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Google Engineering Management Mistakes

296 points by auxbuss 16y ago

plinkplonk 16y ago
"Stack ranking system was harmful:" whoa! I didn't know Google practiced stack ranking. There is a lot of unnecessary stress generated at Microsoft due to this[1]. I would have thought the Google folks would be wise enough to avoid it. As for ".... SVP response: “If you wanted to get promoted for these non-engineering tasks, move into management" heh! How big company ish is that? The best way to join Google these days seems to be as part of an acquired startup. Then you are at worst running out any vesting period while enjoying those free massages. [1] http://minimsft.blogspot.com/2005/07/microsoft-stack-ranking-is-not-good.html http://minimsft.blogspot.com/2005/07/microsoft-stack-ranking...
- tptacek 16y ago
  I had to look up "stack ranking" just now, so, for the benefit of the class: Stack ranking means that if you have a group of 20 people, during each performance review cycle the group manager is expected to rank them from 1 to 20, and the company distributes bonuses and promotions accordingly. That just seems completely asinine.
  - plinkplonk 16y ago
    "Stack ranking means that if you have a group of 20 people, during each performance review cycle the group manager is expected to rank them from 1 to 20, and the company distributes bonuses and promotions accordingly. That just seems completely asinine." Worse, there is often an associated ideal distribution ("the curve") with fixed ratios for "exceeds expectations", "below expectations" and so on and managers are under pressure to conform. If you have an all superstar team, a certain number must still be in the bottom most bucket, and the bottommost 5-10 % is often let go or put on a watchlist (I am not saying this is how Google does it). Over a few years this gets very political as you can imagine. The (bad) middle managers love this part of their jobs.
    - kenjackson 16y ago
      It does seem asinine. Although frankly I can't think of many ways that seem much better. Do you always just give everyone on your team the exact same bonus?
      - tptacek 16y ago
        That's one option. Not giving bonuses at all is another option. Tying incentive comp to business events (recruitment, customer acquisition, an A/B test and minor feature change that produces a 1% uplift, etc) is another option. Anything has to be better than going out of your way to stratify an otherwise well-functioning team.
        kenjackson 16y ago
        I just have a hard time believing incentives don't work. For example, if I lost all of my stock options today and was told I'd never get another raise or bonus, except CoL, I'd quit on the spot. In fact I'd argue, if there were no financial incentives, most HNers wouldn't do startups. I know everyone likes to say they do it to change the world and the passion of something or other. But in reality I've yet to see many founders take a $50k salary only (but keeping voting power) despite the profits of the company.
        tptacek 16y ago
        Incentives work great. Incentives aren't the problem. The basket of formal performance-driven compensation programs colloquially referred to as "incentive pay" are the problem. Incentive pay includes: * Formal periodic performance reviews * Scheduled bonuses based on "job performance" * Ranking of employees (this is the old GE performance management paradigm; "up or out!")
        rhizome 16y ago
        Losing all of your stock options or having something else taken away is not a negative case for incentives, it's an example of a disincentive, which also has an effect. They aren't the same thing, and you can tell because you don't know how well you'd be working if you never had the options in the first place (and hadn't been denied them or otherwise been treated unfairly). One of the reasons you don't see many founders take a $50k/yr salary is that very few of them are truly confident of success. I once heard an aphorism, "don't trust a founder who won't put their own money into the company." It's a little pointed and unrealistic, but you get the idea. In an industry driven by a mythology of becoming the next big thing (parallels to the equally one-in-a-million mindset in the music industry), no founder can afford, professionally and with regard to reputation, to treat themselves as anything but a foregone success, and that attitude requires "competitive compensation." This means they want to be paid as much as other unsure founders. The "low-salary superboss" is a product of already-successful companies.
  - matwood 16y ago
    I once worked at company that employed a lot of hourly wage type people. One exec wanted to stack rank each group of wage employees each month and fire the bottom 25%. I tried to explain to him the negative morale effect that would lead to lower performance across the board, the fact any employes who were decent would just leave on their own, and there is a significant training cost for each new employee that he was ignoring. But nope, he wanted me to write the system anyway. Thankfully someone higher up with a bit of sense got wind of the plan and nixed it. It wasn't too much later that the original exec was canned.
    - rhizome 16y ago
      This is what Jack Welch did at GE in the 80s, firing 10% of management every year. It's not universally derided as an HR/Management policy. I mean, it's pretty much the entire premise of the TV show "The Apprentice," no? Pro: http://www.cogmap.com/blog/2009/11/12/force-ranking-to-fire-employees-every-year/ http://www.cogmap.com/blog/2009/11/12/force-ranking-to-fire-... Con: http://www.missionmindedmanagement.com/where-jack-welch-got-it-wrong-the-mandatory-annual-low-performer-cut http://www.missionmindedmanagement.com/where-jack-welch-got-...
      - paganel 16y ago
        I had a lot of respect for GE until not that long ago, but I think that after things like these (http://accounting.smartpros.com/x67325.xml http://accounting.smartpros.com/x67325.xml) we shouldn't take this company very seriously. They're just crooks like the rest of Wall Street.
      - VladRussian 16y ago
        >firing 10% of management every year that is completely different. All stack ranking mentioned so far was about employees. Firing 10% of management every year have real potential to improve morale.
      - jonnathanson 16y ago
        It bears mentioning that the long view of GE's history is becoming increasingly unkind to Jack Welch. He's starting to look pretty bad and short sighted in many respects. His legend has already been cemented, though, so I doubt anyone will care.
  - BarkMore 16y ago
    Stack ranking means just that: the employees are ranked. What the company does with the ranking can vary. The uses of a stack rank can be beneficial or harmful. At one company where I worked, the rank was used to identify employees for promotion. If an employee consistently ranks above employees at a higher level, then the employee should probably be promoted. The company also merged the ranks for smaller groups into groups of one hundred or more. This resulted in more consistent reviews and promotions across the company. I consider these uses of stack rank to be beneficial. The company also did something harmful with the stack rank. The company graded on a curve and used the stack rank for the grading. Even if everybody in a pool is doing great work, somebody needs to be given a bad review.
    - jonnathanson 16y ago
      The problem with any sort of ranking sysyem is that skill sets, jobs, projects, and roles are not freely fungible or normalizable. You're forced to make some totally absurd comparisons for the sake of fitting whatever the mold may be. We're not talking apples to oranges here; we're talking apples to watermelons.
      - BarkMore 16y ago
        In the stack rank meetings that I was involved with, we ranked employees in the order that we would hire them to a new team. This ranking considered several things: productivity, ability to drive tasks to completion, quality of code, willingness to help others, personality and more. Although it was like comparing apples to oranges, there was usually a consensus on the ranking. A useful aspect of this ranking is that it's a different perspective from the written employee review. The review measured people against goals agreed to at the beginning of the review period. The stack ranking criteria considered more of a person's contribution. An employee could suck at meeting goals, but come out high in the stack ranking because of other things the employee did.
        jonnathanson 16y ago
        I like the idea of a consensus assessment. Sometimes a person's value to the team is less quantifiable on paper than someone else's, but that doesn't mean it's intangible. It's usually quite tangible, and if everyone notices it (or the reverse), that's usually a good sign of the person's value-add. Not everyone is going to be the tireless codebot on the team, but that doesn't mean everyone isn't playing a critical role (Joel Spolsky obviously goes on at great lengths about this). Consensus-style reviews would probably arrive at a fair assessment of such value a lot more readily than individual writeups would. Also, a lot of people make critical contributions that just don't get noticed by the team lead because those contributions -- moral support, culture, taking time away from one's own work to assist others -- aren't boss-facing. But if you asked his or her peers, this person would get a stellar review. In situations like these, group feedback seems pretty important.
- btilly 16y ago
  There are many, many ways to set up a stack rank system. People that I know who have worked at both Microsoft and Google far prefer Google's system. That is not to say that they find Google's system perfect. Just significantly preferable to Microsoft's version. As a Google employee I am not at liberty to discuss what the differences are.
  - sriramk 16y ago
    That's interesting. I'm guessing these are Microsoft employees who quit before the perf review system here at Microsoft was basically changed from scratch 3 years ago?
    - btilly 16y ago
      I've heard comments from people who were at Microsoft for a long time. I don't know the specific timelines of the people involved, and so can't tell you what time period their comments specifically referred to.
- aaronbrethorst 16y ago
  I was thinking the same thing ('oh man, i bet a Microsoftie could have created the same deck back in the mid/late 1990s...')
- piaw 16y ago
  The massages aren't free. They're subsidized at $20/hour.
tptacek 16y ago
Wow, this is one of the coolest things HN has found in awhile. It's remarkable how, time and time again, formal incentive compensation schemes are shown to cause more harm than benefit. I started paying attention when Joel Spolsky called it out 6-7 years ago, and then read Peopleware (an excellent book) which reiterates the point (and calls it "teamicide"), and then read the Harvard Business Review article ("Why Incentive Plans Cannot Work"). Why would a company as smart as Google forge ahead with schemes like this in the face of all available evidence that it's a bad idea?
- tkahnoski 16y ago
  While we're quoting Joel Spolsky: http://www.joelonsoftware.com/articles/Ladder.html http://www.joelonsoftware.com/articles/Ladder.html I wonder if Fog Creek has had the similar frustrations with engineering ladders that Piaw mentions. Although given the distinct difference in company size, it might not be a valid comparison.
- anonymous246 16y ago
  > Why would a company as smart as Google forge ahead with schemes like this in the face of all available evidence that it's a bad idea? My guess: because it can be algorithmized.
  - neworbit 16y ago
    But clearly not well
- mattyb 16y ago
  Spolsky's article: http://www.joelonsoftware.com/articles/fog0000000070.html http://www.joelonsoftware.com/articles/fog0000000070.html
  - mrcharles 16y ago
    One of my coworkers has one of those Ship It awards. It's... pretty sad.
- 16y ago
mattyb 16y ago
Context: http://piaw.blogspot.com/2010/10/facebook-and-google.html http://piaw.blogspot.com/2010/10/facebook-and-google.html
kenjackson 16y ago
Curious, why does he end the presentation saying that a tech ladder is bad? Is the idea that they should have a management ladder, but all engineers are at the same level? That sounds like a recipe for disaster.
- plinkplonk 16y ago
  "Curious, why does he end the presentation saying that a tech ladder is bad?" From the blog post which provides some context to the presentation (http://piaw.blogspot.com/2010/10/facebook-and-google.html http://piaw.blogspot.com/2010/10/facebook-and-google.html), "Many consider Google's #1 mistake to be having a tech ladder in the first place. I covered that topic in my post on Promotion Systems (http://piaw.blogspot.com/2010/04/promotion-systems.html http://piaw.blogspot.com/2010/04/promotion-systems.html) , so did not feel the need to belabor the point." A snippet from the promotion systems post "What if I tried to design a promotion system to piss off as many employees as possible? What characteristics would it have? - No pleasant surprises. In other words, you can only be disappointed if you didn't get a promotion, you can't be pleasantly surprised by a promotion. - Create unhappiness by dependence on scarce resources. In other words, gate promotions based on scarce resources so that even people who would otherwise be qualified could become disgruntled through no fault of their own. -Eliminate accountability from people who make the promotion decisions (e.g., through a committee). That way, promotion decisions can seem arbitrary. -Ensure that promotions are competitive races between all qualified candidates. This ensures that people who manipulate that packet in such a way as to have the best looking packets will win over people who are trying to get feedback and improve, which is supposedly the point behind all these feedback systems. When I looked at Google's promotion system through this lens, I was very impressed. It seemed as though the system was designed to create disgruntled employees out of people who might otherwise be perfectly happy. And note that the ex-Googlers I interviewed were people who benefited from the system, as in: they were very well respected and were hence ranked highly. They were people who couldn't care less what their ranking was, yet they disliked the system anyway, purely because they thought that having a ranking system actually had a deleterious effect on the exchange of ideas." There is a follow up post (http://piaw.blogspot.com/2010/05/promotion-systems-redux.html http://piaw.blogspot.com/2010/05/promotion-systems-redux.htm...) A snippet "My spies at Google tell me that my essay on promotion systems drew a reaction on a Google mailing list that I didn't read even back when I was employed at Google. I did get a few interesting responses. I won't post them here, but I'll address what a few points: Someone.....pointed out that the real compensation at Google was much more dependent on raises, stock and bonuses, so the promotion system didn't matter. But that's not true at all! First of all, there was a level-based salary cap, and people did hit them. So at some point, you have to get promoted if you want your salary to keep going up. Bonuses were based on salaries, so those don't go up if your salary doesn't go up. Secondly, even if it was true that options and bonuses was all that mattered, then you just validated the claim that eliminating the engineering ladder wouldn't hurt productivity at all!" I've found Piaw's posts to be very worth reading, even if you don't end up agreeing with him. Many gems on his blog.
sruffell 16y ago
"biggest mistake is still having a tech ladder"? What specifically is this referring to? A separate career progression for techs vs managers? I thought that was desirable so you don't need to move your best engineers out of engineering positions to promote them. I fear I'm missing something.
- mmt 16y ago
  If I understand correctly, it's suggesting that having formal levels, regardless of whether managers do or not, is what's undesirable. I infer the alternative to be flat, such that there's only difference in compensation, with no difference in formal title. Perhaps I'm biased, since I very much believe you can call me whatever you want, as long as I'm suitably paid. This function-over-form attitude is why I prefer startups.
  - bmj 16y ago
    Perhaps I'm biased, since I very much believe you can call me whatever you want, as long as I'm suitably paid. This function-over-form attitude is why I prefer startups. Then I'm biased, too. I don't work for a start-up (100+ employees, with only seven of us doing software development), but we really don't have "career tracks." There are two management positions in our group (VP and lead engineer), so unless one of them leaves the company, no one is moving up, nor do titles change, even with raises. And this suits me perfectly fine.
martincmartin 16y ago
What is a "Peer bonus structure"? I appears in #3 Recognition, "Peer bonus structure was very well done, but not widely used inside engineering."
- shadowmatter 16y ago
  You can give a peer bonus of $200 to any individual with their manager's approval (which is very easy to get). They encourage giving peer bonuses for when someone goes the extra mile on something, but very few engineers initiate giving a peer bonus. After tax, it's about $100, hence the "I can poop $100" bit.
  - swolchok 16y ago
    Is "close to 50%" the going marginal tax rate in general? I calculate ~30% federal + ~10% California + possibly ~6% social security & Medicare to get that number; did I miss anything? (current grad student with a marginal rate a lot closer to 20%, haven't had the joy of full-on taxes yet)
    - kscaldef 16y ago
      Closer to 8% for SS & Medicare. Also, you'll typically have deductions taken out of bonuses for your 401(k) and ESPP contributions (maybe another 20-25%). Technically, those are still your money; and ESPP will come back to you before too long, but the psychological impact of opening up your paycheck and only seeing 30-40% of the gross you were told was your bonus is pretty frustrating.
      - mturmon 16y ago
        Most of those people would hopefully be above the social security threshold of around $100K/year so that would not apply. I think a marginal tax rate of more like 30-40% is more accurate.
        kscaldef 16y ago
al_biglan 16y ago
100% confirms my fear that this is a group of incredibly smart, hyper intelligent people who don't understand that specializing in a field (like, say... Management) isn't something you can "dabble" in and do well. My experience is that most "managers" in Google (when I interviewed, I met a few Directors, Managers and Tech Leads) are 99% technically focused. Google swung the pendulum too far the other way. Engineering should be in charge of the company, but rely on Managers to do management things, not have Engineers dabble in it (with the best of intentions) I would think if Google applied the same hiring practices to hire in hyper intelligent people with a management focus and could integrate them into the teams correctly, this would be a huge win. (I haven't interviewed there since '07, so things may have changed since then)
- brown9-2 16y ago
  I wouldn't spend too much time looking down your nose at Google's mistakes here, as piaw cautions that they're still a really great company to work for: -At 1500 people, Google was more agile and less political than most 200 person startups! - At any given size, Google was the best company in its class to work for. - At its current size, Google is still more desirable an employer for engineers than Oracle, Cisco, Microsoft, Adobe, Apple, and many other well known names. I think you'd find many similar stories at other software companies if you applied as focused of a lens at them.
kenjackson 16y ago
This also reminds me of a paper I had submitted in the past. Randomly promoting people is more effective than using merit: http://arxiv.org/abs/0907.0455 http://arxiv.org/abs/0907.0455
- VladRussian 16y ago
  do you know of any research on randomly electing people in the government offices? I believe it would also be much more effective.
  - kenjackson 16y ago
    In the US we've been doing this for years.
BenSS 16y ago
This is great, but I think EVERY tech company struggles with finding the right balance here. Where I currently work, they also fail each and every one of these.
- piaw 16y ago
  That's not true. I think the traditional management systems do a good job of not setting bad incentives for tech leads.
paradox95 16y ago
Any large company is going to have those same mistakes. There is really no way around it. Especially the part about only the big sexy project got recognition and not the little grungy tasks. In a company of 20,000, unless you have a 1:5 manager to employee ration at all levels you can't avoid that. If these are Google's biggest mistakes then I would happily go to work for them.
- piaw 16y ago
  I think that it is possible to build a culture where the grunchy unsexy work becomes much less un-thanked. Microsoft at its best did it: Raymond Chen was much celebrated for his heroic efforts at preserving backwards compatibility in Windows. In fact, when the Raymond Chen camp lost its political battle, Microsoft got Windows Vista, which arguably cost it billions. I think the stakes are very high in exactly this sort of political battle, and it is worth while for top engineers to spend their time fighting for precisely this sort of culture shift.
LiveTheDream 16y ago
"The sum of money just appeared in my bank account, but was so insulting low that I felt devalued. If a manager had just talked to me about how much my work was appreciated, it would have been better than money." This is true at a certain threshold. Appreciation is immeasurably better than an demoralizing, insultingly-sized bonus. However on the other end, if you go above and beyond normal expectations and save or earn the company millions of dollars, a "thank you" from your boss on the company newsletter is not going to cut it.
- gruseom 16y ago
  I would challenge this. Let's replace your trivializing phrase "a 'thank you' from your boss on the company newsletter" with just recognition, which obviously can take many forms. We have evidence, cited in this thread, that recognition is generally more satisfying and motivating than financial rewards are (at least those produced by formal incentive plans). What evidence do you have that this effect only holds "at a certain threshold"? Or that it weakens as one's work becomes more important? It's important to resist one's intuitions when faced with a counterintuitive finding, which this is. Most of us have been conditioned to think of "never mind the touchy-feely, show me the money" as hard-nosed realism. That it turns out not to be is immensely interesting.
  - oconnor0 16y ago
    I think part of it is that if you've just saved your company a million dollars getting a bonus of a few thousand seems unfair & like your company's being greedy. Yes, I absolutely want to be recognized for the good work I do, but it would also be nice to get monetary incentives commensurate with the work I've done.
  - LiveTheDream 16y ago
    I left "a certain threshold" undefined on purpose, because it varies from person to person. The point is that the reward must be meaningful to the person being rewarded, otherwise it is much worse than no reward; the person will become cynical, demoralized, and unmotivated. The main problem is conflicting valuations of the work in question, which holds true whether the the payment is money or recognition. Who is to define how much recognition is satisfactory? Take the Microsoft "ship it" award[1] as an example of a formal recognition plan, which failed. My evidence, like the evidence in this thread and the presentation, is just personal experience. [1] http://www.joelonsoftware.com/articles/fog0000000070.html http://www.joelonsoftware.com/articles/fog0000000070.html
jfb 16y ago
It's funny how you could take "Google" out of that slide and put "Apple" in it and it would be almost word-for-word applicable. Or maybe it's not funny. Too, I recognize that this author of this presentation spent time to make it public, and sharing this sort of information is always welcome, so moaning about the format might seem a little rich. But in the glorious tradition of the internet, I'ma gonna bitch about it anyway. I really really hate this new fad of posting these Powerpoint-style slide decks. I would always prefer to read prose, even inexpert prose, than <next> through yet another comically inept link on scribd or google docs. Moaning off. Thanks again to the author.
- piaw 16y ago
  Sorry, the slide deck was there as a presentation to Facebook's VP of engineering. I wasn't about to transcribe my own talk.
  - jfb 16y ago
    Like I said, I appreciate that you took the time. I was just being J. Random Internet Asshole. (But I really do hate slide decks.)
    - piaw 16y ago
      The slide deck was part of a blog post. It's not my fault that news.ycombinator.com only linked to the slide deck and did not provide context: http://piaw.blogspot.com/2010/10/facebook-and-google.html http://piaw.blogspot.com/2010/10/facebook-and-google.html
      - jfb 16y ago
        Very true, and the added context is really helpful. Thanks for responding civilly to my not-very-civil bitchery.
- afterburner 16y ago
  Honestly, this sounds like the problems at any largish engineering company. At least the nice thing about Google is that they're openly discussing it, and sort of scientifically at that. At other companies, you just resign yourself to politics being more than 50% of the equation, and the company slowly goes to hell in between increasingly rare and brief spurts of innovation.
gaius 16y ago
biggest mistake is still having a "tech ladder" What does that mean - there there shouldn't be an engineering career track, the only promotions are into management? (To avoid conflict of team leads being evaluated as individual contributors)
- piaw 16y ago
  See the contextual blog post above and below this comment.
silverlake 16y ago
There is no perfect review and compensation scheme. People will figure out how to game the system. Perhaps the best scheme is to randomly change it every few years so people can't game the system permanently.
- piaw 16y ago
  I've often thought about that. I think it would be a worthwhile experiment.
benzheren 16y ago
There is no perfect system and it is always very difficult to find the right incentives for everyone in the company.
othermaciej 16y ago
He says offhand that Google is a better place for engineers to work than Apple, but as far as I can tell, Apple makes none of these five mistakes.
- piaw 16y ago
  I know several Apple and ex-Apple engineers. Let's just say that the environment isn't even comparable. Google wins hands down. One of my friends at Apple had to file for an information request so that she could debug a problem that spanned multiple layers of abstraction. A Google engineer faced with that kind of inanity would just quit.
  - othermaciej 16y ago
    I've also heard complaints from Google and ex-Google people that wouldn't come up at Apple. Examples: - Launching a hard-to-understand product and providing it with scant marketing support, so it promptly goes nowhere (when Apple launches a product we are committed to making it a success). - Central hiring leads to o way of knowing what kind of project you will end up working on, and high risk that it will be infrastructure grunt work which is not respected by the culture. Does internal secrecy suck more or less than those kinds of things? I dunno. I would not be so bold as to make a claim either way without firsthand experience of both environments.
    - endtime 16y ago
      I'm sure having the trains run on time is nice, but I have to concur with piaw - from the people I've talked to, Apple sounds like a remarkably stifling place to work.
- brown9-2 16y ago
  Certainly over the course of Apple's decades they've made many managing mistakes and it would be trivial for an insider to make a list of any five of them, without ordering of "the top five" or anything like this. It's impossible to be around for so long and to employ many people and not make any mistakes. No company is perfect. Coming away from this presentation thinking "pffft Company X is so much better because they don't do this" is a huge mistake - if you aren't making mistakes, you aren't trying.
brlewis 16y ago
I'd like to hear Paul Buchheit's take on this. He was thinking a lot about company culture issues at FriendFeed, and now at Facebook.
- piaw 16y ago
  Paul "liked" the blog post on Facebook. :-)
leelin 16y ago
Wall Street solves this problem quite efficiently! The annual bonus is really the same as the performance review, so they simply tell everyone "you did a great job this year, here are your compensation numbers." That way, as a rank and file employee you don't really know whether your "review" was above, at, or below average. First order, because you'd have to ask your peers about their compensation, which most people consider rude (at least in the US). Second order, because the bonus is supposed to be an aggregate of your group and individual performance (plus your seniority), so it's usually impossible to find a suitable cohort for comparison.
sdizdar 16y ago
I think the problem is much more general. It seems like the underlying problem is that technology companies have idea to divide people into two categories: manager and individual contributors (developers). And then rank them into levels. This might work for non-tech companies, but I think that is wrong approach for tech companies. One of the key problems is that big money is in "management career path", thus very smart young people which are unable or not willing to go into management will leave to start their own companies. For example, if you look around you, you see that your fellow colleges and managers are quite different. Some of them are "mentors" (people who like to mentor), "intrapreneur" (people with weird ideas), "fire-fighters" (people who are good in fire mode), "coordinators", etc. I'm not sure what is the solution. Maybe something like mash up structure where person who is deciding on ones bonus and raise is not his/her manager.
- sriramk 16y ago
  I actually think this is one of the places Microsoft has done very well in over the years. I don't think used to be the case a decade ago though but the IC career path is as lucrative/supported now as the management path. One can choose to be a Anders Hejlsberg/Dave Cutler as much as one chooses to be a Steven Sinofsky.

296 points by auxbuss 16y ago

"Stack ranking system was harmful:" whoa! I didn't know Google practiced stack ranking. There is a lot of unnecessary stress generated at Microsoft due to this[1]. I would have thought the Google folks would be wise enough to avoid it. As for ".... SVP response: “If you wanted to get promoted for these non-engineering tasks, move into management" heh! How big company ish is that? The best way to join Google these days seems to be as part of an acquired startup. Then you are at worst running out any vesting period while enjoying those free massages. [1] http://minimsft.blogspot.com/2005/07/microsoft-stack-ranking-is-not-good.html http://minimsft.blogspot.com/2005/07/microsoft-stack-ranking...

tptacek 16y ago
I had to look up "stack ranking" just now, so, for the benefit of the class: Stack ranking means that if you have a group of 20 people, during each performance review cycle the group manager is expected to rank them from 1 to 20, and the company distributes bonuses and promotions accordingly. That just seems completely asinine.
- plinkplonk 16y ago
  "Stack ranking means that if you have a group of 20 people, during each performance review cycle the group manager is expected to rank them from 1 to 20, and the company distributes bonuses and promotions accordingly. That just seems completely asinine." Worse, there is often an associated ideal distribution ("the curve") with fixed ratios for "exceeds expectations", "below expectations" and so on and managers are under pressure to conform. If you have an all superstar team, a certain number must still be in the bottom most bucket, and the bottommost 5-10 % is often let go or put on a watchlist (I am not saying this is how Google does it). Over a few years this gets very political as you can imagine. The (bad) middle managers love this part of their jobs.
  - kenjackson 16y ago
    It does seem asinine. Although frankly I can't think of many ways that seem much better. Do you always just give everyone on your team the exact same bonus?
    - tptacek 16y ago
      That's one option. Not giving bonuses at all is another option. Tying incentive comp to business events (recruitment, customer acquisition, an A/B test and minor feature change that produces a 1% uplift, etc) is another option. Anything has to be better than going out of your way to stratify an otherwise well-functioning team.
      - kenjackson 16y ago
        I just have a hard time believing incentives don't work. For example, if I lost all of my stock options today and was told I'd never get another raise or bonus, except CoL, I'd quit on the spot. In fact I'd argue, if there were no financial incentives, most HNers wouldn't do startups. I know everyone likes to say they do it to change the world and the passion of something or other. But in reality I've yet to see many founders take a $50k salary only (but keeping voting power) despite the profits of the company.
        tptacek 16y ago
        Incentives work great. Incentives aren't the problem. The basket of formal performance-driven compensation programs colloquially referred to as "incentive pay" are the problem. Incentive pay includes: * Formal periodic performance reviews * Scheduled bonuses based on "job performance" * Ranking of employees (this is the old GE performance management paradigm; "up or out!")
        rhizome 16y ago
        Losing all of your stock options or having something else taken away is not a negative case for incentives, it's an example of a disincentive, which also has an effect. They aren't the same thing, and you can tell because you don't know how well you'd be working if you never had the options in the first place (and hadn't been denied them or otherwise been treated unfairly). One of the reasons you don't see many founders take a $50k/yr salary is that very few of them are truly confident of success. I once heard an aphorism, "don't trust a founder who won't put their own money into the company." It's a little pointed and unrealistic, but you get the idea. In an industry driven by a mythology of becoming the next big thing (parallels to the equally one-in-a-million mindset in the music industry), no founder can afford, professionally and with regard to reputation, to treat themselves as anything but a foregone success, and that attitude requires "competitive compensation." This means they want to be paid as much as other unsure founders. The "low-salary superboss" is a product of already-successful companies.
- matwood 16y ago
  I once worked at company that employed a lot of hourly wage type people. One exec wanted to stack rank each group of wage employees each month and fire the bottom 25%. I tried to explain to him the negative morale effect that would lead to lower performance across the board, the fact any employes who were decent would just leave on their own, and there is a significant training cost for each new employee that he was ignoring. But nope, he wanted me to write the system anyway. Thankfully someone higher up with a bit of sense got wind of the plan and nixed it. It wasn't too much later that the original exec was canned.
  - rhizome 16y ago
    This is what Jack Welch did at GE in the 80s, firing 10% of management every year. It's not universally derided as an HR/Management policy. I mean, it's pretty much the entire premise of the TV show "The Apprentice," no? Pro: http://www.cogmap.com/blog/2009/11/12/force-ranking-to-fire-employees-every-year/ http://www.cogmap.com/blog/2009/11/12/force-ranking-to-fire-... Con: http://www.missionmindedmanagement.com/where-jack-welch-got-it-wrong-the-mandatory-annual-low-performer-cut http://www.missionmindedmanagement.com/where-jack-welch-got-...
    - paganel 16y ago
      I had a lot of respect for GE until not that long ago, but I think that after things like these (http://accounting.smartpros.com/x67325.xml http://accounting.smartpros.com/x67325.xml) we shouldn't take this company very seriously. They're just crooks like the rest of Wall Street.
    - VladRussian 16y ago
      >firing 10% of management every year that is completely different. All stack ranking mentioned so far was about employees. Firing 10% of management every year have real potential to improve morale.
    - jonnathanson 16y ago
      It bears mentioning that the long view of GE's history is becoming increasingly unkind to Jack Welch. He's starting to look pretty bad and short sighted in many respects. His legend has already been cemented, though, so I doubt anyone will care.
- BarkMore 16y ago
  Stack ranking means just that: the employees are ranked. What the company does with the ranking can vary. The uses of a stack rank can be beneficial or harmful. At one company where I worked, the rank was used to identify employees for promotion. If an employee consistently ranks above employees at a higher level, then the employee should probably be promoted. The company also merged the ranks for smaller groups into groups of one hundred or more. This resulted in more consistent reviews and promotions across the company. I consider these uses of stack rank to be beneficial. The company also did something harmful with the stack rank. The company graded on a curve and used the stack rank for the grading. Even if everybody in a pool is doing great work, somebody needs to be given a bad review.
  - jonnathanson 16y ago
    The problem with any sort of ranking sysyem is that skill sets, jobs, projects, and roles are not freely fungible or normalizable. You're forced to make some totally absurd comparisons for the sake of fitting whatever the mold may be. We're not talking apples to oranges here; we're talking apples to watermelons.
    - BarkMore 16y ago
      In the stack rank meetings that I was involved with, we ranked employees in the order that we would hire them to a new team. This ranking considered several things: productivity, ability to drive tasks to completion, quality of code, willingness to help others, personality and more. Although it was like comparing apples to oranges, there was usually a consensus on the ranking. A useful aspect of this ranking is that it's a different perspective from the written employee review. The review measured people against goals agreed to at the beginning of the review period. The stack ranking criteria considered more of a person's contribution. An employee could suck at meeting goals, but come out high in the stack ranking because of other things the employee did.
      - jonnathanson 16y ago
        I like the idea of a consensus assessment. Sometimes a person's value to the team is less quantifiable on paper than someone else's, but that doesn't mean it's intangible. It's usually quite tangible, and if everyone notices it (or the reverse), that's usually a good sign of the person's value-add. Not everyone is going to be the tireless codebot on the team, but that doesn't mean everyone isn't playing a critical role (Joel Spolsky obviously goes on at great lengths about this). Consensus-style reviews would probably arrive at a fair assessment of such value a lot more readily than individual writeups would. Also, a lot of people make critical contributions that just don't get noticed by the team lead because those contributions -- moral support, culture, taking time away from one's own work to assist others -- aren't boss-facing. But if you asked his or her peers, this person would get a stellar review. In situations like these, group feedback seems pretty important.
btilly 16y ago
There are many, many ways to set up a stack rank system. People that I know who have worked at both Microsoft and Google far prefer Google's system. That is not to say that they find Google's system perfect. Just significantly preferable to Microsoft's version. As a Google employee I am not at liberty to discuss what the differences are.
- sriramk 16y ago
  That's interesting. I'm guessing these are Microsoft employees who quit before the perf review system here at Microsoft was basically changed from scratch 3 years ago?
  - btilly 16y ago
    I've heard comments from people who were at Microsoft for a long time. I don't know the specific timelines of the people involved, and so can't tell you what time period their comments specifically referred to.
aaronbrethorst 16y ago
I was thinking the same thing ('oh man, i bet a Microsoftie could have created the same deck back in the mid/late 1990s...')
piaw 16y ago
The massages aren't free. They're subsidized at $20/hour.

tptacek 16y ago

Wow, this is one of the coolest things HN has found in awhile. It's remarkable how, time and time again, formal incentive compensation schemes are shown to cause more harm than benefit. I started paying attention when Joel Spolsky called it out 6-7 years ago, and then read Peopleware (an excellent book) which reiterates the point (and calls it "teamicide"), and then read the Harvard Business Review article ("Why Incentive Plans Cannot Work"). Why would a company as smart as Google forge ahead with schemes like this in the face of all available evidence that it's a bad idea?

tkahnoski 16y ago
While we're quoting Joel Spolsky: http://www.joelonsoftware.com/articles/Ladder.html http://www.joelonsoftware.com/articles/Ladder.html I wonder if Fog Creek has had the similar frustrations with engineering ladders that Piaw mentions. Although given the distinct difference in company size, it might not be a valid comparison.
anonymous246 16y ago
> Why would a company as smart as Google forge ahead with schemes like this in the face of all available evidence that it's a bad idea? My guess: because it can be algorithmized.
- neworbit 16y ago
  But clearly not well
mattyb 16y ago
Spolsky's article: http://www.joelonsoftware.com/articles/fog0000000070.html http://www.joelonsoftware.com/articles/fog0000000070.html
- mrcharles 16y ago
  One of my coworkers has one of those Ship It awards. It's... pretty sad.
16y ago

mattyb 16y ago

Context: http://piaw.blogspot.com/2010/10/facebook-and-google.html http://piaw.blogspot.com/2010/10/facebook-and-google.html

kenjackson 16y ago

Curious, why does he end the presentation saying that a tech ladder is bad? Is the idea that they should have a management ladder, but all engineers are at the same level? That sounds like a recipe for disaster.

plinkplonk 16y ago
"Curious, why does he end the presentation saying that a tech ladder is bad?" From the blog post which provides some context to the presentation (http://piaw.blogspot.com/2010/10/facebook-and-google.html http://piaw.blogspot.com/2010/10/facebook-and-google.html), "Many consider Google's #1 mistake to be having a tech ladder in the first place. I covered that topic in my post on Promotion Systems (http://piaw.blogspot.com/2010/04/promotion-systems.html http://piaw.blogspot.com/2010/04/promotion-systems.html) , so did not feel the need to belabor the point." A snippet from the promotion systems post "What if I tried to design a promotion system to piss off as many employees as possible? What characteristics would it have? - No pleasant surprises. In other words, you can only be disappointed if you didn't get a promotion, you can't be pleasantly surprised by a promotion. - Create unhappiness by dependence on scarce resources. In other words, gate promotions based on scarce resources so that even people who would otherwise be qualified could become disgruntled through no fault of their own. -Eliminate accountability from people who make the promotion decisions (e.g., through a committee). That way, promotion decisions can seem arbitrary. -Ensure that promotions are competitive races between all qualified candidates. This ensures that people who manipulate that packet in such a way as to have the best looking packets will win over people who are trying to get feedback and improve, which is supposedly the point behind all these feedback systems. When I looked at Google's promotion system through this lens, I was very impressed. It seemed as though the system was designed to create disgruntled employees out of people who might otherwise be perfectly happy. And note that the ex-Googlers I interviewed were people who benefited from the system, as in: they were very well respected and were hence ranked highly. They were people who couldn't care less what their ranking was, yet they disliked the system anyway, purely because they thought that having a ranking system actually had a deleterious effect on the exchange of ideas." There is a follow up post (http://piaw.blogspot.com/2010/05/promotion-systems-redux.html http://piaw.blogspot.com/2010/05/promotion-systems-redux.htm...) A snippet "My spies at Google tell me that my essay on promotion systems drew a reaction on a Google mailing list that I didn't read even back when I was employed at Google. I did get a few interesting responses. I won't post them here, but I'll address what a few points: Someone.....pointed out that the real compensation at Google was much more dependent on raises, stock and bonuses, so the promotion system didn't matter. But that's not true at all! First of all, there was a level-based salary cap, and people did hit them. So at some point, you have to get promoted if you want your salary to keep going up. Bonuses were based on salaries, so those don't go up if your salary doesn't go up. Secondly, even if it was true that options and bonuses was all that mattered, then you just validated the claim that eliminating the engineering ladder wouldn't hurt productivity at all!" I've found Piaw's posts to be very worth reading, even if you don't end up agreeing with him. Many gems on his blog.

sruffell 16y ago

"biggest mistake is still having a tech ladder"? What specifically is this referring to? A separate career progression for techs vs managers? I thought that was desirable so you don't need to move your best engineers out of engineering positions to promote them. I fear I'm missing something.

mmt 16y ago
If I understand correctly, it's suggesting that having formal levels, regardless of whether managers do or not, is what's undesirable. I infer the alternative to be flat, such that there's only difference in compensation, with no difference in formal title. Perhaps I'm biased, since I very much believe you can call me whatever you want, as long as I'm suitably paid. This function-over-form attitude is why I prefer startups.
- bmj 16y ago
  Perhaps I'm biased, since I very much believe you can call me whatever you want, as long as I'm suitably paid. This function-over-form attitude is why I prefer startups. Then I'm biased, too. I don't work for a start-up (100+ employees, with only seven of us doing software development), but we really don't have "career tracks." There are two management positions in our group (VP and lead engineer), so unless one of them leaves the company, no one is moving up, nor do titles change, even with raises. And this suits me perfectly fine.

martincmartin 16y ago

What is a "Peer bonus structure"? I appears in #3 Recognition, "Peer bonus structure was very well done, but not widely used inside engineering."

shadowmatter 16y ago
You can give a peer bonus of $200 to any individual with their manager's approval (which is very easy to get). They encourage giving peer bonuses for when someone goes the extra mile on something, but very few engineers initiate giving a peer bonus. After tax, it's about $100, hence the "I can poop $100" bit.
- swolchok 16y ago
  Is "close to 50%" the going marginal tax rate in general? I calculate ~30% federal + ~10% California + possibly ~6% social security & Medicare to get that number; did I miss anything? (current grad student with a marginal rate a lot closer to 20%, haven't had the joy of full-on taxes yet)
  - kscaldef 16y ago
    Closer to 8% for SS & Medicare. Also, you'll typically have deductions taken out of bonuses for your 401(k) and ESPP contributions (maybe another 20-25%). Technically, those are still your money; and ESPP will come back to you before too long, but the psychological impact of opening up your paycheck and only seeing 30-40% of the gross you were told was your bonus is pretty frustrating.
    - mturmon 16y ago
      Most of those people would hopefully be above the social security threshold of around $100K/year so that would not apply. I think a marginal tax rate of more like 30-40% is more accurate.
      - kscaldef 16y ago

al_biglan 16y ago

100% confirms my fear that this is a group of incredibly smart, hyper intelligent people who don't understand that specializing in a field (like, say... Management) isn't something you can "dabble" in and do well. My experience is that most "managers" in Google (when I interviewed, I met a few Directors, Managers and Tech Leads) are 99% technically focused. Google swung the pendulum too far the other way. Engineering should be in charge of the company, but rely on Managers to do management things, not have Engineers dabble in it (with the best of intentions) I would think if Google applied the same hiring practices to hire in hyper intelligent people with a management focus and could integrate them into the teams correctly, this would be a huge win. (I haven't interviewed there since '07, so things may have changed since then)

brown9-2 16y ago
I wouldn't spend too much time looking down your nose at Google's mistakes here, as piaw cautions that they're still a really great company to work for: -At 1500 people, Google was more agile and less political than most 200 person startups! - At any given size, Google was the best company in its class to work for. - At its current size, Google is still more desirable an employer for engineers than Oracle, Cisco, Microsoft, Adobe, Apple, and many other well known names. I think you'd find many similar stories at other software companies if you applied as focused of a lens at them.

kenjackson 16y ago

This also reminds me of a paper I had submitted in the past. Randomly promoting people is more effective than using merit: http://arxiv.org/abs/0907.0455 http://arxiv.org/abs/0907.0455

VladRussian 16y ago
do you know of any research on randomly electing people in the government offices? I believe it would also be much more effective.
- kenjackson 16y ago
  In the US we've been doing this for years.

BenSS 16y ago

This is great, but I think EVERY tech company struggles with finding the right balance here. Where I currently work, they also fail each and every one of these.

piaw 16y ago
That's not true. I think the traditional management systems do a good job of not setting bad incentives for tech leads.

paradox95 16y ago

Any large company is going to have those same mistakes. There is really no way around it. Especially the part about only the big sexy project got recognition and not the little grungy tasks. In a company of 20,000, unless you have a 1:5 manager to employee ration at all levels you can't avoid that. If these are Google's biggest mistakes then I would happily go to work for them.

piaw 16y ago
I think that it is possible to build a culture where the grunchy unsexy work becomes much less un-thanked. Microsoft at its best did it: Raymond Chen was much celebrated for his heroic efforts at preserving backwards compatibility in Windows. In fact, when the Raymond Chen camp lost its political battle, Microsoft got Windows Vista, which arguably cost it billions. I think the stakes are very high in exactly this sort of political battle, and it is worth while for top engineers to spend their time fighting for precisely this sort of culture shift.

LiveTheDream 16y ago

"The sum of money just appeared in my bank account, but was so insulting low that I felt devalued. If a manager had just talked to me about how much my work was appreciated, it would have been better than money." This is true at a certain threshold. Appreciation is immeasurably better than an demoralizing, insultingly-sized bonus. However on the other end, if you go above and beyond normal expectations and save or earn the company millions of dollars, a "thank you" from your boss on the company newsletter is not going to cut it.

gruseom 16y ago
I would challenge this. Let's replace your trivializing phrase "a 'thank you' from your boss on the company newsletter" with just recognition, which obviously can take many forms. We have evidence, cited in this thread, that recognition is generally more satisfying and motivating than financial rewards are (at least those produced by formal incentive plans). What evidence do you have that this effect only holds "at a certain threshold"? Or that it weakens as one's work becomes more important? It's important to resist one's intuitions when faced with a counterintuitive finding, which this is. Most of us have been conditioned to think of "never mind the touchy-feely, show me the money" as hard-nosed realism. That it turns out not to be is immensely interesting.
- oconnor0 16y ago
  I think part of it is that if you've just saved your company a million dollars getting a bonus of a few thousand seems unfair & like your company's being greedy. Yes, I absolutely want to be recognized for the good work I do, but it would also be nice to get monetary incentives commensurate with the work I've done.
- LiveTheDream 16y ago
  I left "a certain threshold" undefined on purpose, because it varies from person to person. The point is that the reward must be meaningful to the person being rewarded, otherwise it is much worse than no reward; the person will become cynical, demoralized, and unmotivated. The main problem is conflicting valuations of the work in question, which holds true whether the the payment is money or recognition. Who is to define how much recognition is satisfactory? Take the Microsoft "ship it" award[1] as an example of a formal recognition plan, which failed. My evidence, like the evidence in this thread and the presentation, is just personal experience. [1] http://www.joelonsoftware.com/articles/fog0000000070.html http://www.joelonsoftware.com/articles/fog0000000070.html

jfb 16y ago

It's funny how you could take "Google" out of that slide and put "Apple" in it and it would be almost word-for-word applicable. Or maybe it's not funny. Too, I recognize that this author of this presentation spent time to make it public, and sharing this sort of information is always welcome, so moaning about the format might seem a little rich. But in the glorious tradition of the internet, I'ma gonna bitch about it anyway. I really really hate this new fad of posting these Powerpoint-style slide decks. I would always prefer to read prose, even inexpert prose, than <next> through yet another comically inept link on scribd or google docs. Moaning off. Thanks again to the author.

piaw 16y ago
Sorry, the slide deck was there as a presentation to Facebook's VP of engineering. I wasn't about to transcribe my own talk.
- jfb 16y ago
  Like I said, I appreciate that you took the time. I was just being J. Random Internet Asshole. (But I really do hate slide decks.)
  - piaw 16y ago
    The slide deck was part of a blog post. It's not my fault that news.ycombinator.com only linked to the slide deck and did not provide context: http://piaw.blogspot.com/2010/10/facebook-and-google.html http://piaw.blogspot.com/2010/10/facebook-and-google.html
    - jfb 16y ago
      Very true, and the added context is really helpful. Thanks for responding civilly to my not-very-civil bitchery.
afterburner 16y ago
Honestly, this sounds like the problems at any largish engineering company. At least the nice thing about Google is that they're openly discussing it, and sort of scientifically at that. At other companies, you just resign yourself to politics being more than 50% of the equation, and the company slowly goes to hell in between increasingly rare and brief spurts of innovation.

gaius 16y ago

biggest mistake is still having a "tech ladder" What does that mean - there there shouldn't be an engineering career track, the only promotions are into management? (To avoid conflict of team leads being evaluated as individual contributors)

piaw 16y ago
See the contextual blog post above and below this comment.

silverlake 16y ago

There is no perfect review and compensation scheme. People will figure out how to game the system. Perhaps the best scheme is to randomly change it every few years so people can't game the system permanently.

piaw 16y ago
I've often thought about that. I think it would be a worthwhile experiment.

benzheren 16y ago

There is no perfect system and it is always very difficult to find the right incentives for everyone in the company.

othermaciej 16y ago

He says offhand that Google is a better place for engineers to work than Apple, but as far as I can tell, Apple makes none of these five mistakes.

piaw 16y ago
I know several Apple and ex-Apple engineers. Let's just say that the environment isn't even comparable. Google wins hands down. One of my friends at Apple had to file for an information request so that she could debug a problem that spanned multiple layers of abstraction. A Google engineer faced with that kind of inanity would just quit.
- othermaciej 16y ago
  I've also heard complaints from Google and ex-Google people that wouldn't come up at Apple. Examples: - Launching a hard-to-understand product and providing it with scant marketing support, so it promptly goes nowhere (when Apple launches a product we are committed to making it a success). - Central hiring leads to o way of knowing what kind of project you will end up working on, and high risk that it will be infrastructure grunt work which is not respected by the culture. Does internal secrecy suck more or less than those kinds of things? I dunno. I would not be so bold as to make a claim either way without firsthand experience of both environments.
  - endtime 16y ago
    I'm sure having the trains run on time is nice, but I have to concur with piaw - from the people I've talked to, Apple sounds like a remarkably stifling place to work.
brown9-2 16y ago
Certainly over the course of Apple's decades they've made many managing mistakes and it would be trivial for an insider to make a list of any five of them, without ordering of "the top five" or anything like this. It's impossible to be around for so long and to employ many people and not make any mistakes. No company is perfect. Coming away from this presentation thinking "pffft Company X is so much better because they don't do this" is a huge mistake - if you aren't making mistakes, you aren't trying.

brlewis 16y ago

I'd like to hear Paul Buchheit's take on this. He was thinking a lot about company culture issues at FriendFeed, and now at Facebook.

piaw 16y ago
Paul "liked" the blog post on Facebook. :-)

leelin 16y ago

Wall Street solves this problem quite efficiently! The annual bonus is really the same as the performance review, so they simply tell everyone "you did a great job this year, here are your compensation numbers." That way, as a rank and file employee you don't really know whether your "review" was above, at, or below average. First order, because you'd have to ask your peers about their compensation, which most people consider rude (at least in the US). Second order, because the bonus is supposed to be an aggregate of your group and individual performance (plus your seniority), so it's usually impossible to find a suitable cohort for comparison.

sdizdar 16y ago

I think the problem is much more general. It seems like the underlying problem is that technology companies have idea to divide people into two categories: manager and individual contributors (developers). And then rank them into levels. This might work for non-tech companies, but I think that is wrong approach for tech companies. One of the key problems is that big money is in "management career path", thus very smart young people which are unable or not willing to go into management will leave to start their own companies. For example, if you look around you, you see that your fellow colleges and managers are quite different. Some of them are "mentors" (people who like to mentor), "intrapreneur" (people with weird ideas), "fire-fighters" (people who are good in fire mode), "coordinators", etc. I'm not sure what is the solution. Maybe something like mash up structure where person who is deciding on ones bonus and raise is not his/her manager.

sriramk 16y ago
I actually think this is one of the places Microsoft has done very well in over the years. I don't think used to be the case a decade ago though but the IC career path is as lucrative/supported now as the management path. One can choose to be a Anders Hejlsberg/Dave Cutler as much as one chooses to be a Steven Sinofsky.