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Comment by csallen | Hacker News Reader

After all the negative press constantly surrounding Zuckerberg, it's refreshing to hear something positive for once. And, as always, it's inspiring to see evidence that tech founders can potentially be great CEOs.

I think the real value of this article is the info on Facebook's internal policies, though. Ranking people based on relative performance? Relentlessly replacing lack-luster employees? A focus on providing individual incentives? Sounds like a really good (though scary) environment for ensuring that people do their best work.

It's well-known that big companies are much less efficient than their smaller counterparts, but this seems like a step in the right direction for closing that gap.

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This employee-ranking system is common at big companies, including Microsoft and Amazon. There are two key difficulties with such a system, and it would be interesting to learn how Facebook grapples with them:

1 - It's imperative that the criteria for ranking employees is well-aligned with company goals. At Microsoft for example, on most teams you are ranked mostly on what features you ship. That sounds great but it can lead to extreme feature bloat in products. It's hard to take a stand for simplicity and elegant design in a meeting when the other guy's job depends on shipping the feature, and your job depends on getting the other guy to agree to include your feature.

2 - AMZN and MSFT both merge each manager's ranked list of direct reports with the lists created by other managers who report to the same Director or Senior Manager. This process can often be much more political than meritocratic, since other managers usually don't know much about an individual engineer's performance. If a team is flat-out better than other team and all of their engineers deserved to be ranked higher, that can be very difficult to defend in a meeting in front of a VP.

Maybe. These policies can be a double-edged sword. It really depends upon how they are implemented. Most of the ranking systems - and it sounds like Facebook's - rely on the immediate manager to do the ranking and the manager has a lot of leverage. It can become arbitrary. It can often come down to how much your manager likes you (outside of your productivity) or managers protecting turf. Enron had a system like this for dishing out bonuses and it boiled down to nonstop political battles to get better ratings.

I agree with you for the most part but really any business innovation, no matter how smart it is, will be screwed up if you have bad managers. Managers implement business strategy just like construction workers implement home architectural designs. If you have a crappy contractor it doesn't matter how good the blue prints are it's going to screw up your house. Same with bad managers.

So you can't really blame a policy when it gets screwed up by bad management.

Well yes but I think it has more to do with the incentives that are placed before people. As an organization gets larger it gets harder to tell who really contributes what. It also gets harder to socially police people who are attempting to game the system. If some people are successful gaming the system others are incentivized to do so as well. It can be easy to label a sub-optimal outcome as bad management but those managers usually aren't dumb. They usually have perfectly rational reasons for the things they do - it's just not what the policy designers had in mind.

Let me put this another way. Can you think of a system of management that doesn't rely on the judgment of managers? No matter how you slice it corporate America works like this...

+ Executive Staff gives an assignment to a certain manager.

+ Manager divides that assignment up and gives it to his team members

+ Team members complete the assignment

+ Manager submits the completed assignment back to the Executive Staff

Given that scenario there's no way anyone other than the manager can know who accomplished what meaning no matter what system you implement it's always going to come down to the judgment of managers.

(which is why hiring good managers that don't try to game the system is so very important)

sounds like a slave driver environment, if you ask me. It can't be good for morale, having people rotate through the company every month.

It depends on whose morale. I would love to work at a place that made an effort to place only brilliant people around me and that didn't tolerate less. Netflix works in the same way.

I agree. But if the guy next to you, working the same stuff as you, is paper worth 5mill more just b.c he started there 6 months earlier than you, then the equation changes.

Well, you did not have to say yes to the job offer in the first place. Or next time join early.

The question is, would you love it when they asked you to leave because you're not brilliant enough?

I wouldn't intend to work there and let myself be kicked out.

Neither did the employees who got kicked out, but it isn't entirely within their or your control. You may simply lack the ability to stay out of the lowest performance bracket.

Or HR's metric for determining who is in that bracket may be a) wrong, as they don't understand the business or b) skewed.

Let's say at a large company the HR department worked out an "objective" means of ranking employees, but when they ran it it turned out that the bottom 10% were overwhelmingly women/an ethnic minority/whatever. They're going to tweak it until it delivers the result they want, in which case how confident can anyone by that it was "objective" to start with?

it is nothing like a "slave driver" environment. People are extremely smart and focused on building cool things fast - top to bottom.

oh please, it's facebook, not Google, their "cool" projects involve translating the site into pirate and latin languages.

+ with ~1000 employees, chances are you as a programmer are most likely doing mundane crap. The "extremely smart and focused" people don't take well to having to do bullshit projects.

you have no idea what you're talking about

Um, you know ivankirigin works at Facebook, right?

someone whose company was acquired in order to get them into Facebook, will most likely have a different experience and quality of projects, than the average drone. + he's been there what...a month? he is still biased by the honeymoon phase.

Tipjoy wasn't actually acquired -- they hired Ivan, though there may have been a little extra on the table:

http://www.techcrunch.com/2009/08/22/facebook-hires-tipjoy-c...

There wasn't anything extra. That story if full of shit.

To be clear, I didn't mean any foul-play. Quite the contrary. I remember reading that it was chill in the HN comments and don't think I'd bothered to read the original article.

Basically I thought you might have gotten a better than average contract there as a devel since you had a background doing cool stuff and was clarifying that Tipjoy wasn't actually acquired.

No problem, I just wanted to clarify.

You've been Annie Hall / Marshall McLuhan'd!

[Edit for obscure reference: In film Annie Hall, someone criticises Marshall McLuhan in a line at the cinema, and he pops out from nowhere and says 'You know nothing of my work'. It's quite a famous scene.]

With the number of users facebook has, there is no room for shoveling crap in the business model. Everything has to be done efficiently and with focus. The cool projects (according to me anyway) are dealing with the scale and the constant evolution of the site.

There's a lot wrong with this statement, so I'll address the thing that sounds the least wrong.

Have you seen how in-depth the translations on Facebook are? I used Facebook Pirate for three or four months because I was so delighted at how many variable phrases they introduced regarding every small item on the page. It was as thorough a translation as I've ever seen online. (As an unrelated aside, Facebook supports the Konami code, which makes it the most mainstream geek site on the planet, and their Konami code triggers something wholly unexpected and hilarious.)

I don't know Facebook's employee breakdown, but remember that Facebook offers multiple products, each of which is a fairly complex offering. I can see their Photo app being worthy of a large interesting team; ditto Events, Notes, Video, their link sharing, their search (and doing search for Facebook sounds much more interesting than doing search for Google, because you get to play with so many concrete variables), their public pages offering, their iPhone application, and who knows what else they're cooking up. They've also got a unique graphic style that I'm sure a handful of people work on, and there's the usual stuff of marketing and advertising that's fun no matter where it is.

It doesn't seem completely insane to me that working for Facebook might be really fun, even as a grunt. Unlike Google, which always sounds like working there is 90% backend, Facebook has a lot of stuff that's immediately noticed by its users. It's one of the few big companies that I'd actively like to work for after graduation.

Whereas Google's "cool" projects involve, umm, finding new things to insert ads into.

With 20,000 engineers now, Google is as "cool" as HP or IBM.

i think you mean 20,000 employees, not engineers.

I can imagine infrastructure alone would be a lifetime of awesome projects at FB.

or maybe... more like lifetime of a nightmare

Hive is a pretty sweet project and also super useful.

Hey, Google is also translated into pirate and latin!

http://www.google.com/intl/xx-pirate/

http://www.google.com/intl/la/

We have Klingon too -

http://www.google.com/intl/xx-klingon/

I once heard Enron used a similar strategy, although I can't recall the source. They would annually cut their most "unproductive" employees. It turned out that those who remained knew how to work the system and to win at any cost. Hopefully Facebook will fare better.

A lot of places do/did this. IBM sales reps were subject to the 70-20-10 principle. 70% of people are average, 20% are above average and get bonuses and 10% are below average and are fired. It was brutal for morale and hurt productivity in a lot of ways.

How is this brutal on morale? In fact, how is this not what goes on at every company of IBM's size?

The reality is a company the size of IBM is always going to have a turnover of 10% or more so the "lower 10% rule" is just a way of getting rid of those people who can't do the job. The 70% might feel a little demoralized but if they're good employees they'll use that to make themselves better. The upper 20% are the best of the best and deserve to be treated as such.

So to me the 70-20-10 principle just seems like IBM being honest with employees about where they stand and giving them a chance to recognize it and do better if they so choose (some people are happy with average).

Jack Welsh was doing this during his time at GE. The bottom 10% of the workforce would be let go every year.

It's simply an alternative employment strategy to Google's attempts at early optimization (making it hard as hell to get in) which they even concede produces a lot of false negatives.

You're correct. I think they described this process in the documentary "Enron: The Smartest Guys in The Room" . I remember in interviewers with traders there that this was one pretty motivating factor for a lot of the corners that were cut at the company.

yeah, but new engineers don't have the same amount of stock options that the earlier ones.

I have been in a startup, where the company had matured some, and the options given to new people were almost irrevelant, while the people that had higher positions, had been there longer, and would push people to work hard, b/c they had the incentive to do so.

People realized this, that they were working startup hours, but not getting options, or a big corp pay either, and getting the shaft. A lot of employees and managers just left. I went through 6 different managers in one year. It got ridiculous, and damaging to the morale.

This is basically what happened at Google except that they had the sense to reprice the striking price of the options to make them meaningful again.

It's not like this is revolutionary. Change "Mark Zuckerberg" to "Bill Gates" and "Facebook" to "Microsoft" and what you have is just about every article that was written about Microsoft's business culture in the early to mid-90s (back before everyone hated them)

Meritocracy, relative performance, individual incentives...these are all Microsoft innovations from decades ago. Kudos to Zuckerberg for taking note of a successful formula but credit still should go to Gates an co.

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