How does open allocation address performance evaluation/compensation? Doesn't Valve have both open allocation and stack ranking?
Microsoft-style stack ranking, on the other hand, completely fucks up your career in the company, even if you were just unlucky. You don't get another chance. This can happen when a company falters (layoffs) but it shouldn't be by-design.
A year is a long time to be passed by for additional compensation. Our technostartup environment makes a year feel even longer since the rate of change and adoption of new products is accelerating.
How do companies justify holding paltry bonus parties when teenagers are selling companies for $30 million or raising valuations at $4 billion for things that didn't exist 12 to 24 months ago?
Yearly bonuses feel like an entire lifetime passes between them. Sure, great, here's your bonus amount, but out in the real world there are still people going from zero-to-millions in the same timeframe.
Does this just go back to people are weak/scared/risk-averse and companies can exploit that sociopathically by paying someone $X while their work generates 10$X to 100$X value to the company?
That would be the more rare case of an employee getting screwed (delivering massive value, underpaid). Much more common is an employee who's screwed by being given inappropriate work, few or no opportunities to advance, but then compensated accurately (this might mean getting laid off) for the value delivered (with no allowance made for the error being in that person's work allocation).
No evaluation process is perfect, but a system where being unlucky means you live on your salary for a year is better than one where being unlucky fucks up your career, possibly beyond that job if you get fired abruptly with no severance. Microsoft-style stack-ranking is the latter.
From the same article is a very appropriate quote: "Structurelessness is often mistakenly conflated with absence of hierarchy, when in fact, effective non-hierarchical forms of organizing actually require a great deal of structure. Anyone who has participated in an effectively facilitated general assembly or spokescouncil meeting will well understand this distinction."
Low impact doesn't mean you're a "low performer" or bad person, just that you didn't have any major successes that year. You'd fire over low impact if someone clearly didn't care, but not if they were just unlucky/ill-mentored/mistaken in choosing what efforts to focus on.
The problem with stack-ranking is that it lets people get "killed by the dice", to use an RPG metaphor.