There appears to be some buzz in the news today about Microsoft’s employee policy change. Alex Wilhelm at TechCrunch offers an article that lays it out neatly, but the gist of it is that Microsoft’s old system ranked employees against each other rather than on their own merits. It’s a system that, over the past decade, has been blamed as the largest problem in the company’s history, and a huge contributor to Microsoft’s decline in popularity.
That seems like a heavy burden for one policy to bear.
When you take a close look at that policy, however, there’s a reason the company broke over it. The concept was that by ranking people against each other, it would foster the sort of healthy competition that would cause people to grow. Bonuses, perks, and promotions would be offered to the top performers on a team, while everyone else was left with a sense of bitterness. The caveat to the system? In order for it to work, great performers had to outrank someone, which forced others who were also doing a great job to be ranked as “poor performers.” Ugh! Talk about a demotivator.
Imagine giving your all. You work long hours, even on holidays, miss time with your family, and even solve some of the most difficult problems that your department/team is facing. In a merit-based standard, you are the type of employee that would be bonused and promoted all the time. However, in Microsoft’s old machine, you’re surrounded by other great performers, some who outwork you, and therefore get reviewed as a “poor performer.” Why? You’re phenomenal and any employer would be glad to have you. But you’re not the best on your team.
Why would you continue to perform under those circumstances?
As owners, we should take this opportunity to look at our own employee policies. Are we giving praise where it’s due? Are we favoring a “superstar” employee, stifling performance and creativity in others? Are we offering the sort of fair and level performance review that our employees so richly deserve? Be careful in this self review. Unlike Microsoft, most of us probably can’t survive a “lost decade” of our own…