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This is 100% caused by stack ranking, and the problem you identify is a very real one. Chopping off the bottom 5% of employees works if you have a LOT of dead w

This is 100% caused by stack ranking, and the problem you identify is a very real one. Chopping off the bottom 5% of employees works if you have a LOT of dead weight, but realistically you can't really do it continuously or you start removing legitimate talent and, just as worse, fostering a toxic community that values playing politics over delivering value.

taftster 7y ago
Not only that, but chopping off the bottom 5% typically makes room for more hiring; these emptied jobs are likely to be filled with less-than-stellar candidates. It take the new hires a few years before they too are dropped down into that lower 5% rank. Stack ranking ensures that you have churn in your workforce, and not in a good way. You wonder why workers in the tech industry move around so much? Look at stack ranking as a significant contributing factor.
- Spooky23 7y ago
  That’s by design. Keeps the workforce young and insurance cheap.
  - lonelappde 7y ago
    Why would companies prefer cheap insurance over productivity? If they want to pay less, they can just pay less. People would rather get paid less than get fired.
    - 2muchcoffeeman 7y ago
      Is it about cost? It’s often easier to get that pay raise by hopping companies. You’re then replaced with a new hire who is probably getting more than you did. And needs a few months to get up to speed. Treating your proven employees well to retain them would cost less.
    - Spooky23 7y ago
      Big companies are driven by the mean and dollars. The short term numbers work out, and long term productivity issues are addressed by acquisition.
    - Ididntdothis 7y ago
      Productivity is hard to measure. Insurance cost is easy to measure.
  - ajross 7y ago
    Less cynically, it also increases the odds of finding good employees. A "bottom 5%" worker is statistically less likely to suddenly rise to the top of the pack than a new hire is to produce at that level initially. And, more cynically, that remains true even if there's significant measurement error in identifying that 5%.
    - kragen 7y ago
      That's true if the performance ratings are cost-free and fairly accurate. A company where firing is based on misconduct and promotion is based on achievement, rather than basing both on quarterly reviews, might actually have a better chance of finding good employees, and perhaps more importantly, retaining them.
    - 420codebro 7y ago
      How did that work out for Yahoo?

taftster 7y ago

Not only that, but chopping off the bottom 5% typically makes room for more hiring; these emptied jobs are likely to be filled with less-than-stellar candidates. It take the new hires a few years before they too are dropped down into that lower 5% rank. Stack ranking ensures that you have churn in your workforce, and not in a good way. You wonder why workers in the tech industry move around so much? Look at stack ranking as a significant contributing factor.

Spooky23 7y ago
That’s by design. Keeps the workforce young and insurance cheap.
- lonelappde 7y ago
  Why would companies prefer cheap insurance over productivity? If they want to pay less, they can just pay less. People would rather get paid less than get fired.
  - 2muchcoffeeman 7y ago
    Is it about cost? It’s often easier to get that pay raise by hopping companies. You’re then replaced with a new hire who is probably getting more than you did. And needs a few months to get up to speed. Treating your proven employees well to retain them would cost less.
  - Spooky23 7y ago
    Big companies are driven by the mean and dollars. The short term numbers work out, and long term productivity issues are addressed by acquisition.
  - Ididntdothis 7y ago
    Productivity is hard to measure. Insurance cost is easy to measure.
- ajross 7y ago
  Less cynically, it also increases the odds of finding good employees. A "bottom 5%" worker is statistically less likely to suddenly rise to the top of the pack than a new hire is to produce at that level initially. And, more cynically, that remains true even if there's significant measurement error in identifying that 5%.
  - kragen 7y ago
    That's true if the performance ratings are cost-free and fairly accurate. A company where firing is based on misconduct and promotion is based on achievement, rather than basing both on quarterly reviews, might actually have a better chance of finding good employees, and perhaps more importantly, retaining them.
  - 420codebro 7y ago
    How did that work out for Yahoo?