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Comment by rconti | Hacker News Reader

Do the employees know it? As far as I know, I've never worked at a company anything like this. But then it occurred to me maybe I just have no idea why I get whatever level of raise I get.

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Small companies often work differently, but this has been like this for as long as I can remember in larger companies (and I'm very nearly 50). Usually there is a budget allocation for raises. Managers rank their workers in ordinal fashion. It's often set in quartiles, lowest quarter is placed on the "must improve" list, second lowest gets no raise. Third lowest gets moderate increase (unless they are hitting the top of their band). Highest gets large increase/band increase. Often these sorted D level groups are mixed up in the C level and at the margins D levels can argue that their employees deserve to be bumped up to the next level (which is why it pays to document all your progress for the year -- it gives your manager ammunition when they compare you to other groups). Finally there are X spots for band increases/exceptional performers (which get paid above their band rate, but do not increase in band because their current function is essential to the team).

Like I said, in large corporations it literally pays to have a politically savy manager and to have documented every single thing you've done during the year. Bonus points if you've condensed it down in a presentable fashion.

I had a friend who made it into management in a large corporation. He decided to do things differently. He told his entire team, "Tell me how much money you want. I will tell you what you need to accomplish to get it." He documented the hell out of what his workers did. His team killed all the other teams -- just steamrolled them in terms of productivity, so he got everything he asked for. Made a lot of enemies, though ;-)

>He told his entire team, "Tell me how much money you want. I will tell you what you need to accomplish to get it."

This is my dream manager. I've never had a manager ask what they could do for me and actually mean it.

Because often, despite their wishes, it just isn't realistic. For example, if you are a support employee the answer to what you need to do to earn more may very well be "get a new job because support is only valued at X and so we'll never be able to justify paying you more."

That is literally what he would say. If someone would wander over and say, "I want $500K per year", he would tell them "Well, the CTO makes that. So you're going to have to get into management. The best way to do that is to do some technical work that makes you stand out and also show that you can do the management work. I'll give you a technical project to do and it will be up to you to make sure that it is successful. After that we can talk about what parts of my job I can hand over to you so that you can show that you are capable of doing them. Once you show that you are capable of doing everything that I do, I'll recommend you for a promotion. I warn you that you will probably have to put in a lot of unpaid overtime in the mean time."

(Apologies to him if I have misrepresented his ideas -- taken from a discussion I had with him where I asked him exactly this). Anyway, he told me that many people often were quite happy with a lower salary expectation once they understood what was required of the higher salary expectation. Also "I'll tell you what you have to do" doesn't necessarily mean that the person will succeed. If you want the bigger salary you are going to have to choose the harder projects. So it might be "Take this failing project and turn it around. Hmm... yes I know it's a piece of crap legacy app that nobody else wants to touch. Find a way to make it work and I will find a way to get your raise." A lot of people will say, "Oh. No thanks. I'd rather work with the new shiny greenfield project. It's a lot easier and a lot more fun." His approach was to let people self select for their level of performance. And if someone took the gnarly legacy problem and failed miserably, then he would gently (?) suggest that they focus on easier problems until they have built up their skills.

Yep, and the other piece of this is the stress and expectations. At certain levels literally all that matters is results. To some extent a CEO doesn't care how the sausage gets made by a given team because he has people that are paid to worry about that. And so the actual "you need to do X, Y and Z" might not be specific things like "overhaul this legacy thingamajig" or something similar, but rather "find a way to grow revenue 20% YoY with a budget that is 10% lower than last year's."

The other flip side is the risk--if you want to step up to the plate, at a certain level you need to understand that the stakes are such that if you fail, you likely need to leave or you'll be fired/asked to leave.

Not everyone wants that level of responsibility or risk. In my job I oversee one of the biggest sources of spend in the company (ad spend) and am responsible for driving a large part of our growth. If I don't do my job well that has company-wide implications that are present in my mind literally every day. That's a level of ever-present stress that many people don't want.

It depends on the company. The head of the department is aware. In some cases, the hiring manager might or might not be aware of the entire process ("HR told me to stack rank my direct reports / HR told me to put my team in these 9-blocks"). In large, large company that is typically a headline "Cisco has announced will lay off 500 people next Monday".

Just to back it up a little:

* Stack ranking at Cisco http://www.crn.com/slide-shows/networking/300075791/5-things... * Stack ranking at Google https://www.quora.com/Why-does-Google-stack-rank-its-employe... * Stack ranking at Microsoft http://www.businessinsider.com/microsofts-old-employee-revie... * Stack ranking at Amazon http://insights.dice.com/2016/11/15/amazon-may-end-stack-ran...

There is (almost) always stack ranking for the purposes of equity and bonus distributions, implicit or explicit. But there is also bottom xx% rule for people that must be given bad reviews and placed on PIP. In Microsoft 2000s it was mandatory rule to axe 10% of bottom performers within a team.

Do the employees know it?

In my view, the answer is yes. Today's employees are well connected, and we are no longer dependent on management for information. We might get our information from friends in management, peers who were once managers somewhere else, networking, and even HN. We can broaden our base of knowledge by assuming that most companies are managed in similar ways, due to shared training, culture, and networking among managers.

I'm a former manager and now a regular employee. I understand the mechanics and politics of stack ranking from experience.

At any given moment, the employees may understand the process better than their direct supervisors, because the employees have no limitations on how they gather information, whereas the managers are busy memorizing corporate talking points.

My company has 360s and ranking by different levels. the only thing they don't is to lay off the bottom 10%. They stay around. A team of purely top performers is not possible because they still have to fit on the curve.

That means that a team that on average has higher performers than another one is punishing their members where they could be top performers in another team?

That doesn't make sense from an organizational point of view, you end up with teams that are on average worse than others but still treat the top 10% of team A the same as the top performers of the worse team B?

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