Yahoos Bristle at Mayer’s New QPR Ranking System and “Silent Layoffs”

Ah well. Despite what happened, it was the correct career move and I'd do it again.

That's a pretty poisonous attitude, since half the company isn't going to be in the top half of their team. And honestly, in my experience, most people have no idea whether they are at the 50% point or the 15% point.

That is exactly what is done, and is why stack ranking is both abhorrent and dysfunctional (it incentivises in-team politics and sniping, each team member tries to ensure he's not the one in the bottom slot).

It also incentivises top employees to not work together and to not be put in the same team, as it decreases their chance of being in the "superior" rung and increases their chance of being in the bottom one, something more or less impossible if they're clearly the top of their own rank-and-file team.

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)

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.

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.

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.

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.

I only ask because when I was younger and hadn't been a manager, I would have thought the same exact thing (I remember dismissing managers as "shiny shoes").

Now that I do manage, I realize the multiple tensions and forces pulling and pushing on managers. Some of them include: making employees happy, hitting targets they've committed to, doing their own work, and interacting with peers to move the company forward.

If you have been a manager, I'd be interested to hear how you felt about "exist[ing] only to serve those above" you. Seems like a pretty tough existence.

It's no different from a restaurant thinking, "If the economy doesn't improve, which 2 of my 20 waiters and waitresses will I let go first? I should let them know they're on the bubble."

Or perhaps more abstractly an investor saying, "I have 20 investments. If I need cash, which 2 should I sell?"

That may be a risk they are willing to take. They are probably firing some good people. If a team is doing great and they fire someone from that team because SOMEONE has to get fired, then that's poisonous. But if someone isn't right for the job, but because the job is badly defined, or poorly managed, or the goals are unreasonable, or whatever... it does definitely suck for the person being fired, but losing that employee is a reasonable cost for Yahoo.

If you can cut salaries 20% and take less than a 20% cut in revenue (note, revenue not productivity), you're up in profits, and managers gets bonuses. I don't think it makes sense if the goal is maximum productivity or highest quality of development -- but it'll boost quarterly results.

I have no idea what the pay structure looks like in yahoo (or comparable companies) -- what does a talented recent graduate get vs a 20 year veteran developer?

Not necessarily. I've seen projects that were profit centers deprioritized for other projects that were moonshots. Due to forced ranking, this resulted in the important but less sexy project getting fewer of the nice evaluations to distribute across the group and the loss of important people. It was ultimately an own-goal on the company's part, but the whole process was too big for any one person to prevent it. It was like watching a slow train wreck.

How do you get rid of them and make the whole company stronger?

This is a good question. I don't have any clear answers, myself. I'm inclined to think a good place to start is a hiring freeze in the groups that are not contributing and then letting them shrink by attrition followed by a reorg once the project is too understaffed to be competitive.

You can post absolutely anonymous comment. But only after you log in :)

Anonymous area felt like a road rage where employees were bitching at: - each other - government - taxes - lousy hockey team plays

1) There is no "absolutely normal" anything about firing or laying off employees. Some of layoffs/firings will be to get rid of bottom X%-ers, but some will be good or even very well qualified and capable employees (e.g. for salary or budgetary reasons).

2) There is no such thing as a "free market." Or, put another way, "it's a free market" in the same way that China is a pure communist state.

3) You're assuming the person granting the grade--the manager--is being objective and assigning grades fairly. If you think managers do that, you're either a manager, inexperienced, or woefully oblivious (or possibly all three). There are many, many reasons a person could be placed in the bottom X% that have literally nothing to do with his performance or abilities.

Your manager was forced to blame someone for something so you get fired for being part of a project that had better staffing so it would be less impacted by loss. This setup requires someone to be called deadweight whether that group actually has any or not.

Firing a static percentage of the company every year is horrible for morale. Managers who are doing their jobs and managing their people should find out when they need to work with them or let them go. People who should be let go shouldn't be held on to until the next review cycle.

One, inter-team comparative rankings are essentially meaningless. Imagine you have two teams of roughly equal competence. When asked to rank employees one manager is a bit of a soft touch and gives all his team members good-high rankings. The other is a bit honest and ranks most in the middle, with some low and some high. Some managers might be weak, others lazy, or may simply have a difference understanding of the rankings to other managers. The result is that the group people who get let go are arbitrarily determined by incomparable manager rankings - when you look at it this way, forcing every manager to fire their least effective employee is a blunt, but fairer approach. Of course if you have some magic formula to truly discover the bottom 10% of an entire company...maybe in a call center where everyone can be measured by calls/day...but in a software company what would you do? Measure people by KLOCs? That craziness ended in the 80s (except maybe in IBM). At the end of the day manager rankings (and perhaps peer rankings like MS) are all you have - and as they are essentially incomparable, what else can you do? If you have a better way, you should start a management consulting firm.

Two, when a company is engaging on a total staff reduction, it needs to spread the cuts otherwise it might see entire crucial areas and teams disappear. I think we can all agree here that sales/corporate/IT are generally far less effective employees than engineers, but a company can't just fire its entire sales division. That fact alone, by definition, implies that some more-competent staff will need to be fired while less-competent ones are kept, simply to maintain a necessary skill balance. Firing by team is an effective, if crude way to reach that goal.

I think this is one of those areas where you have to accept there are no easy answers, and the "least worst" solution is the best one.

At a company level that is absolutely correct. I think it supports the notion of firing by team - if anyone can measure the worth of an employee, it is their direct line manager, who is responsible for giving them work and judging the timeliness and quality of the outcome. However, as this "measure" is essentially incomparable between teams, it can't be effectively extrapolated to form a company wide view of the "bottom 10%". Asking each manager to get rid of their least effective employee both spreads the cuts evenly across skill sets, while ensuring that the measure of employee worth is being made by the most qualified person to do so.

> I wonder how things would look if they went by seniority, and simply fired the last 10% to join

Well, like firing by team, it is just another arbitrary measure. But I think I would rather an arbitrary measure that at least tries to take into account employee worth rather than when they joined.

It would look like a company that would have a terrible time hiring anyone decent, perhaps ever again.

Who would want to volunteer to be the most likely to be let go, especially given that you'd stay at risk round after round (if the hiring after you was able to absorb 100% of the next layoff, you'd still end up the lowest tenured employee). Ossified has-beens isn't a comfortable or profitable staffing model.

I hear you.

I imagine Mayer would like to fire those overprotective members of management, but I can't imagine how she could know exactly who they are at this point. This review processes should hopefully help shine a light on some of them.