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Comment by tempwhatever212 | Hacker News Reader

This kind of stack ranking was used at large investment bank (starts with M) about 10 years ago while I was working there as a C++ developer.

It resulted in a strategy where some teams have hired puffer people with the only purpose to have poor performance ratings assigned to them and let them go when the demand for such inevitably rose for such from HR. This shielded the core team allowing them to focus solely on actual business requirements.

There were people in the office taking decent salary, doing barely anything with kind of no expectations of their performance whatsoever. Some were doing their masters, some hit the gym very hard, some were just chilling out.

This was my first lesson on how focus on tactical goals and metrics can fundamentally screw up the long term vision.

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Extremely well put. Any time a business decides on a metric / decision criteria, they introduce a strong incentive for their employees and managers to act accordingly. For some reason, leaders rarely seem to think hard enough about the possible outcomes.

My anecdote - at a former big tech company, we had a long hiring freeze, and they even decided that when someone leaves or gets fired, their headcount goes back up to senior leadership who decide where that headcount should be (so as a manager, if you fire someone - you might lose the position entirely).

So, naturally, even since then there have been zero people fired, even if they are low performers, since managers want to keep their headcount. But talented people obviously still get offers and leave, and when they leave, their headcount disappears.

So after a year or so of this great policy, the average level of talent across the company is steadily dropping, which also means it'll be much harder to recruit top talent even after this policy is over - because most talented people want to join a team where they can still learn and evolve, collaborate with other smart folks, etc.

I have had several conversations where I explained that the consequence of a policy decision would be negative, and then the policy was rolled out anyway.

For example, I explained that if it takes a foot-high pile of paperwork to obtain an internal use SSL certificate, then the highly predictable outcome of that policy is not "greater security", but unencrypted HTTP everywhere.

The inevitable response to such feedback is that "people ought to do the right thing", which is laughable on its face. Nobody, and I mean nobody in their right mind will subject themselves to months of paperwork, procedure, and pleading for something that they consider to be optional.

"But, but, the right thing is for them to jump through those hoops anyway!" is the typical response to such logic.

This kind of argument is just futile. Someone up high has decided that they know better, that human nature will bend to their will, and will forge ahead despite being told they are wrong.

Its usually higher ups trying to get out of responsibilities. Force the lower tier out of using company systems, and the administration is "home free" upon incident responsibility.

Preaching to the choir here, but I've been doing security for a long time and the only consistent way to make it work reliably is to make it invisible to the users it should apply to. It should add zero friction to what they would be doing anyway and ideally be the easier option. It's not always possible but having that as an end goal makes processes much more successful.

I've worked at companies that had inane policies with perverse incentives. And, it was pretty funny in a "A Confederacy of Dunces" sort of way.

Compare that to other companies that practically gave out no-limit credit cards and full access: imagine which companies attracted the best talent.

But, it amazes me just how long a company can survive being just mediocre and siloed. You often don't see the long-term effects until after those who implemented the policies have left or been promoted. I often look up those companies to see how they're doing. And, they're still chugging along, being barely profitable.

One story that stuck with me - at FB (at least in the past), there was no travel budget, and no list of sanctioned hotel chains. Any employee could travel as often and as expensively as needed with only their immediate manager's sign-off (unless their job requires weekly travel, in which case - no need for any approval). The only control they put in place was that every week, the top 10 bills would be reviewed by Mark, and you didn't want to be on that list if you didn't have a good business reason. Trust encourages people to do the right thing, and people flock to positions where they are trusted with the tools for the success of their mission...

> leaders rarely seem to think hard enough about the possible outcomes.

This really annoys me about politics. They seems to reason as: We have problem A, so let's do solution B to solve this. And then the reasoning ends.

What should happen is to evaluate all the consequences of solution B. And sometimes those consequences work in such a way that they make problem A even bigger.

Reasoning about an interconnected system is crucial here. And as developers we are very well aware of systems and the impact changes can have. But it seems a lot of people are not able to reason about systems.

Many humans see themselves as independent absolute monarchs of their world. The reality of "we're all part of an interconnected system" is so incredibly offensive on some super-sensitive egotistical and narcissistic level that they will literally become violent to defend it.

If there's one thing we should be teaching in schools, this is it. You can leave school and have no clue that everything is connected to everything else, and that if you're not focused on that reality your actions can have completely unexpected and counterintuitive (to you...) consequences.

>For some reason, leaders rarely seem to think hard enough about the possible outcomes.

I think it's the same issue politicians have. No one of those in power ever thinks of unintended consequences. My guess: it takes a special kind of anal person to actually want to get into power (and thus to eventually get into power) - and they just can't imagine people acting not according to their great master plan.

> Extremely well put. Any time a business decides on a metric / decision criteria, they introduce a strong incentive for their employees and managers to act accordingly. For some reason, leaders rarely seem to think hard enough about the possible outcomes.

I’m so tired of this advice. Maybe metrics are bad, but the only thing worse than metrics is no metrics.

Discouraging an action just because it doesn’t work 100% of the time doesn’t seem efficient either.

The argument really should be that certain metrics are bad. Sure, propose a better one, but saying that leaders don’t think hard enough just because a metric turns out to have ill effects seems useless advice. How can you be certain in advance when you have thought hard enough?

A better approach is probably to recognize that metrics are hard. Keep an eye on them, iterate, and be willing to make mistakes as that’s the only way to improve.

A better approach is to avoid min-maxing on metrics. You can be aware of metrics without making them your exclusive focus, bond and duty.

A good rule of thumb is when you find yourself making "obviously bad decisions" because you know as a result the metric will go up, not because a generally favorable outcome for the business is expected to be the result, then you might be a redneck middle manager driving the metrics.

No one should generally exercise tunnel vision and you should not be completely focused on metrics. (Although it might be OK to have one person in the business whose job is to maintain the tunnel vision, if you're telling the whole company to do this then you are likely creating blind spots that will come back to haunt you.)

If you focus on driving up the metrics it can be at the expense of the vision. The business is not the metrics, and the vision is not fully defined by the metrics.

Have some metrics, but don't make it obvious that the org must max this or that metric, or that x level must be reached. If you do that, the genie will find an ironic way for you to reach the targets without satisfying anyone.

Add autonomy and judgement for the managers, along with a battery of metrics that aren't binding.

Everyone will see that it doesn't help to sign up loads of customers while having loads of complaints coming through the helpdesk, or having loads of extra helpdesk staff with no sales. Where the balance goes is judgement.

Success is one of those nebulous things that can't be described sharply, but people often have an idea of how things are going anyway.

> So, naturally, even since then there have been zero people fired, even if they are low performers, since managers want to keep their headcount. But talented people obviously still get offers and leave, and when they leave, their headcount disappears.

This sounds like a former professor of mine who would order phones and tables for everyone from the spare money on the end of the fiscal year for "research purposes" since otherwise the department would lose the budget.

Agree. Happened at the IB I worked at. I remember a particular person who I was just baffled they kept around, so I asked his manager. "He's my designated fire-ee" I was told. "If in a given year I have to make a cut, he's the guy I cut and I know it won't affect productivity in the team. If someone leaves organically then he survives for another year". A lesson in perverse incentives.

Also at an IB. Locally, they were called “cord wood” (as in stacked firewood). It was so crazily wasteful.

As far as I know, stack ranking was first used, and with good success, by law firms. The thing is, the people being evaluated that way were on a career track to become partners in the firm, and as such they were evaluated by peers or rather future peers. Doing that with artists, writers, programmers and testers who have no expectation of eventually becoming board members and major shareholders is a whole different story and makes no sense.

So long as you (the employee) know the score this sounds like a sweet gig. Work for a year or so at a nice leasuirely pace, save up, get to put large investment bank on your CV, move on.

It’s the employees who don’t know that they’be been hired as the designated sacrificial goat I feel sorry for: That’s a potentially awful position to be in.

Anyone reading this thread and not looking around wondering "maybe I am the designated fire-ee ..." doesnt suffer from enough imposter syndrome.

This sounds like a (horrible) way to implement universal basic income. Just hire puffer people, have them do nothing. They get fired, hire them somewhere else, rinse, repeat.

Except it's extremely demotivating for people doing actual work and getting paid similar money.

My first job was in an old newspaper printing business (this was back when newspapers were highly profitable and a respected medium). We had a few old people in our department who were basically kept there doing nothing because they didn't want to retrain on new technology but they were friends with management so they weren't let go before retirement. Which sounds super humane and socially sensitive. Except there were a few of us new hires that couldn't get permanent contracts because the departments were "fully staffed", we were busting our ass and making 1/2 of what these guys were for doing nothing. And this "fair treatment" wasn't there for everyone - just the people who were friends with upper management - basically if you paid tribute by inviting a few people up to the management offices now and then, bring a bottle of nice booze and locking the door for a few hours, doing out of work favors, etc. There were people who were laid off and who had to retrain to remain.

It was a sobering experience after my rosy childhood world views about fairness in society.

It is hard for the "puffer" people too.

When they are on the clock, people generally want to be at least a little bit useful, at least do something that will be of value to someone. Sitting there doing nothing is not fun.

I think you don't know people them.

There are lots of people who would love to just get their salary and date people online + do their private stuff all the time, and I think it's totally fine that not everybody wants to work hard.

The problem here is of course that it's not good for people who are working hard.

Sama is super proud that there are only 250 people in OpenAI, he understands that slackers destroy companies.

Pushing underperforming people to do something, anything of value is way more pressure and stress on the performers pushing them than the underperforming.

I volunteer as tribute.

Those people would probably get an excellent stack rank too.

>We had a few old people in our department who were basically kept there doing nothing because they didn't want to retrain on new technology but they were friends with management so they weren't let go before retirement.

Being friends with management is doing something though. It’s messed up but if I had the resources there’s definitely people I know who I’d pay to have around just cos socializing with them helps me work better with no requirements on their own output.

Haha I doubt drinking at the office since noon was boosting productivity (although I'm sure they would claim it was) - they were just riding on the insane deals they had while the newspapers were relevant for politics and advertisers.

Sort of how Google could have thousands of employees doing nothing and still be insanely profitable. Since they were employee owned after transitioning from communism (majority share at least) there was no pressure to optimize profits. The pathologies of that were interesting to say the least.

>Haha I doubt drinking at the office since noon was boosting productivity

I dunno, seemed like to worked out very profitably for the boomers. Maybe they’re onto something.

> Except there were a few of us new hires that couldn't get permanent contracts because the departments were "fully staffed", we were busting our ass and making 1/2 of what these guys were for doing nothing.

If the “lifers” actually did something, you would not have been hired at all, right? So, in a way, their slacking actually created a job for you.

It was worst of both worlds - they had to use temp agencies and pay shit because the positions were filled on paper - company would have constant turnover and no young people getting properly trained - and people would quit fast because they figured they would never climb up untill the lifers retired.

Also these kinds of environments (people having too much time on their hands, nothing to do) has other nasty side effects - it's the extreme of corporate politics - clan/tribes and all that. I was good with computers so I got moved to IT department and I got to see it for a while - it was surreal compared to things I've seen in tech.

Perhaps apocryphally (I can't find a valid source at the moment), Keynes was supposed to have suggested during the Depression that people be hired to dig holes and then fill them back up.

He never actually suggested that.

What he did argue was that if you put people to work and pay them for it that's better for the economy as a whole than if they did nothing and earned nothing, even if the work they do is of low (perceived) value. Digging holes and filling them back in is simply an extreme example to emphasize the point.

The reasoning is of course a pretty standard demand-side argument: giving more people more money causes more money to be spent, which boosts the economy.

> extreme example to emphasize the point

Yes, you're right--I didn't mean to suggest that it was a serious policy proposal to dig/fill in holes.

I think that was ex PFC Wintergreen in "Catch 22" who spent the war digging and filling 6'x6'x6' holes and filling them.

Congratulations, you have just reinvented 100% employment in the Communist bloc!

Spoiler: it didn't end well.

That's basically what UBI is, minus the need to even show up at work.

Having grown up under communism, I think UBI might amazingly be a worse idea still. Because while yes, socialist economies did not work out and people were standing around a lot doing nothing (because they had nothing to motivate them to), there was undeniably a communal aspect to it which wasn't all negative. UBI doesn't even have that, it's pure populist perfection. Give monies!

I find that a lot of people in the UK for example, completely misunderstand why communist countries have failed.

Yes you could say that's because of communism, but in practical terms these countries had way more problems than just being communist in the first place.

Almost(?) none of the chose to be communist on their own though..

> why communist countries have failed

please enlighten us.

As more and more jobs become automated, UBI will become a necessity to prevent the collapse of society.

> This sounds like a (horrible) way to implement universal basic income.

According to OP's description it is neither universal nor basic.

UBI is mostly so people have a minimum, don't starve, and can live in something that passes as a dwelling. Not having basic housing is a huge poverty trap, so make sure folks can eat and be kinda stable.

These guys are puffers at big investment banks getting well over 6 figures while they pump iron and work on a masters degree. No comparison, or sympathy.

Next time you need a puffer person, please let me know.

Would be awesome to get a 6 figure salary on the side while I work on my startup.

(I'm very good at leetcode-interview BS so will have no problem passing your interview and will be happy to take the severance when you need to fire me)

The irony would be that the top performers would get and want the puffer positions, while the “suckers” did the work.

Hiring managers: Don't fall for the parent's game. Their leetcode skills prove that they are just trying to trick you into hiring them, after which they will become a valuable member of your team, making your next firing more difficult. If you really want a puffer person, hire me. I'll take the position with no interview, demonstrating my commitment to putting zero effort into your project.

Edit: And don't worry about any bidding war with other managers. I'll just put you in my queue and rotate through you all as needed.

Goodhart's law is very similar in concept.

https://en.wikipedia.org/wiki/Goodhart%27s_law

Also brings this article to mind:

https://en.wikipedia.org/wiki/Perverse_incentive

> Some were doing their masters, some hit the gym very hard, some were just chilling out.

So ... how do I apply for such a puffer position?

> There were people in the office taking decent salary, doing barely anything with kind of no expectations of their performance whatsoever. Some were doing their masters, some hit the gym very hard, some were just chilling out.

I am pretty sure I am this person right now. Got the job but mostly not qualified for it, though I'll concede it's a niche field and they probably have to train people regardless. But it feels square-peg round-hole.

What do?

Do a masters or hit the gym?

Work on side projects to keep your skills sharp so you're ready to apply for new jobs once the inevitable happens.

Always keep your CV up to date (its soo hard to write a CV the day after you get fired), browse the job ads and watch for the buzz words and keep the skills in those words fresh and go to the gym.

(I actually think most stack ranking is dumb, but the comment you made is a very common response and i honestly don't get it)

"This was my first lesson on how focus on tactical goals and metrics can fundamentally screw up the long term vision."

I don't get how you take that away from this - this is a lesson in how bad managers who refuse to do what is asked, and apparently have no accountability, can screw up the system.

Stack ranking may be good or bad, but if your managers are working around the system, and nobody is holding them accountable for it, that's a separate, and honestly bigger, problem.

If they actually did what was really being asked (instead of trying to work around it), either

1. it would work, and the company would be better off.

2. it would fail miserably, and the company would either stop doing that (and be better off) or go bankrupt (and we'd all be better off because it would be an object lesson).

The reason this went badly is precisely because of a lack of real accountability, not because of stack ranking itself.

The point is that if you can game the system, and the system cannot determine that it is being gamed, then it's a bad system.

Who watches the watchmen? In a large-enough organization, the stack ranking system is set by some executive high up the mountain. The low-level line managers and group managers are incentivized to work together to get the budget (for puffer employees) to help them keep their proven performers. Finance doesn't care as long as (a) the bottom-line improvements from firing puffers keep getting realized and (b) management keeps being able to pay puffers below-market salaries. Puffers themselves shouldn't care in this day and age, taking the opportunity to take the puffer paycheck as a 100% remote position with no actual responsibility, while working full-time somewhere else that actually appreciates them, so puffers basically get a free paycheck out of it for nothing.

It doesn't matter if it's a good system in theory. It only matters if it works in practice. There's an old joke about economists - they treat the real world as a special case.

First, the system described by OP is super easy to see who is gaming it. Everyone knows, too!

So it doesn't even fail your first test of "the system can't tell". The system can tell. It's just not doing anything about it. That's the failure i'm describing.

Beyond that: If people work around the system, it will never work, regardless of the system. Any system can be worked around, good or not. There are no magically good systems that can't be worked around, or don't even incentivize people to work around them.

All good systems try to deal with bad actors in some way. If they don't, they fail. Plain and simple.

Saying that any system that doesn't work because it has bad actors is a bad system is silly. You will no-true-scotsman your way into having no systems at all.

I can't tell if you're trolling or not. What's so confusing about rational actors reacting rationally to a change in incentives? Do you think there's only one way for a policy to "fail miserably" or something? Once someone knows that they'll likely have to fire some number of their team whether they want to or not, of course they'll hire sacrificial lambs. It's not like the upper management that has that stupid of a policy is going to give two shits if some middle manager claims they missed their own performance expectations because of instability in their team.

And think about the corollary: how much additional effort would have to go into monitoring managers to make sure they weren't circumventing the "spirit" of the given bullshit metric? A company like that would resemble a dystopian regime.

I'm not trolling at all. As i replied to the other comment, there are zero systems that can't be worked around. There are zero good systems where bad action can be avoided without some form of accountability.

"how much additional effort would have to go into monitoring managers to make sure they weren't circumventing the "spirit" of the given bullshit metric?'

Zero - Everyone already knows when it is bullshit. They all sit in a room, knowing someone else is saying bullshit, but avoid saying anything about it because they want to say bullshit too.

Rational actors do act rationally all the time - the system has to deal with that, and isn't here. That's the point - none of the bad behavior was dealt with.

It's rational to do lots of things. Kill your competitors in the drug game before they kill you, embezzle and rip people off who are vulnerable who can't fight back, etc. Rational is a silly bar, and definitely does not lead to viable systems. It has no moral component. It has no business component. It is only logic.

No system works if it doesn't hold people accountable, even if they are acting rational.

> It resulted in a strategy where some teams have hired puffer people with the only purpose to have poor performance ratings assigned to them and let them go when the demand for such inevitably rose for such from HR.

Those people are known as "sacrificial lambs." I ran across the term in a previous position. More than one person specifically included this concept in their planning.

Goodhart's Law in action.

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