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As long as stack-ranking is only done to adjust compensation, I don't really see the problem. As a more traditional manager, I have to consider salary adjustme

As long as stack-ranking is only done to adjust compensation, I don't really see the problem. As a more traditional manager, I have to consider salary adjustments for my employees. What Valve seems to be doing is to let everyone consider salary adjustments for (half) of the team. And since the rankings appear to be averaged out, one vindictive co-worker isn't likely to screw you over. >it creates a general atmosphere of distrust. Alternately, it creates a culture of responsibility. You want to do well in stack-ranking, so you're going to do your best work. Finally, 50% of any group are below average. I honestly wouldn't mind being considered "the dumbest guy in the room" if I got to work at a dream company. See the following quote from Moby Dick: >And there is a Catskill eagle in some souls that can alike dive down into the blackest gorges, and soar out of them again and become invisible in the sunny spaces. And even if he for ever flies within the gorge, that gorge is in the mountains; so that even in his lowest swoop the mountain eagle is still higher than other birds upon the plain, even though they soar.

michaelochurch 15y ago
If it's only used for compensation, I agree that it's not such a big deal. Getting a 10% year-end bonus instead of 20% is not exactly "getting screwed". The only large (200+) private-sector company where I've worked is Google, where their stack-ranking/Perf system had some serious problems. The first was a 5% cut-line. If you were in the bottom 5% of the Perf stack, you ended up on a PIP. Who usually ends up here? Some were objective underperformers, who'd been coasting for years, in some cases running at less than 1 CL per month. Most, on the other hand, were junior people on underperforming teams-- and of course, those junior people had the least to do with that team's underperformance, but they were poorly established so they got the shaft. That's how most layoffs actually work: junior people who landed on the least effective teams. It's not atypical, but it's dysfunctional. By the way, PIPs have nothing to do with "improving performance". They exist to make it easy to fire people without severance. I actually think PIPs are imbecilic, because I'd rather cut a 3-month severance check and separate cleanly than keep a fired employee in the office for 1 month, but that's another rant. PIPs make the finance department happy (look at what we saved on severance payments!) but piss all over morale and make the manager's life hell, to say nothing about what they do for the PIP'd employee. At Google, a PIP is effectively permanent. Even if you pass the PIP, you become damaged goods and can't transfer. It sticks around on your permanent record until you leave. Which brings discussion to the second problem with Google's system. It sticks around forever. When these types of systems get rotten is when they start getting in the way of peoples' transfers. It means that the people who really should be moving to other projects can't get on to them because no one wants to take a chance on that guy who was an "objective underperformer" in Q4 2005. So, to come around to your point, I agree that if the rankings are only used to adjust pay, there's not much harm done. Unfortunately, it's rare that data collected is only used for the stated purpose. If these numbers start damaging peoples' ability to choose their own projects, it can become nasty quickly.
- chrisbroadfoot 15y ago
  Sorry, but what does any of that have to do with what happens at Valve? Is there actually some relation between your story and Valve?
  - chwahoo 15y ago
    I suspect that people are interested in an article about Valve's culture not (just) because they'd want to work at Valve, but also to take its good ideas and use them elsewhere. I think talking about how one of those ideas worked well or poorly at another company fits perfectly with this discussion.
    - chrisbroadfoot 15y ago
      I didn't see anything in the handbook about PIPs.
      - rdl 15y ago
        I don't understand how Valve could implement a PIP. How do they even fire people? Is it just your team shuns you and then you end up with nothing to do, so if you don't figure out something yourself, you wither away and are culled by the wolves/robots?
        gruseom 15y ago
        I have the same question. If they addressed it, I missed it. You know what, though? Your facetious suggestion is intriguingly sensible.
        officemonkey 15y ago
        >Is it just your team shuns you and then you end up with nothing to do I think the "wither away" bit is probably actually the truth. Let's say you're consistently ranked in the bottom and stick to projects that don't add value to the company. Since stack-ranking determines compensation, someone who costs the company money probably gets salary decreases. After a while, an underperforming worker could make more money in a different company, and they take the hint. Of course, since Valve is dedicated to hiring the right people, they probably don't hire too many duds. Talented people who just don't fit in probably just update their resume and go somewhere else.
LargeWu 15y ago
> Finally, 50% of any group are below average Not necessarily, but 50% are below the median.
- Muzza 15y ago
  The median is an average.
  - harryh 15y ago
    A lot of people interpret average as meaning "mean". Really average is a stupid ambiguous word that should never be used. Be clear: say mean or median, but never average.
    - officemonkey 15y ago
      >Finally, 50% of any group are below average. Yes, language is ambiguous. However, people arguing over the clarity of the above statement is just nerdy pedantry.
      - mreid 15y ago
        I think you meant to say "pedantic nerdery".
- endian 15y ago
  > Not necessarily, but 50% are below the median. Not necessarily. The numbers could all be the same.
mjwalshe 15y ago
The problem with stack ranking and PRP is that its subject to capture by groups with in a company that will manipulate it for their own ends - which end up being counter to the longer term aims of the company and share holders - the HR director gets a bonus for managing the pay quanta down but the company loses 10x performers. For example when I worked at BT the PRP was done - then to make the figures work out with the the increase in pay quanta - the figures where fiddled in secret meetings. It also leads to people playing the game - for example to help with passing his board one of my colleges at BT made that his goal and play'd the game - but as my boss ruefully commented "he hasn't done any real work for 6 months". I have also heard of mangers having quotas of people to give bad apr's to to force them out - one rather grim story from a friend who commented "well our unit has 2 people with terminal cancer so they where put down as cat 4's"

michaelochurch 15y ago

If it's only used for compensation, I agree that it's not such a big deal. Getting a 10% year-end bonus instead of 20% is not exactly "getting screwed". The only large (200+) private-sector company where I've worked is Google, where their stack-ranking/Perf system had some serious problems. The first was a 5% cut-line. If you were in the bottom 5% of the Perf stack, you ended up on a PIP. Who usually ends up here? Some were objective underperformers, who'd been coasting for years, in some cases running at less than 1 CL per month. Most, on the other hand, were junior people on underperforming teams-- and of course, those junior people had the least to do with that team's underperformance, but they were poorly established so they got the shaft. That's how most layoffs actually work: junior people who landed on the least effective teams. It's not atypical, but it's dysfunctional. By the way, PIPs have nothing to do with "improving performance". They exist to make it easy to fire people without severance. I actually think PIPs are imbecilic, because I'd rather cut a 3-month severance check and separate cleanly than keep a fired employee in the office for 1 month, but that's another rant. PIPs make the finance department happy (look at what we saved on severance payments!) but piss all over morale and make the manager's life hell, to say nothing about what they do for the PIP'd employee. At Google, a PIP is effectively permanent. Even if you pass the PIP, you become damaged goods and can't transfer. It sticks around on your permanent record until you leave. Which brings discussion to the second problem with Google's system. It sticks around forever. When these types of systems get rotten is when they start getting in the way of peoples' transfers. It means that the people who really should be moving to other projects can't get on to them because no one wants to take a chance on that guy who was an "objective underperformer" in Q4 2005. So, to come around to your point, I agree that if the rankings are only used to adjust pay, there's not much harm done. Unfortunately, it's rare that data collected is only used for the stated purpose. If these numbers start damaging peoples' ability to choose their own projects, it can become nasty quickly.

chrisbroadfoot 15y ago
Sorry, but what does any of that have to do with what happens at Valve? Is there actually some relation between your story and Valve?
- chwahoo 15y ago
  I suspect that people are interested in an article about Valve's culture not (just) because they'd want to work at Valve, but also to take its good ideas and use them elsewhere. I think talking about how one of those ideas worked well or poorly at another company fits perfectly with this discussion.
  - chrisbroadfoot 15y ago
    I didn't see anything in the handbook about PIPs.
    - rdl 15y ago
      I don't understand how Valve could implement a PIP. How do they even fire people? Is it just your team shuns you and then you end up with nothing to do, so if you don't figure out something yourself, you wither away and are culled by the wolves/robots?
      - gruseom 15y ago
        I have the same question. If they addressed it, I missed it. You know what, though? Your facetious suggestion is intriguingly sensible.
      - officemonkey 15y ago
        >Is it just your team shuns you and then you end up with nothing to do I think the "wither away" bit is probably actually the truth. Let's say you're consistently ranked in the bottom and stick to projects that don't add value to the company. Since stack-ranking determines compensation, someone who costs the company money probably gets salary decreases. After a while, an underperforming worker could make more money in a different company, and they take the hint. Of course, since Valve is dedicated to hiring the right people, they probably don't hire too many duds. Talented people who just don't fit in probably just update their resume and go somewhere else.

LargeWu 15y ago

> Finally, 50% of any group are below average Not necessarily, but 50% are below the median.

Muzza 15y ago
The median is an average.
- harryh 15y ago
  A lot of people interpret average as meaning "mean". Really average is a stupid ambiguous word that should never be used. Be clear: say mean or median, but never average.
  - officemonkey 15y ago
    >Finally, 50% of any group are below average. Yes, language is ambiguous. However, people arguing over the clarity of the above statement is just nerdy pedantry.
    - mreid 15y ago
      I think you meant to say "pedantic nerdery".
endian 15y ago
> Not necessarily, but 50% are below the median. Not necessarily. The numbers could all be the same.

mjwalshe 15y ago

The problem with stack ranking and PRP is that its subject to capture by groups with in a company that will manipulate it for their own ends - which end up being counter to the longer term aims of the company and share holders - the HR director gets a bonus for managing the pay quanta down but the company loses 10x performers. For example when I worked at BT the PRP was done - then to make the figures work out with the the increase in pay quanta - the figures where fiddled in secret meetings. It also leads to people playing the game - for example to help with passing his board one of my colleges at BT made that his goal and play'd the game - but as my boss ruefully commented "he hasn't done any real work for 6 months". I have also heard of mangers having quotas of people to give bad apr's to to force them out - one rather grim story from a friend who commented "well our unit has 2 people with terminal cancer so they where put down as cat 4's"