removal of the bottom x% of the company" or "people aren't ranked / bucketized". In the MSFT case, I believe that the former has been removed. But the latter definitely cannot be removed if you are to have performance-based compensation.
- runeks 10y ago
  > At any company (Microsoft included) where performance-based > compensation exists, there is a budget for that line item. I'd like to point out that it's possible to pay bonuses out of profits, rather than a fixed, yearly pre-allocated pool. If employees are only paid a bonus when they add to company profits, there is no competition for bonus funds between employees. So for example, if you have a great idea that saves the company 30% on something, you get half of that saving/profit, or something similar.
  - cesarbs 10y ago
    The problem is, how do you measure that? There are a bunch of good ideas that most people will agree provide a benefit, but it's really hard to come up with an objective measure of how much money that makes or saves.
    - crpatino 10y ago
      Make the bonus pool a fixed percentage of company yearly profits (not sales). Assign at least half of the bonus pool in an egalitarian way (like based on the number of days worked on that year), assign the remainder on a roughtly "merit" based criteria, and let every team to agree on the criteria, but make it be something objective (it does not matter if it is number of bugs closed, or being at your desk on time in the morning, or whatever, just as long as the measurement is unambiguous and the team agrees on it). That would be far from perfect, there will be free loaders, and most likely than not it will be slightly unfair to everyone. But at least you have removed the perverse incentive to sabotage coworkers in order to look yourself better.
f2f 10y ago
that guide is from 2012. things may have changed by now. i know we gave up stack ranking at $GIANTCORP since then.
iEchoic 10y ago
I'm a former MSFT employee that was around when we dropped stack ranking, and I didn't feel like that was a substantial change. Managers still calibrate you against your peers, a stack is still created, and compensation is assigned accordingly. I remember reviews feeling the same before and after. What changed for you?
antnisp 10y ago
You will be horrified to learn that there is a push to write stack ranking for all public employees into the constitution of Greece.

AimHere 10y ago

I suspect it might work differently in Valve's case. I'm led to believe that Microsoft had a fixed, conventional hierarchy, where every little group and person within the group was backstabbing everybody else to keep their jobs. If their handbook is to be believed, Valve has a much more flat management structure, where it's basically Gabe at the top, sortof, and everyone else doing whatever they think is best for the company, and there's a fluid system where people can move between groups according to their interests and how they perceive they can add value. So, unlike in Microsoft's case, Valve's people have an easy avenue towards putting 'if you can't beat 'em, join 'em' into practice. Valve has a radically different corporate culture from most other companies in it's space. It doesn't come from the 80s, or indeed almost any other time. Perhaps the stack ranking works a lot better because of it.

Karunamon 10y ago
Part of me wonders if the Valve management structure isn't almost completely to blame for things like their infamously bad customer service. I could see why - dealing with support tickets from irate people is not a particularly interesting (or judging by Steam's runaway success: particularly value adding) activity. Not that I mean to hijack this to complain about Steam, but you have to admit it's a benefit of a traditional management structure: someone is making sure the shitty-but-necessary work gets done.
- AimHere 10y ago
  I suspect it's much more that Valve is an insanely lightweight company for it's customer base. It has something like 330 employees servicing 100 million customers on the go-to PC gaming platform, and a lot of those employees are working on shiny tech and new games. As a comparison, Rockstar North's facility in Edinburgh has roughly the same employee count (slightly more by Wikipedia's count), and all they do is put out one new game every 5 years or so. I suspect that if Valve wanted to, it could easily hire lots of people who would be happy to man the customer service helplines and who wouldn't be either able or willing to try to make TF2 levels or whatever. Maybe the management structure is what limits the size of Valve, though.
  - danso 10y ago
    [insert obligatory Half-Life 3 joke/reference here] I've never used Steam's customer support; do they outsource any of it to contractors and/or offshore?
    - wishinghand 10y ago
      They've tried and they discontinued doing so because they felt it was even worse than being apathetic about it.
      - Sebguer 10y ago
        What's your source on that? I'm fairly certain that all of Valve's customer support is outsourced, though not specifically overseas, but to contract support teams.
  - frik 10y ago
    > shiny tech and new games You mean Half Life with it's last full iteration from 10 years ago, and the second episode with a cliffhanger from 2009? Or the Source engine (HL2) which evolved from GoldSource (HL1) which was based on Quake 1 engine (with some parts from Quake 2 engine) - even the Call of Duty engine which aged well too is based on the more modern Quake 3 engine, and I wouldn't consider it shiny in 2016. Rockstar's RAGE engine as well as Crytek engine (StarCitizen, Crysis), and the Frostbite (Battlefield 1) are light years ahead and far superior in every aspect and that's what I would consider shiny tech. Valve is what Valve is today because of the success of steam. They produce little games like Dota2 more for fun than anything else, they gt rich with steam.
- tikhonj 10y ago
  I mean, it's not like traditional companies—from Google to Comcast—consistently provide great customer support either. So you can't really make strong conclusions about why Valve is having issues there without additional insight; there are too many confounding variables to pin it just on its management structure. This is a common story with people trying something new. If you do the old-fashioned thing—buy IBM, so to speak—and fail, well, these things happen. A lot of factors could have contributed to the problem. But if you try something new, the new thing must be at fault—even though all those other factors apply just as much now as they did in the IBM case.
  - Karunamon 10y ago
    That's a fair point, but I'm struggling to think of a way in which it isn't at least partially to blame. The handbook (and Valve insiders) say it's pretty much a do-your-own-thing company. Who'd want to deal with angry users all day?
    - robbiemitchell 10y ago
      If they increase the weekly/monthly pay for people who choose to deal with angry customers, it should reach equilibrium eventually.
    - hodwik 10y ago
      I work for a software company very much like Valve in structure, who has been operating this way since the 70s. Support still gets done, because when you hire you specifically hire people who love doing support. Those people exist, and they get tremendously emotionally involved in the quality of their work, just like anyone else. In every department there are people who struggle with the flat hierarchy and free range to work on what you like, who have a strong emotional need to know who is in charge, and to be told what needs doing. Those people struggle, but they are by no means relegated to any one department -- plenty of them are engineers.
    - Bjartr 10y ago
      Surely there are some people out there who really do have a passion for, and get satisfaction from, dealing with upset customers. The questions left are how hard are they to find and how expensive are they to employ.
- touristtam 10y ago
  Or someone is making sure to look like their are doing some work. I have seen plenty of managers, that are nothing more than a human layer between the CEO/CTO and the engineers.

dpweb 10y ago

Wouldn't it make sense to just pay everyone (in the same type of role) essentially the same amount and then bonus people from time to time on particular outstanding achievements. Nothing is a more powerful inducement than financial incentives and a bonus gives an impact that the ongoing salary doesn't. People don't give a crap about annual reviews unless they think its low enough to get them fired. My sense is performance evaluations should be banished from the corporate world, for the most part. Usually a waste of time, but that is where managers can be helpful as they are carrying an ongoing assessment of the value of each of their employees at all times.

deleted 10y ago
[deleted]
ck425 10y ago
'Nothing is a more powerful inducement than financial incentives' Actually there's a lot of research that contradicts this. Essentially as long as people have enough money that they don't worry about money ie a comfortable middle class lifestyle for country/area, and they don't think they earn significantly less that their peers, money is very inefficient and occasionally negative incentive for tasks that require a decent level cognitive ability.
- thenomad 10y ago
  IIRC Peopleware showed that financial bonuses were tremendously effective - at reducing peoples' investment in their work.
usrusr 10y ago
Extra money for excellence comes with an implied message that the regular money is just for showing up. You really don't want your employees to feel that way.

localhost 10y ago

At any company (Microsoft included) where performance-based compensation exists, there is a budget for that line item. Therefore it is a zero-sum game - to pay someone more because of their performance, that means that someone else gets less (or zero) from that line item. So, depending on how you interpret the term "stack ranking", you can either look at it as "forced removal of the bottom x% of the company" or "people aren't ranked / bucketized". In the MSFT case, I believe that the former has been removed. But the latter definitely cannot be removed if you are to have performance-based compensation.

runeks 10y ago
> At any company (Microsoft included) where performance-based > compensation exists, there is a budget for that line item. I'd like to point out that it's possible to pay bonuses out of profits, rather than a fixed, yearly pre-allocated pool. If employees are only paid a bonus when they add to company profits, there is no competition for bonus funds between employees. So for example, if you have a great idea that saves the company 30% on something, you get half of that saving/profit, or something similar.
- cesarbs 10y ago
  The problem is, how do you measure that? There are a bunch of good ideas that most people will agree provide a benefit, but it's really hard to come up with an objective measure of how much money that makes or saves.
  - crpatino 10y ago
    Make the bonus pool a fixed percentage of company yearly profits (not sales). Assign at least half of the bonus pool in an egalitarian way (like based on the number of days worked on that year), assign the remainder on a roughtly "merit" based criteria, and let every team to agree on the criteria, but make it be something objective (it does not matter if it is number of bugs closed, or being at your desk on time in the morning, or whatever, just as long as the measurement is unambiguous and the team agrees on it). That would be far from perfect, there will be free loaders, and most likely than not it will be slightly unfair to everyone. But at least you have removed the perverse incentive to sabotage coworkers in order to look yourself better.

f2f 10y ago

that guide is from 2012. things may have changed by now. i know we gave up stack ranking at $GIANTCORP since then.

iEchoic 10y ago

I'm a former MSFT employee that was around when we dropped stack ranking, and I didn't feel like that was a substantial change. Managers still calibrate you against your peers, a stack is still created, and compensation is assigned accordingly. I remember reviews feeling the same before and after. What changed for you?

antnisp 10y ago

You will be horrified to learn that there is a push to write stack ranking for all public employees into the constitution of Greece.