5 ms·

While I generally agree with you that stack-ranking is a terrible idea for software companies[1], my guess is that the goal here is "lay off a bunch of low perf

by emmett 13y ago

While I generally agree with you that stack-ranking is a terrible idea for software companies[1], my guess is that the goal here is "lay off a bunch of low performers who were hired over the last 10 years". How do you think they should handle that? Managers, generally speaking, are never going to rate their team member down if that means their team will be effected by the layoff. - Trying to bulk-remove low performers is doomed to failure, don't try - Bulk-remove on something else, like what projects you worked on instead of your rating - Let them rank as high as they want, then let the bottom N% go regardless of whether they were technically rated "meets expectations" - Some solution I'm not seeing? This is an honest question -- I've never run (or worked for a long time) a company as big as Yahoo. At Twitch, this isn't a problem because you don't have many layers of management and the number of people is small, so it's easier to get consensus on what acceptable performance is across the entire organization. But I really have no idea how you'd manage that somewhere like Yahoo. If this isn't a one-time thing and Yahoo is moving to a permanent stack-ranking system...nevermind everything I said. But stack-ranking seems like a reasonable one-time way to cut deadwood in a very large company. [1] And maybe in general, I'm just only experienced with software companies.

r00fus 13y ago
Do you need an excuse to lay them off? Oracle laid off thousands of employees after their Peoplesoft merger (many of them in Oracle Apps). The decision on whom to cut (as I understand from friends who were in management at both companies) was a long and drawn out effort and involved many levels of management meetings. But... do it once and leave it be (maybe revisiting in a few years) Doing it every quarter (as implied by the QPR term) or even every year is an organizational forced-march. Maybe you could get away with that at a hedge fund or other highly profitable venture (though in those places you can usually do this by giving/withholding bonuses, etc)
- mmanfrin 13y ago
  Reminds me of a quote from The Prince: "Hence we may learn the lesson that on seizing a state, the usurper should make haste to inflict what injuries he must, at a stroke, that he may not have to renew them daily, but be enabled by their discontinuance to reassure men’s minds, and afterwards win them over by benefits. Whosoever, either through timidity or from following bad counsels, adopts a contrary course, must keep the sword always drawn, and can put no trust in his subjects, who suffering from continued and constantly renewed severities, will never yield him their confidence. Injuries, therefore, should be inflicted all at once, that their ill savour being less lasting may the less offend; whereas, benefits should be conferred little by little, that so they may be more fully relished." http://www.bartleby.com/36/1/8.html http://www.bartleby.com/36/1/8.html
  - espeed 13y ago
    This is precisely the passage that popped to mind when I read the article.
vonmoltke 13y ago
You are absolutely right, and that is what Jack Welch intended when he first implemented stack ranking at GE in the early 90s. At the time GE was overly large with an ossified bureaucracy and thousands, if not tens of thousands, of deadwood employes who were just coasting along occupying a chair. It was killing the company. Stack ranking was the answer to forcing managers to make the hard decisions about who was really helping and who was just collecting a paycheck. It worked very well. This was only supposed to last as long as required to turn GE around. Like all good fads in the business world, though, it was taken too far by the MBA crowd. They now see stack ranking as a great permanent solution to deadwood. They fail to recognize that: 1) all organizations have a certain minimum amount of deadwood, as a function of their size; 2) once an organization approaches its natural level of deadwood, stack ranking hurts more than it helps.
- morley 13y ago
  You state your two final assertions as if they're universal laws. I'm not saying you're incorrect -- they certainly sound valid to me -- but can you point to any research to back up your claims?
- steven2012 13y ago
  It wasn't supposed to be only until GE turned around. It was meant to be a permanent fixture in their HR policy.
  - stea 13y ago
    When Jobs rejoined Apple there were huge layoffs and a cleaning up of projects. But it was never permanent, he struck hard and it was clean. After that the company could focus on innovating and not fear politics of stack ranking. Can you imagine if he kept that system in play, would Apple have been as successful?
    - kmeisthax 13y ago
      Keep in mind that the whole office still had the fear of Steve Ranking, i.e. the fact that Steve Jobs was a dictatorial asshole who just so happened to also have good design sense. More importantly it's very dangerous to start generalizing from Apple to the whole technology industry, considering that you'll probably convince a number of otherwise underperforming companies that their best bet is to have an asshole CEO.
a3n 13y ago
> Some solution I'm not seeing? If the goal is to lay off 10%, then tell every rating manager that he has to lay off 10% of his direct reports, modulo a limited amount of horse trading for true stars.
nknighthb 13y ago
As Yahoo is not on the verge of bankruptcy, I'd say start with a headcount freeze rather than immediate layoffs. That immediately changes the tone from "oops, you fell below an arbitrary line that makes no sense for this team", while providing an incentive to lay off true under-performers because you can replace them with better people. Then start making individualized assessments of projects/teams. Start with the larger ones, where you can hopefully make meaningful cuts with the least disruption. Make individual judgements as to whether the team is pulling its weight or needs to be shrunk (or eliminated entirely). Where layoffs from a team are forced, offer transfers to other teams, which can evaluate whether they would be better served by replacing their lowest performers with these otherwise-doomed employees.
deleted 13y ago
[deleted]
curiousDog 13y ago
Most of the time, in companies like this the dead-weight is actually among the middle managers. Pruning the leaves is just bleeding talent. I think a better solution would be to do a one-time merciless chop-off of managers/people who don't own/maintain a sufficiently large chunk of a product or are part of an org losing money. This type of system just creates a toxic environment within the company and brings down employee morale. Not to mention, new talent would also start shying away from the company
tsotha 13y ago
>Managers, generally speaking, are never going to rate their team member down if that means their team will be effected by the layoff. Where I work they forced all the managers to give up an employee for the Y2K team. Of course they all recommended their least productive team member. Then the entire team was laid off in mid-2000.

by emmett 13y ago

r00fus 13y ago

Do you need an excuse to lay them off? Oracle laid off thousands of employees after their Peoplesoft merger (many of them in Oracle Apps). The decision on whom to cut (as I understand from friends who were in management at both companies) was a long and drawn out effort and involved many levels of management meetings. But... do it once and leave it be (maybe revisiting in a few years) Doing it every quarter (as implied by the QPR term) or even every year is an organizational forced-march. Maybe you could get away with that at a hedge fund or other highly profitable venture (though in those places you can usually do this by giving/withholding bonuses, etc)

mmanfrin 13y ago
Reminds me of a quote from The Prince: "Hence we may learn the lesson that on seizing a state, the usurper should make haste to inflict what injuries he must, at a stroke, that he may not have to renew them daily, but be enabled by their discontinuance to reassure men’s minds, and afterwards win them over by benefits. Whosoever, either through timidity or from following bad counsels, adopts a contrary course, must keep the sword always drawn, and can put no trust in his subjects, who suffering from continued and constantly renewed severities, will never yield him their confidence. Injuries, therefore, should be inflicted all at once, that their ill savour being less lasting may the less offend; whereas, benefits should be conferred little by little, that so they may be more fully relished." http://www.bartleby.com/36/1/8.html http://www.bartleby.com/36/1/8.html
- espeed 13y ago
  This is precisely the passage that popped to mind when I read the article.

vonmoltke 13y ago

You are absolutely right, and that is what Jack Welch intended when he first implemented stack ranking at GE in the early 90s. At the time GE was overly large with an ossified bureaucracy and thousands, if not tens of thousands, of deadwood employes who were just coasting along occupying a chair. It was killing the company. Stack ranking was the answer to forcing managers to make the hard decisions about who was really helping and who was just collecting a paycheck. It worked very well. This was only supposed to last as long as required to turn GE around. Like all good fads in the business world, though, it was taken too far by the MBA crowd. They now see stack ranking as a great permanent solution to deadwood. They fail to recognize that: 1) all organizations have a certain minimum amount of deadwood, as a function of their size; 2) once an organization approaches its natural level of deadwood, stack ranking hurts more than it helps.

morley 13y ago
You state your two final assertions as if they're universal laws. I'm not saying you're incorrect -- they certainly sound valid to me -- but can you point to any research to back up your claims?
steven2012 13y ago
It wasn't supposed to be only until GE turned around. It was meant to be a permanent fixture in their HR policy.
- stea 13y ago
  When Jobs rejoined Apple there were huge layoffs and a cleaning up of projects. But it was never permanent, he struck hard and it was clean. After that the company could focus on innovating and not fear politics of stack ranking. Can you imagine if he kept that system in play, would Apple have been as successful?
  - kmeisthax 13y ago
    Keep in mind that the whole office still had the fear of Steve Ranking, i.e. the fact that Steve Jobs was a dictatorial asshole who just so happened to also have good design sense. More importantly it's very dangerous to start generalizing from Apple to the whole technology industry, considering that you'll probably convince a number of otherwise underperforming companies that their best bet is to have an asshole CEO.

a3n 13y ago

> Some solution I'm not seeing? If the goal is to lay off 10%, then tell every rating manager that he has to lay off 10% of his direct reports, modulo a limited amount of horse trading for true stars.

nknighthb 13y ago

As Yahoo is not on the verge of bankruptcy, I'd say start with a headcount freeze rather than immediate layoffs. That immediately changes the tone from "oops, you fell below an arbitrary line that makes no sense for this team", while providing an incentive to lay off true under-performers because you can replace them with better people. Then start making individualized assessments of projects/teams. Start with the larger ones, where you can hopefully make meaningful cuts with the least disruption. Make individual judgements as to whether the team is pulling its weight or needs to be shrunk (or eliminated entirely). Where layoffs from a team are forced, offer transfers to other teams, which can evaluate whether they would be better served by replacing their lowest performers with these otherwise-doomed employees.

deleted 13y ago

[deleted]

curiousDog 13y ago

Most of the time, in companies like this the dead-weight is actually among the middle managers. Pruning the leaves is just bleeding talent. I think a better solution would be to do a one-time merciless chop-off of managers/people who don't own/maintain a sufficiently large chunk of a product or are part of an org losing money. This type of system just creates a toxic environment within the company and brings down employee morale. Not to mention, new talent would also start shying away from the company

tsotha 13y ago

>Managers, generally speaking, are never going to rate their team member down if that means their team will be effected by the layoff. Where I work they forced all the managers to give up an employee for the Y2K team. Of course they all recommended their least productive team member. Then the entire team was laid off in mid-2000.