This is absolutely great for Microsoft and its employees. Grade by curve creates internal friction that is harmful to the team. I am a manager in a large compan

This is absolutely great for Microsoft and its employees. Grade by curve creates internal friction that is harmful to the team. I am a manager in a large company. I always suggested to grade by performance against job level. There is written requirement for each job level, it is relatively easy to measure against the written description by both managers and peers. Everyone has incentive to get salary raise, bigger bonus, promotion. There is no need to use internal competition to add more pressure. On the other hand, the lower 5% people only cost about 2% of companies spending. It is not even worth to worry about it. You need to interview equivalent to 50% of employee count to replace that 5%, plus whole set of HR bandwidth to handle it. Microsoft has been losing a lot of value to fire lower 5% while keep a lower 5% CEO at the top for so many years.