Thursday, April 21, 2011

Microsoft's New Review and Compensation System - Now With More Cash!

"I am not a number, I am a free man!"

Well, at least we don't have a Six to give out.

Goodbye E/A/U + 20/70/10[I/II] and hello 1 to 5.

Kim, we just don't have a Limited to give to you anymore.

So we have a new review model. And a rework of our compensation. With cash, cash, cash. Forget that Microsoft stock because it's dead in the water and today's Microsoft employee is all about the paycheck. And if you actually work on creating products at Microsoft, you're getting an extra R&D bump.

And with the new 1 to 5 review score we have a new curve, too. 20% of you get a 1 (whoo-hoo!), 20% of you get a 2, 40% of you get a 3, 13% get a 4, and 7% get a 5. And probably fired.

Your review score is now a composite of: your results (where results, not effort, matters), what you did to get your results, and what your proven capability is. With an ideal that teamwork and feedback is now part of the review system, though it's not clear if feedback is mandatory via peer based reviews.

It's too bad that the internal InsideMS blog has been eradicated and wiped out of existence. It could have lived on a little bit longer so that the review system could be discussed there.

So what are your reactions?

Is the InfoPath-based review form dead? Please? Can we go back to a simple little Word form out of respect to our new simplified review score?

The next thing I think of, as a manager, is how is calibration now run. We used to do two stack ranks for the two review scores. Now we either do one or we do three (results, what was done for the results, and proven capability). Three seems crazy.

Next is whether this will indeed help retain employees. We've been losing a lot of good people and the Puget Sound area is ramping up in hiring. Google has always been draining people away. Facebook is now grabbing some great developers and Amazon is hiring like crazy.

So now you have some mystery amount of cash in your future to look forward to. And a simpler review score. But is that what you really want? Is that what you told LisaB during her Listening Tour? Given that Microsoft stock is in the toilet, does the future influx of cash coming in September make you feel better about working at Microsoft and will this make up for having reduced benefits (e.g., a new medical plan with more of that new cash out of your pocket)?

Will you be honestly told during the whole year how well you're doing so that you have frank feedback that helps you be fulfilled with your job? A problem with Stack Ranking is that leadership (once burnt by the review model) holds back praise due to the peer relative Stack Rank pushing a person down and then creating a "surprise" gap between the past praise feedback given and the review result earned. That's not fixed.

Anyway: let's celebrate saying goodbye to the 10% / Limited rating. Since the 10%-ers were not actually fired you ended up keeping people on staff who were designated as now plateaued and limited in there career at Microsoft. They had reached the end of of the ladder. These now demoralized individuals with no hope for future rewards or promotions should have at least been given a Peter Principle plaque or something.

Old school: with respect to the new Scarlet A, I assume that a 4 is the old 3.0 and that a 5 is a 2.5 and that having either a 4 or a 5 now limits other group's interest in your career, which kind of means that we've gone from making 10% of the employees unattractive to making 20% of the employees unattractive. We'll see if that's the case as this plays out of over time.

So, chair-rearranging or just what you were looking for?


-- Comments

648 comments:

1 – 200 of 648   Newer›   Newest»
Anonymous said...

is there clarity on whether the reduction in stock target (what is being added in the base for FY11) is one time or permanent. at least it looks permanent to me as the FY12 table has the same 100% stock target (against rating 3) as FY11. what a deal!! given a one time bump in base by cutting the stock permanently.. something stinks.. would love to be corrected.. HR guys here?

overall, meh (if the stock cut is not permanent). if it is, WTF!!!

Anonymous said...

My understanding is that some part of the stock is moved to the base pay, and that is just it. So actually the compensation is changed very little... And why they do not make it work now? I need to wait for about half a year to get the new pay? WTF

Anonymous said...

Going meta: This is looks like how Microsoft ships products.

* "Here are the features we've heard our customers asking for." (I'm not convinced LisaB did SFE, so this doesn't feel like it addresses any actual problem).

* "Here's the complicated specifics on how this will work for you based on a bunch of assumptions."

* "Please see your TAM (i.e. manager) for your specific situation and prices."

* "This product won't be available for 6 months, and is 1 year later than our competition."

In contrast, Google just said bump by 10% on this date. And they've been paying more all along.

So, net, I think this was an obvious step that's almost too little too late. They haven't fixed the core problem of the fixed curve; you can't reward collaboration if you incentivize people to compete with each other. And they aren't shipping in time to match behaviors with rewards.

Anonymous said...

Ballmer trying to bribe his employees is not going to save his job.

Anonymous said...

"Plus ca change..."

So we go from the old 1.0-5.0 scale (effectively 2.5-4.5 only) to the 20/70/10 back to a new 1-5 scale (except the order is reversed). Oh, and if I interpret the news correctly, it's effectively a 20/20/40/20 scale. Which means the only thing done is to break up that huge "70" block into two (modulus some adjustments). As the saying goes...

No matter how the chairs on the deck are adjusted, it doesn't address the fact that MSFT wants an inequitable compensation system to keep highly capable individuals motivated, while giving lip service that we should "all work for a common goal." The system is geared for individual compensation where I'm constantly in competition with my peers for my slice of the pie. There's little incentive to help out others, unless their failure will directly affect my success. Not suggesting that we go too much the other way, but it seems a more significant structural change is in order. Perhaps a "team bonus" factor?

Ah, perhaps I'm just getting more jadded with time...

Anonymous said...

I agree with mini. The curve still exists. Now the bottom 20% will be screwed instead of the bottom 10%.

We've already pushed out a lot of good people through our broken callibration process. It might make sense to clean house every 3-4years but doing it yearly is broken.

If we need to clean house yearly then we aren't doing a good job of hiring or managing out underperformers.

Anonymous said...

I'm getting confused, so the compensation is not changed? Just stock => cash?
Someone please help me figure out.

Anonymous said...

As an MS employee interviewing tomorrow for a job outside the company, I find it odd and frustrating that the changes announced today don't take effect for 5 months. I suppose that's Microsoft's idea of "agility."

Am I supposed to turn down interesting offers I get in hopes that come September I see a huge pay increase (that is really just designed to put me on par with what I'm likely being offered elsewhere)? Is better pay the real reason I was thinking of leaving anyway?

It certainly does make my decison harder.

Anonymous said...

Smoke and mirrors from the masters of FUD.

Anonymous said...

From the looks of it this change is just rearranging chairs on the deck of the Titanic. Comp doesn't really change. The form of comp changes. Less stock and more cash up front.

That's probably a good thing. I suspect Ballmer expects our stock price to fall over time. It would be demotivating to keep giving stock as a primary motivator if its value fell durign the vesting period.

Getting cash up front is good. Then I can invest it in growth companies like Apple and get a postive return. Rather than keeping it in MSFT stock that is likely to fall over time.

Anonymous said...

This is no different from the existing stupid review system. I wish they'd just moved to 1-5 without bucketing (20%, 20%, ...). This will take the pressure off of managers to give someone 10% or new 13%&7% because he has to. We can still use the points to determine whether to reward someone or fire. One could ask, what if it's misused by a manager? Yes, even with the current system, only (99% of the time) he decides about his directs.

Someone is too worried - in upper management (or he is really liking the way his directs are fighting with their peers) - that if we stopped stack ranking people, they will stop performing.

This is not doing any good to anyone except those opportunistic.

Alyosha` said...

Chair rearranging.

For engineers, differentiated compensation within bands is just bread and circuses. The real money is in promotions, which continues to be ad-hoc, somewhat related to seniority, dependent on business need and commeasurate an increased level of responsibility. AS IT ALL SHOULD BE.

Engineers are not salesmen. There is no sense trying to pay them "on commission" when their output is much less quantifiable and its relationship to the bottom line much more murky.

Anonymous said...

The continuation of the forced curve sucks. Just shows that Ballmer and Brummel have no trust in their management team to allocate budgets for raises, promotions, bonuses, and stock.

We are living the old Soviet system of having 5 year plans where the state knows best.

Anonymous said...

That base salary bump for R&D? "All disciplines except for Content Publishing."

Fuck. You. Too.

CPLT - stop hosting BS summits and spend that time and money advocating for the discipline and career development. This just shows how much of a dead end the discipline is. Good luck with recruiting our replacements!

Anonymous said...

Is the timing coincidence that it's on the day of earnings? Let's hope not but looks that way...

Review evaluation itself doesn't look that different. External factors/results are still not part of review and internal competition is still first. There should be additional rewards for external success so then maybe we can break the slow market response cycle.

Anonymous said...

So does this mean the next announcement will be a new round of layoffs to kick off the new review model?

(I'm kidding, but I wouldn't be surprised to hear it)

Anonymous said...

The key problem with the compensation system at Microsoft is, and always has been, that there is no reward for teams or divisions that are doing well. A team that totally fails to deliver still gets the same reward as a team that ships great software. A much better model is one where teams get a score, divisions get a score and the company gets a score and your individual score is multiplied up or down by these other factors. That way there would be a strong incentive to work together as a team, people will want to work on teams that are going to succeed and are well run, and even the 3.0 solid performer can still do well if they are a necessary part of a team that's doing great. With the current model upper management makes ZERO tough decisions at the appropriate level (i.e. division or team level) about how to allocate rewards.

Anonymous said...

What a message to send to the investment community that you've realized that your stock is no longer a motivator for your employees.

Depressing. It's times like this that make me wish the company would simply trade my existing shares/options for additional vacation time.

Anonymous said...

Is anyone else insulted LisaB is on sabbatical while this decision gets rolled out?

I would get in trouble if I went on vacation during calibrations...

Anonymous said...

"There's little incentive to help out others, unless their failure will directly affect my success."

Then your org is broken.

One of the best ways to be a top contributor is to help others. If you guide others to success you're basically multiplying your positive impact to the overall product.

Of course, this only works if you're A) already successful in YOUR work, and B) actually helping and not randomizing or interfering. Not everybody is cut out for this, which is why not everybody can reach senior/principal or become a manager.

I have the feeling that people who equate "competition within peer groups" with "be a jerk and push other people down" are usually underperformers struggling to justify their underperformance ("it's the system's fault," or "those people are jerks for contributing more than me"). This attitude likely isn't going to help you grow or change your situation.

Anonymous said...

"A much better model is one where teams get a score, divisions get a score and the company gets a score and your individual score is multiplied up or down by these other factors."

If my review is tied to my team's performance after I've been on the team for 5 years, so be it. I broke it, I bought it. But if that's the case, why would a good employee ever go to a team that really needs help (e.g. how would we ever have turned Windows Mobile 6.5 into Windows Phone 7)?

I'm not saying I totally disagree with you, but the fact is that this proposal also creates a model where you essentially punish good employees for being on bad teams instead of rewarding them for trying to improve things.

Incentives are HARD. It is very difficult to know ahead of time what you are rewarding. People always say "The stack ranking system encourages competition between employees!" Personally I think that's bullshit for two reasons: 1) When's the last time you honestly said to yourself "I'm not going to help that person with their job because I don't want them to succeed." If you are actually a capable employee the answer is probably "never." 2) Face the facts: Employment is and should be competitive. We want the best employees. When you interview for a job you are competing against all the others interviewing for that job. It is the same thing with holding a job: Get your shit done well or you should be fired.

Anonymous said...

"What a message to send to the investment community that you've realized that your stock is no longer a motivator for your employees."

Did you feel the same when Google made the exact same kind of change last year?

Schmidt's mail said people wanted this: "We’ve heard from your feedback on Googlegeist and other surveys that salary is more important to you than any other component of pay (i.e., bonus and equity)."

Anonymous said...

Curve still exists. It sucks. Please get rid of forced ranking. Please.

Anonymous said...

>"There's little incentive to help out others, unless their failure will directly affect my success."

Then your org is broken."

Yeah that is correct it implies that the org is broken. But there are plenty of broken orgs in MS.

I have been here 3 years and did 3 internships before coming. I get great reviews. In the group i ended i hardly could get any help from my co-workers i ended improving by reaching out to people outside my team (mentor , DL , garage ,etc).

The problem that i see in my org is that activity and involvement get correlated with success of projects and initiatives. Right now i understand how to get promoted here and its by starting a lot of initiatives that are slightly related with the project but not really the core charter of the work.

Again is right is a broken org is a big company and many of them exist.

Anonymous said...

The HRWeb site is inaccessible, so I have to get my information from Mini-Microsoft. That's pretty sad, actually.

Anonymous said...

wait a minute - aren't you losing a ton of money if you get stock > 100%? Are we penalizing our top performers?

Anonymous said...

After substracting the stock award difference, my salary increase is about 7% (according to the estimate page). After two years of practically no merit increases - big MEH!

Anonymous said...

funny to watch stock drop with this news.

MS needs to go the whole way and admit it's blue chip not growth and push up dividends... that'll help the stock price.

it should also take some of that pool of money that the Execs and Partners are rolling around in and (like Google did) pay an across the board bonus to thank employees sticking with them through a tough time (layoffs, no bonuses for a year, new healthcare system that just takes money out of our pockets etc) - actually do something rather than just craft an (internal) press release

Anonymous said...

question: is there clarity on whether the reduction in stock target (what is being added in the base for FY11) is one time or permanent

According to HR rep I just asked that exact question of, it's one time intended to help boost base salary this year only

Anonymous said...

The most cowardly email I've ever seen sen out by a ms exec (and I've seen so many), once again ballmer shows his lack of vision and purpose

Anonymous said...

Let's see. Increase salary, decrease stock, subtract for FY '13 healthcare changes, = net loss.

Anonymous said...

@Curve still exists. It sucks. Please get rid of forced ranking. Please.

do some scrutiny about past reviews and fire (if i say fire, doesn't mean giving them position in other groups. why to treat them differently) some stupid managers/leaders those are involved in groupism and favoritism.

Anonymous said...

Getting achieved means you'll probably get a 6-7% raise. Is that going to continue every year? If so, I like it :) This could be very lucrative if you stick with the company. But my real question is that actually going to be sustainable to give raises that big each year to 60-80% of all employees...

Anonymous said...

@"Getting achieved means you'll probably get a 6-7% raise"

That's just a one off increase... taking into account the stock decrase.
After this year, the max will be closer to 4.3% rise, the minimum being 0% rise.

Anonymous said...

One thing to remember is that the current review system was implemented by LisaB, and was widely considered one of her biggest accomplishments.

So...she gets credit (and an SVP bump) for dumping the existing review model and replacing it, and now she is getting credit (and who knows what else) for dumping the existing review model and replacing it with (wait for it)...the one that she previously dumped.

Dilbert would be very, very proud.

Anonymous said...

"Dilbert would be very, very proud."

No, that would be Dogbert

Anonymous said...

Too little, too late.

It's more than getting rid of the forced ranking. Better managers are needed.

Anonymous said...

I realize this may be a bit off topic, but I don't know where else to ask it!

What happened to the inside MS blog? I was looking for it today on //msw and it seems to have disappeared! Does anyone know?

Anonymous said...

I left ms consulting last year after being screwed in the reviews for the 4th year on a row (achieved/no promo after tracking higher all year, every year). Doubled my salary and my new company even paid out the equivalent of my unvested stock on joining.

I sometimes miss the culture and people but will never miss the HR.

Anonymous said...

Anyone who thinks stock is a motivator for ANY company post IPO has no idea how things work. It is fine for execs - they get their options at preferred rates. But the average joe - it's like getting part of your salary in scratcher lottery tickets.

And every study ever done has shown that salary is a poor motivator compared with engrossing, interesting work.

Anonymous said...

1-5 ranking sounds like the IBM model. In many ways worse than the 20/70/10 model. Here's an example of what we are in for: Read this

Anonymous said...

"question: is there clarity on whether the reduction in stock target (what is being added in the base for FY11) is one time or permanent

According to HR rep I just asked that exact question of, it's one time intended to help boost base salary this year only"

thanks for the answer. however, check your estimated FY12 stock (the bottom table on the new rewards estimate page). it is exactly same as FY11 (rating 3 gives a good idea as it ties with 100%). so either the IT guys screwed it up or the xl sheet has copy paste error or we are screwed (and the HR rep doesnt know that yet).

Anonymous said...

About a 8 - 10% salary increase for me, assuming a middle-of-the-road review outcome (which is all I care to aim for, I have more interesting things to do with my spare time). Maybe a slightly bigger bonus than last year, but not dramatic.

If stock price doesn't totally tank and wipe out my existing stock awards, I guess it's a nice enough bump to tide me over until the health benefits decline and I go somewhere where I do want to spend some spare time going the extra mile. I'm using that spare time now to get my skills up for that move, but no urgency.

Anonymous said...

For myself, there are at least 3 good things I'm happy about with this news:

1. I expect to be getting 8% more net compensation (conservative estimate) as a direct result of these changes come September.

2. At least on my current team, I find it quite hard to get in top 20% but think it's quite doable for me to get the 2nd 20%. With the old system, I'd be stuck at 70% (average), but with this new one I should have a pretty good shot at getting a 2 (above-average).

3. I'm actually looking outside MS at the moment though not fully committed to leaving. If I do decide to leave, I could leverage my new higher expected MS compensation to negotiate a better offer elsewhere.

Anonymous said...

All of you who think you are makiing more money - think of this:
Say your stock target is 10K, and with the new rules, 4K moved to base salary, and 6K is your new target. What happens if you get 150% of stock? Earlier, you would've got 15K (10K * 1.5) , but now you will only get 9K (6K * 1.5). After adding the base pay hike(4K), you still lose 2K?

Anonymous said...

As long as you have a forced curve, you're going to be screwing a certain number of your employess who do great work.

Your performance evaluation should be absolute, not relative. Either you did a great job or you did not do a great job -- it's impossible to ever make the message "you did a great job, but because we have this curve we're sorry to say that your rating is average" make any sense.

Anonymous said...

ok too funny to me when reading these comments. one of 3 things are happening here.
1. people commenting on here are either not at microsoft
2. can't read
3. are all the underperformers at microsoft.

if you are a mid to high performer YOU Get WAY MORE! gone are the achieved 5 or 7% bonuses. you get a 3. you get taget or highter!

Anonymous said...

as usual a lot of ridiculous comments... I don't believe for a second half of you all who post here actually work at MSFT.

Anonymous said...

anyone notice that 5 is not the best? 1 is the best. That changes everything!!! :-)

Anonymous said...

10 is now 20. that means more room for politics.

Anonymous said...

@anyone notice that 5 is not the best? 1 is the best. That changes everything!!! :-)

noticed. but wht is the change??

Anonymous said...

Huge earnings every quarter (some records) since the layoffs and the 'no bump' review year. If things are so great, where is my retroactive merit increase? Seems we didn't need to screw the employees afterall, so why not go back and fix the mistake? If your review that year should have been a 6% raise, then I want a retroactive paycheck for all the money I didn't get since then.

Anonymous said...

"@anyone notice that 5 is not the best? 1 is the best. That changes everything!!! :-)

noticed. but wht is the change??"


Oh for the love of christ, HE WAS BEING SARCASTIC.

Please tell me you don't work here.

Anonymous said...

I'm a first time commenter, long time reader.

This is a positive change from my standpoint. It's more money in my pocket twice a month vs. having to wait for stock payouts once a year. It's also better if you want to leave the company, because you won't be leaving behind the same number of stock awards. In addition, there is an opportunity for the top 40% to exceed target based incentives vs. the old system which primarily went to the top 20%. Overall I think its a good thing for us.

Bit of a rant here, but one thing that is amazing to me is how many people seem to whine about the deal they have here. If you don't like it, and think you can do better elsewhere, then leave. You're not entitled to anything and no one forces you to work at MS. So if you're life is so bad based on the review system, your compensation, merit increase, etc; then leave and find something better if you're such a rock star.

Anonymous said...

This is great relative to the previous Microsoft status quo, but other companies are giving more than this, and that's today, not 5 months from now. I looked at the hrweb table at what I will get if I am fortunate enough to have them bestow a 1 upon me. A friend of mine was at the same level as me, left for Zynga, and is currently making more than that.

It's good news for many rank and file, and I applaud the effort. As someone who was considering looking elsewhere but waiting to see what this rumored salary hike to retain the talent was all about, I am underwhelmed.

Anonymous said...

The right answer would have been something comparable to what Google did, which would be for Steve to send mail saying: "Effective today we're raising everyone's salary by 5% across the board to help retain our talent, and in addition we'll be making sweeping changes to our review and compensation system this September..."

But because we're Microsoft we fuck everything up. We could have made every employee reinvigorated today, but instead we'll now have 5 months of gossip and hypothesizing and undoubtedly when we get to September we'll see that the same old curve problems are still present under the new system.

Anonymous said...

After I read some of the comments here, I am now sure that recruiters from Amazon or Google are posting in disguise, pretending they are MSFTers. Not that I "adore" the new system, but guys come on, let's be little fair, wait a little more, hear more from your managers.

Anonymous said...

@Please tell me you don't work here.

working as a MANAGER :(

Anonymous said...

I don't think much has changed. Same money sooner - we can debate the pros and cons of this.

And there is curve still. Think of it as commitment rating having gone away but contribution remaining which was always a curve. One difference is the former 70% is more fine grained. But as managers we were already doing this in calibration as 70 H M L.

Nothings changed. Still a food fight.

Anonymous said...

I too was going to complain about the 5 month wait for the increase, until I was reminded that's pretty jaded. Few companies EVER announce wholesale increases. Or as my partner said, "Waiting for 5 months...you know that's not a real problem, right?" I'll await to see how the new review system lands and shoot for at least a "2".

Anonymous said...

"After I read some of the comments here, I am now sure that recruiters from Amazon or Google are posting in disguise, pretending they are MSFTers. Not that I "adore" the new system, but guys come on, let's be little fair, wait a little more, hear more from your managers."

Say wha? Your managers will do nothing other than spin the new system as they've been instructed by HR.

The right answer when it comes to Microsoft -- as we've clearly seen over and over again -- is to ALWAYS view every change to employee compensation with a high degree of suspicion. And NEVER take your manager's word for anything, as they are only here to make whatever the company does appear like a positive thing for you.

Anonymous said...

Too little too late.

Unfortunately still is a very flawed system where many "old guard" managers protect their "old guard" colleagues.

Having said that, when Microsoft started reducing their compensation about 4 years ago, many talented employees left the company. Now most employees that stayed really had nowhere else to go or just had such a comfortable life at Microsoft because they were there for so long. Don’t get me wrong, there are still very talented employees, but most of them are unmotivated, because either way there is really no economic incentive to do a great job.

I think HR and Ballmer finally figured that out, but attracting talented and energised employees will be very difficult to do. What I believe they are trying to achieve is to stop the bad churn that Microsoft is having. Probably more of a band aid solution than anything else.
I’ve had many friends leave for Oracle, IBM, SAP, Cisco, EMC, Google, etc. Also many that are at Microsoft are looking for a job outside the company. Trying to hire back or get experienced employees back at Microsoft will be a daunting task.

Good luck!

Anonymous said...

WHAT ABOUT THE EX-EMPLOYEES WHO WERE VICTIMIZED BY THIS REVIEW SYSTEM'S ABUSE

marianne said...

Best comment so far...
"They haven't fixed the core problem of the fixed curve; you can't reward collaboration if you incentivize people to compete with each other."

Experienced from the inside and from the outside as a consultant. Sad.

Anonymous said...

"I too was going to complain about the 5 month wait for the increase, until I was reminded that's pretty jaded. Few companies EVER announce wholesale increases. Or as my partner said, "Waiting for 5 months...you know that's not a real problem, right?" I'll await to see how the new review system lands and shoot for at least a "2"."

Google did it last year, and we failed to match that move.

Anonymous said...

Ballmer has been failing in one way or another for a decade. Lately, those failures are actually increasing in frequency and seriousness (mobile, now tablets). That has resulted in declining relevance for the company, slowing growth, and a stock that was first decimated and is now dead in the water. The decline in overall competitiveness and market positioning is so bad in fact that it’s now routine to see articles questioning whether MS has a future. Even former senior employees like Dick Brass and more recently founder Paul Allen have come forward and noted the issues.

As a result, morale has steadily decreased, good employees have started to leave, investor confidence has been destroyed (along with a couple hundred billion of shareholder value), and in the most recent Glassdoor poll Ballmer was rated the worst CEO by his own employees.

Faced with that set of facts, what the board should do is clear: Ballmer should be fired, something that should have happened at least five years ago. A new CEO should be found who is actually capable of anticipating the future or at the very least the next moves of key competitors, instead of being blind to them or repeatedly crushed by them while making foolish and arrogant predictions about how they’ll fail (can you say iPhone, iPad, Android?). A competent CEO, over time, would have a chance at getting the company back on track, thus improving morale, growth, and making the stock a positive incentive again. Increasing the cash part of employee compensation initially as part of that, could make sense.

Instead, showing the same wisdom that has led to this “lost decade” for the company, the board is committed to letting Steve finish the job he’s already half completed, namely destroying the company. With this move they’ve now conceded what the market has said for five years but SLT has so far denied: the stock is dead money. And since Steve is beyond accountability regardless of how many failures stack up at his feet, they’re now willing to throw money at employees in an effort to keep them - and not coincidentally Steve - around for a year or two longer.

Of course, since most of the problems come down to flawed strategies and leadership who aren’t capable of getting their respective organizations pointing in one direction and executing at the levels required to even match, far less beat, top competitors like Apple and Google, throwing money at employees isn’t likely to lead to productivity gains. Sure, it'll be appreciated and at the margin may help with recruitment and retention. But it's unlikely to result in a commensurate boost to earnings. And of course management's stock based compensation hasn't lead to share gains in a decade, so the statement that they're retaining that is largely meaningless. All of which indicates that this will probably result in a net decrease to earnings and therefore the stock decline will continue. That of course will require more money to be thrown at employees in the future, and so on. Rinse, repeat.

If shareholders don't throw out Ballmer and the board at the next shareholder meeting, MS's continued downward spiral is assured. And a few extra bucks today isn't going to be much consolation for employees when 20, 30, 40% of them need to be laid off in the years ahead.

Anonymous said...

Long time ex-FTE here. I think this is a positive change overall - provides money rather than stock. It is also less diluting of the overall stock. What sucks is that under the old 5-1 system as a manager I had a quota of 3.0s to hand out. NO ONE demanded 2.5s before KT turned up. Now it seems 7% of the population is going to be managed out.

Being as I am fairly skeptical of anything this SLT churns out, I suspect the real reason for shifting money from stock to salary may be due to the aging of the MS employee base. That is, when the 15/55 rule kicks in (15 years with MSFT and 55 or over), all stock vests instantly after the award + any non-vested stock from previous awards vests when the 15/55 trigger occurs. No doubt some HiPo Expo MBA scumbag did the math.

Anonymous said...

Note to Ballmer: buying votes in an attempt to get reelected is illegal. Not that that's ever stopped you before...

Anonymous said...

I like increase in base pay over stock awards but they got to get rid of the curve.

Anonymous said...

"What a message to send to the investment community that you've realized that your stock is no longer a motivator for your employees."

Yeah. Basically this is SLT throwing in the towel on their ability to increase shareholder value, or even maintain it, after losing half of it so far.

Anonymous said...

This change doesn't even come close to matching the offers my friends are getting from Amazon for instance.

In fact, this is further incentive to leave now that it is clear that even a 1 rating will only get you < 10% effective raise.

Anonymous said...

All this change does is give us employees the money to pay for our healthcare in our paycheck - in return for this grand gesture from MSFT, our yearly bonus is reduced.

And to top it off, the math in my "what it means for me" sheet was wrong for FY12. Way to go MSFT.

I love working here, but it is time for MSFT to be honest. Instead of just touting the wonderful news that our base salaries are increasing, they should also say that the base salaries should have been at this new level but aren't since they have only rewarded employees with 2.5% increase in salary over the past 2 years even though we have had record revenue.

What they tout as great changes to healthcare and salary are mearly MSFT cutting costs.

Anonymous said...

You guys need to bust out a skunkworks project or division, with a managerial sanction and mandate, and cherry-pick the necessary people and resources for that new project so that it can thrive on its own terms, independent of all company structures and procedures (or as many as can be stripped away).

This is EXACTLY how the original Macintosh was created. The famous "pirate flag" wasn't a symbol of Apple's total philosophy with regard to the industry. It was a symbol of the Macintosh's role within Apple (which was sometimes parasitic and contentious). When Jobs took over the Mac project, Apple shed its Apple II skin and basically the company re-formed around the new product.

Rather than pretending to obey a Darwinistic approach to employee evaluations, why not create a genuinely Darwinistic environment like Apple did back then?

Anonymous said...

"funny to watch stock drop with this news"

What's funny about it? The company admits the stock will stay dead AND it's increasing its cost. Unless the latter results in a productivity increase, which is unlikely, EPS will take a hit. All things being equal, management's admission plus lower EPS = a lower stock price, guaranteed.

Anonymous said...

Is there any information on promo increases at annual review? I didnt see it around in the FAQs

Anonymous said...

At least its not tied to how well we do on social :-)

Somebody "+1" me!

Anonymous said...

"But as Microsoft continues to try its hand at competing with younger rivals such as Google in Internet search and advertising, some say that using an improved dividend to attract investors is a bad move.

“It’s a way for investors to dislike them even more, because they can’t keep up with Google and Apple,” said Jeffrey Sica, chief investment officer at Sica Wealth Management, which holds Microsoft shares. “As someone who has owned Microsoft for a number of years, it’s lessened my hope that things will improve anytime soon.

“People never will see Microsoft as a utility-type stock. They’re a growth stock; that’s what they’ve defined themselves as for decades,” Sica added. “To try and play both sides of the fence is a waste of time.”

Anonymous said...

LisaB is on sabbatical while this decision gets rolled out?

Humm... Sounds suspiciously like she is done. Appropriate considering what a disaster the last review system was. Isn't that her big contribution during her tenure as HR VP?

Anonymous said...

How many years will it take to get the review tools to work with the new review system? It was such a painful transition last time.

Anonymous said...

at least one good news :)

Alyosha' said...

And I guess the kabuki dance around 'commitments' remains, in which they are custom-tailored to your unique position yet somehow identical to those of your peers.

A wise man once said: pay your employees fairly, pay them well, and then do everything in your power to help them forget about money. In this regards, Comp 2011 is a failure.

Anonymous said...

is it going to work?

Anonymous said...

A lot of misinformation here. The pay raise looks to be substantial, and overall benefit increase is quite a lot, particularly for those in the middle of the performance curve.
Might just be my Geographical area, though, I can't say. This looks like a serious attempt to address employee dissatisfaction.
However, the forced ranking still undermines teamwork, and how much of this gain is set to be wiped out when the new health care plan kicks in?

Anonymous said...

The forced curve is simply mindless micromanagement. How about training and empowering managers to do the "right thing". Including allowing them to learn from their mistakes. That's how people learn and grow. Not by being told what to do by some mindless rule implemented by some wonk who has never even met them or their team.

Anonymous said...

stocks down? no welcome :)

Anonymous said...

The compensation changes seem interesting, however, I thought the core problem was incomplete / irrelevant products, not how/how much employees make. How about a compensation system where executives and senior PG leaders futures are measured on the real industry satisfaction and adoption of their products and not artificial scorecards?

I think a by product of Microsoft continuing to move to the Sams Club Scorecard, "what have for you done for me lately" model, is that the vast amount of people at Microsoft don't take risk, don't innovate, don't provide real feedback, don't measure themselves against their market success and don't question the oftentimes poor directions from on-high for fear of a U, sorry 5.

I think the ultimate goal of executive leadership was to turn Microsoft into the GE of technology, they keep getting closer every day, except for the innovation part. The company is mired in internal yes-man politics, meaningless scorecards and under resourced businesses.

It's too bad too, because there are a lot of very smart and passionate people there who really thought they could make a difference, not just implement a difference some disconnected executives wants.

Anonymous said...

I've been a reader of this blog for quite some time, but have never added a comment, but feel ashamed to work for the same company as some of you leaving uneducated comments.

A few things:
1. If you are upset that Microsoft didn't match what Google did, then go work for Google.
2. If you don't like your compensation, go get a new job elsewhere.


I read these commments and often wonder if most people have worked elsewhere because Microsoft employees have a pretty good deal. If you have worked somewhere else, you would realize that.

Anonymous said...

@A lot of misinformation here. The pay raise looks to be substantial, and overall benefit increase is quite a lot, particularly for those in the middle of the performance curve.

i liked your optimism. can you explain with some numbers as an example?

Anonymous said...

On the one hand, I'm glad to see the boost in compensation.

On the other hand, it is painful to see how even good news can be mishandled by the SLT. The right way to do this was to give an immediate boost, followed by the changes come September -- not to leave it hanging for half a year.

Anonymous said...

I worked at MSFT for a decade- left for the startup world. Every so often, I think about going back. Then I come here and find out that the one time silk purse is really a sow's ear.

It looks like the C-levels have nothing new to offer. The chairs are being rearranged while Google steams ahead. I would like to find a Truly Great Place to spend the next fifteen years, but it sure doesn't look like that place is in Redmond.

Anonymous said...

I don't think these comments reflect opinions based on any real understanding of the new system. If you check out the tools and the rewards we can get in the new system you are BY FAR getting more money in your pocket (at least if you are 4 or 5 and even 3 looks decent). The increases are HUGE for engineering folks in lower bands especially. I enjoy the work I do and the team I'm with. That with improved pay are shaping up for a great few years.

If you are that unhappy with the pay/new system- I'm thinking you're likely equally unhappy with your work and team. Maybe it's time for you to go. No one is made to stay here- find work you love!

Anonymous said...

Given that Microsoft stock is in the toilet, does the future influx of cash coming in September make you feel better about working at Microsoft and will this make up for having reduced benefits (e.g., a new medical plan with more of that new cash out of your pocket)?

Bahahhaaaaa!!

Sometimes perception is worth more than reality...

Anonymous said...

I think a lot of you are not quite understanding the advantages this new system is giving the company with regards to new/young employees, which are going to be the future of Microsoft.

I received my salary offer a couple years ago when the economy was at its worst. Due to that, I was brought in at a lower salary than people that were comparable to me in level and performance. Look at it from my shoes: I came into the company with a lower salary than my peers, into a complex system that although seemed simple enough on paper, was anything but clear.

Fast forward to this new system, where my salary isn't limited at all due to when I received my offer and what base I came into the company with, and where a simple 1-5 system lets me know what I want to shoot for (a 1 or 2).

It may not be the best system in the world, but it has DRASTICALLY reduced my frustration with it. Knowing that my compa ratio was very low compared to my peers had me interviewing around with other companies, as I was even told by mentors that its very difficult to change your salary once in the company. Now I know that within my level and within my review rating, I am making the same base/bonus/stock as others.

Don't underestimate the improvement of this system in the eyes of the younger employees, which this change is openly geared towards making happier.

Anonymous said...

Intentionally flipping the order of a high review score (old: 5 high; 1 low to new: 1 high; 5 low), looks like a conscious effort to introduce cognitive dissonance.

If you think management is magically going to be able to measure teamwork in the "new" system and reward it, you might be disappointed.

More money for the "average" masses might buy Ballmer more time while the confusion over which employees to treat like a pariah sorts itself out.

Steve is tricky.

Anonymous said...

Is it really true that Content Publishers are excluded from pay raises? It wouldn't surprise me, but I don't know where the poster got that idea.

Anonymous said...

And there is curve still. Think of it as commitment rating having gone away but contribution remaining which was always a curve. One difference is the former 70% is more fine grained. But as managers we were already doing this in calibration as 70 H M L.

Nothings changed. Still a food fight.


Steve increased the area in the low end of the curve and labeled the 70% bucket with what they were already doing.

It will be interesting to compare R&D costs in the coming months.

He might have just reduced costs. The Board of Directors will like that.

Anonymous said...

"The forced curve is simply mindless micromanagement. How about training and empowering managers to do the "right thing". Including allowing them to learn from their mistakes."

At a high level, the change from goals+options to commitments+awards really changed the dynamics from an ambitious attitude (high risk, high gain) to a conservative one (low risk, low gain). I've seen people set some really high (and good) goals in the previous model and benefit when develivered. Now, its low risk commitments for reduced but guaranteed compensation.

To make sure everything is open and transparent & team player oriented, achieve the commitments using the "design by consensus/committee" approach.

No fixes for the root cause issues of the review system. Congrats Steve!

Anonymous said...

interesting to speculate on what this says about the economy. does this mean that the job market and hence the economy is getting better, or just another sign of the economic bifurcation between the haves and have-nots. keep in mind that MSFT is increasing comp in an environment where overall unemployment is 8.9%

I work in the field. This is a good thing in that it will raise my comp (particularly by expanding the top 20% concept to a top 40% concept) but it also comes at a time where benefits are being cut which will claw back quite a bit of that (particularly for us with >2 kids).

Other changes I would like to see in HR:
sabbatical: appears to be only for L66+ after 10 years with SVP permission. How about 4 weeks after 7 years, 6 weeks after 12 years....

better field benefits outside of Redmond. live in seattle you get all of the infra of campus + connector. the average cost for the campus employee has to be 2X the field employee

lastly, interesting about the stock. div yield is 2.6% and PE is 10 with a AAA credit rating. amazing. bump the div yield to 4%!

Anonymous said...

WHAT ABOUT THE EX-EMPLOYEES WHO WERE VICTIMIZED BY THIS REVIEW SYSTEM'S ABUSE

Steve doesn't concern himself with previously ground sausage.

Grist for the mill. A new batch for the meat grinder graduates every year.

Since results matter in the new system, that guy with the brain tumor better get back to work. He might get fired.

It's a brilliant way of reducing health care costs - don't give ill employees leave and evaluate them against their healthy peers.

Ballmer is ballsy. Microsoft always tried the "he might be faking it" route with depression but the guy has a tumor in his head and they're using the same reasoning to deny him paid leave.

Anonymous said...

Click the link in the ballmer mail. Seeing that page made me mega-happy.

It tells you how big an award you get across the board. This is amazingly awesome. No more surprises when you try and figure out what an E/20 means and why you got some random award and why the stock doesn't match up to your expectations.

You know what you're going for and if you get it, this is what you get. Huge morale boost over here.

Anonymous said...

Some real numbers.

I am a reasonably new SDE II (lvl 61).

Base: ~92,000

New pay:
1 - ~108,000
2 - ~106,500
3 - ~105,000
4 - ~104,000
5 - ~ 95,500

Estimated Bonus:
1 - 18%
2 - 13%
3 - 10%
4 - 5%
5 - 0%

Stock:
1 - ~12,000
2 - ~ 8,500
3 - ~ 6,500
4 - ~ 3,000
5 - 0

Stock Target (i.e. 100%) 2010 - ~10,000
Stock Target (i.e. 100%) 2011 - ~ 6,500

What I see are numbers that are competitive to other offers I have seen.

I don't think that the new numbers are going to have much effect in whether I choose to leave. After all, if money was a primary motivator I would have left long ago.

-out

Anonymous said...

ex-softie here who left because of the culture the curve created....
I sincerely hope this change delivers what the optimists are expecting, MSFT really does need it. Looking at the recent hires and promotions, you folks must be desperate - they would not have made it to an interview a few years back. So desperate you even hire family members now. Anything to retain and attract good talent should be a high priority.

After 15 years I think I have seen it all though, call me cynical, and I am no longer an insider, but I have learned that MSFT is not there for it's employees - so I'd be looking for the catch.

Anonymous said...

"You know what you're going for and if you get it, this is what you get. Huge morale boost over here."

Couldn't have said it better. Clear, concise, you no longer feel like you're in this game with management where they hold all the cards and the numbers are all mysteries.

Anonymous said...

"I don't think these comments reflect opinions based on any real understanding of the new system. If you check out the tools and the rewards we can get in the new system you are BY FAR getting more money in your pocket (at least if you are 4 or 5 and even 3 looks decent). The increases are HUGE for engineering folks in lower bands especially. I enjoy the work I do and the team I'm with. That with improved pay are shaping up for a great few years."

Hey Einstein -- you men "at least if you are 1 and 2", NOT 4 or 5.

So before you start lecturing people about understanding the new system, LEARN IT YOURSELF.

Until then, shut your hole.

Anonymous said...

More money for the same work and people still bitch...what a bunch of whiners.

Anonymous said...

This isn't the change we're looking for.

Like obama this looks good on paper before the rubber hits the road, but come September we'll start to discover the ugly little suprises (for isntance are 4s and 5s the new 10% that can't move between groups) and how much is that curve a guidance vs a reality

Folks have missed out on merit increases, had to put up with rising costs at home, new healthcare rules and now we get a carrot dangled that won't have any impact for 5-6 months while folks who got a bonus that's 10x what the average softie earns tells us it's a good thing... call my cynical but if they wanted to help morale and recruitment this plus an ad hoc bonus now would have been a much better way to go

wonder what they'll announce at the earnings and if there's any other surprises coming...

Anonymous said...

You know what you're going for and if you get it, this is what you get. Huge morale boost over here."

Couldn't have said it better. Clear, concise, you no longer feel like you're in this game with management where they hold all the cards and the numbers are all mysteries.


The curve still exists so they can just tell you someone else did a better job at the end of the review period to justify whatever it is they want to give you.

You still have no way of verifying that.

Anonymous said...

Talking about being rewarded for incompetence - sechrist here's looking at you....

Anonymous said...

"Folks have missed out on merit increases, had to put up with rising costs at home, new healthcare rules and now we get a carrot dangled that won't have any impact for 5-6 months while folks who got a bonus that's 10x what the average softie earns tells us it's a good thing... call my cynical but if they wanted to help morale and recruitment this plus an ad hoc bonus now would have been a much better way to go"

Yep, which is why Google did exactly that.

For everyone yapping about how awesome this is going to be, keep in mind that you don't know anything until the money is in your account.

There's been no mention about the discretion managers have in assigning awards -- it's entirely possible that what's been posted are guidelines only and that, just like in the old system, everyone will get a different piece of the pie depending on where they shake-out in the stack.

There's nothing here that concinves me it's going to make a significant change. You'll still have stack-based curved rewards, we're targeting double the number of employees now as undesirables who won't be able to move, and real monetary benefit to the average joe won't be seen for 5 months, meaning that when it's much less than we were led to believe it will be old news and the press won't latch on to it.

I don't trust Steve and the SLT as far as I can throw them, and you shouldn't either. They are not trying to give you a better deal, they're trying to save money.

Anonymous said...

I like these changes. I understand the stock awards were for potential but I still would have liked to see vesting start immediately so I get some of the reward right now. That's essentially what is happening and in a better form IMO. I would much rather have the cash than the stock.

Anonymous said...

Unbelievable how much complaining is going on here. Seriously, if you don't like the comp/review/leadership/politics/... (take your pick), then leave!

Personally, I've always been treated fairly & respectfully, have had challenging work, and have always been satisified with my comp (I'm an L64, a/70 or e/70).

Focus on the things you can control, and you'll be happier. You do have a say in whether or not you work at msft.

Anonymous said...

Thank you to the blogger who posted the new L61 numbers. As a nosey ex-softie, could someone please put up a few of the other levels, say L63 and L65?

Anonymous said...

"Given that Microsoft stock is in the toilet, does the future influx of cash coming in September make you feel better about working at Microsoft and will this make up for having reduced benefits (e.g., a new medical plan with more of that new cash out of your pocket)?"

Those complaining about "reduced" medical benefits obviously have not actually looked at the new HSA plan. It's certainly different than what we previously had (and what you can keep until ~2014), but the level of coverage is still the same.

With the HSA, you're responsible for the deductible amount out-of-pocket. Deductibles are $1500 per person (so $3000 for a married couple). Starting in 2014, Microsoft will put $1000 per person per year in your HSA account, so you just have to come up with $500 out of pocket. However, if you sign up now, Microsoft will put $1500 per person per year in your HSA account until 2014, meaning that your deductible is fully covered. Your account balance rolls over year over year, so as long as you have enough money to cover the deductible you'll be taken care of. Of course you can also put pre-tax dollars into the HSA account yourself (up to a certain limit each year), and if you never use that for health expenditures you can get the money out later with interest (think of it as a secondary retirement account).

This is actually a better deal than the old health insurance if you have few medical expenses. Every year that you don't reach the deductible amount, you get money in your pocket. And even if you do go way over the deductible amount each year, the most you'll ever be out of pocket is $500 per person per year.

Stop going to the ER for routine care and you won't notice any difference.

Anonymous said...

Clearly the poster at 2:03 p.m. 1) has no children and 2) has no chronic illness (like asthma, diabetes, heart disease, or myriad other common on-going health issues). Someday you won't be young and healthy but yes, while you are, live it up and enjoy all the extra $$.

Anonymous said...

I really hope this new system changes things, but I doubt it will. One saving grace of the old new system (E/A/U 20/70/10 system) is that it acknowledged whether or not you hit your goals, even if you were otherwise being thrown under the bus.

It's hard for a manager to deny cold, hard, numeric evidence for success, even as they decide to rank someone in the bottom 10%. The A/10% combo, which happened quite a bit probably created some exposure for lawsuits, even though WA is a right-to-work (i.e. right-to-fire) state.

The new system will obscure absolute performance and allow politics to rule all. What goes into that 4 or 5? Who knows, and who can show evidence?

Anonymous said...

Personally, I've always been treated fairly & respectfully, have had challenging work, and have always been satisified with my comp (I'm an L64, a/70 or e/70).

Based upon a sample size of one, you've concluded that everything is fine?

Anonymous said...

"Clearly the poster at 2:03 p.m. 1) has no children and 2) has no chronic illness (like asthma, diabetes, heart disease, or myriad other common on-going health issues). Someday you won't be young and healthy but yes, while you are, live it up and enjoy all the extra $$."

And clearly you haven't actually researched how the HSA plan works. Once you max your deductible, it's pretty much no different than the previous plan. Since the deductible is $1500 and Microsoft puts in $1000 for you, worst case you're out $500 per year. You can cover that with pre-tax or tax-deductible contributions.

People with children are actually better off, because the deductible maxes out at 3 people (you, partner, 1st child). Every child after that is essentially free. Standard maintenance care is still covered in full (dental, $180 eye care, etc), and there's a whole list of other services that are provided for free without requiring your deductible.

Finally, the deductible is a one-time lump sum (per year). It's $1500 of all of your medical costs in a year, not $1500 per issue. Let's say you have cancer and need $100,000 worth of chemo. You pay $1500 ($1000 of which was given to you buy Microsoft, or $1500 if it's prior to 2014), and that's the end of your out-of-pocket expense. In the end, it's exactly the same as if you needed treatment under the old plan, you just have to do the smoke and mirrors show of paying your deductible, which Microsoft already gave you the money to pay.

Anonymous said...

Another ex-softe here.

My first take is this addresses a few cases, but overall is a wash at best. Has anything changed with promotion velocity? if you don't get promoted in 2.5 years and you're automatically given a 4 or 5?

I don't see how this helps the core problem that the guy next to you is your competitor and your enemy, and not the company in the valley making a competing product. Peer review feedback? You'd be a fool to not to look out for number one. I see no reduction in the amount of effort and energy redirected away from making great products and into self-promotion and self-serving politics.

I came to MS via an acquisition. We were acquired because we were a top competitor in our market space. It took about two years for that to seriously unravel. Beating the competition didn't matter any more, beating your co-workers did. We produced less product and far more process. We're not relevant anymore.

Teams that formerly were composed entirely of top performers before acquisition deliberately hired people they would have previously passed on with the intent of giving them lesser assignments and letting them get the 3.0's and 2.5s. Evolution in action.

With a quota for forced attrition, and multi-year product development cycles, and people made unhappy by the curve, we wound up losing a lot of deep institutional product knowledge and skills that couldn't be replaced by new hires in a year.

I just think that what the processes in place actually reward and encourage don't allow Microsoft or its products to be as great as they could be.

Anonymous said...

Personally, while the numbers are more or less the same, more transparency and the fact that I know beforehand where I'm shooting for, helps. _ballmer++;

Anonymous said...

Please tell me you don't work here.

There are several humor/sarcasm-challenged posts here and, yes, I do believe they work at Microsoft. There's no shortage of, ummm..., density in Redmond. The company has earned that quality of staffing.

Anonymous said...

I'm an eternal optimist, so I'm hopeful this will provide a good morale boost (especially for younger employees) and attract better talent.

However, I keep reading people saying things like "If you don't like this or are complaining, just leave!"

I'd just suggest entertaining the idea that there are people who work at Microsoft and actually want to stay and simply complain to further the debate/discussion that makes changes like this happen in the first place.

Telling people to simply leave is like telling folks to move to another country if they don't like the current state of affairs. While it's an option for some, others actually enjoy where they are now but are continually looking for ways to improve it--as we all should be.

Anonymous said...

The poster commenting on HSP is forgetting the additional $1k of additional coinsurance. So per person .. MSFT puts in $1k and if there is an emergency room visit ... you are easily going to spend $1.5k in deductible then another $1k in coinsurance. This is NOT as good as our current health plan which covered that emergency room visit 100%.

Anonymous said...

That is correct. As of 2013, the new plan is NOT as good as the existing plan.

Or more precisely, the plan is entirely as good, the cost of the plan is not.

However, the employee contribution (which, because of how it is structured, can be funded with pre-tax dollars that roll over from year-to-year) is on par with or better than industry norm, and the coverage is still better.

So, yes, instead of the best health insurance package in the country at no cost, we have the best health insurance package at the company at a maximum of around $3k (after-tax dollars) per year. Not as good as it was, still better than what you are likely to find elsewhere.

Anonymous said...

Obviously, the changes to the healthcare plans are complicated that not everyone understands them.

Take your family of 3.
Deductible = $3,750
Coinsurance Max = $2,500
Your family out of pocket maximum = $6,250

Microsoft funds your account $2,500
Early adopter Incentive of $1,250
Total Microsoft funds= $3,750

Amount that your are responsible for before your are covered at 100% = $2,500

Yes, Microsoft is currently funding the deductible, but that could change. They are not funding the Coinsurance Max - this is how they plan to save money.

This is clearly a reduction in benefits.

Anonymous said...

This is clearly a reduction in benefits.

Absolutely. But compare what other companies offer (I certainly have), and even as of 2013, you still won't find a better health benefit package, which means you need to figure the cash equivalent of the difference between the benefits to correctly judge the value proposition of an offer.

Anonymous said...

@There's been no mention about the discretion managers have in assigning awards --

Depending on the answer to this question, this is either a great change for me or meh. The way that I read the charts is that the manager has discretion at level 1. Levels 2-5 are fixed.

If that's the case, as a repeat E-70, that puts me in the 2 bucket which is a nice increase over what I received as an E-70 the last 3 reviews.

If there is no discretion outside of level 1, then anyone who has been told they are a "high 70" will soon have transparency on whether your manager is being honest as a "high 70" is a 2. My suspicion is that a lot of people will learn that they are an "average 70" despite what they've been told. While the news may not be welcome, at least it's more transparent which lets you make a better-informed decision.

For E-20, there's not much difference. U-10s should be polishing their resumes and are now 5s and will likely be managed out.

A-10s are now mostly 4s and don't have the stigma of "10". Only time will tell if 4s get lumped in with 5s or 3s. I hope it's not with the 5s.

I'm sure many groups will find a way to screw this up during implementation, but, on paper, it looks better to me.

Anonymous said...

Never understand why you hate forced curve so much. The bottom 7% leaves, what the problem? If he's that good, he shouldn't have been in the bottom 7% in the first place.

Facebook let bottom 10% go every season. Never saw them complain.

If you don't like what you are seeing, why not quit whining and just leave.

Anonymous said...

Hm. I don't think it's a coincidence that this memo was released the day after this story broke:

http://www.king5.com/news/local/Microsoft-worker-denied-paid-leave-for-brain-surgery-120323299.html

Anonymous said...

"The poster commenting on HSP is forgetting the additional $1k of additional coinsurance."

Yes, my bad, I forgot about that. Why did I forget about it? Because I calculated out what I needed to contribute per pay-period in order to forget about it ($42 per pay period for $1000 of coinsurance) and then setup the pre-tax contribution for that. I don't miss the $84 per month and I know that my HSA will always be fully funded in case I need it. Plus, tax benefits.

Anonymous said...

Never understand why you hate forced curve so much. The bottom 7% leaves, what the problem? If he's that good, he shouldn't have been in the bottom 7% in the first place.

This is a false premise.

If you have 100 people who all earn 3.9-4.0 grades, SOMEBODY is still in the bottom 10%. Will you say they aren't that good and don't deserve to be in school? If you have a group at MS where everybody is working their hardest and meeting their goals, and 10% MUST be given an A or U, are you still going to say they deserved it and should be thrown out on their ears?

Just because somebody gets an A/10 or U/10 or (in the new system) a 5, doesn't mean they weren't performing. Maybe it means the manager had to pick SOMEBODY to screw, and they were "it". Maybe it means they already had an A/10 and no matter how hard they worked, word came down from on high to give them another to meet quota. Maybe they were "too old" or "cost too much for health care" so it was time to manage them out. It happens. I suspect it happens more often than not.

Anonymous said...

Microsoft worker denied paid leave for brain surgery

I wouldn't have been surprised after hearing what Bill & Steve were trying to do to Paul Allen when he had non-Hodgkin's lymphoma!

Anonymous said...

While the discussion about the new review system is certainly interesting, I was hoping to read some comments on Paul Allen's book. Any comment from old-timers?

Anonymous said...

And every study ever done has shown that salary is a poor motivator compared with engrossing, interesting work.

But I bet that finding out how much others at your level are making more than you is a bigger demotivator.

Case in point - the team working on the original Macintosh was highly motivated that they were changing the world especially when told that "The Journey is the Reward"! Until they found out after all the hard work that other teams were getting paid a lot more and were getting bigger bonuses! The other Steve can be a real stingy boss too!

Anonymous said...

Regarding matching of ratings:

E/20 - 1
E/70 - 2
A/20 - 2
A/70 - 3
A/10 - 4
U/70 - 4
U/10 - 5

I do not think that E/10 and U/20 ratings were possible, and U/70 seems unlikely as well.

Anonymous said...

"A-10s are now mostly 4s and don't have the stigma of "10". Only time will tell if 4s get lumped in with 5s or 3s. I hope it's not with the 5s."

Nobody is going to hire either a 4 or 5.

Almost every group is currently under a mandate to pass on anyone who isn't an A/70 or higher, and many groups are reluctanct to hire anyone who isn't a recent e/20.

What's worse? Many groups don't care if you had just a single blip on your review history. I had an A/10 followed the next year by an E/70 and was told repeatedly that the A/10 precluded me from being invited to interview, ever.

The company has just doubled the number of people who can't ever transfer.

Anonymous said...

I had an A/10 followed the next year by an E/70 and was told repeatedly that the A/10 precluded me from being invited to interview, ever.

I had A/10, followed by A/70 and got hired into new group few months ago, after great interview loop.

Yes, many hiring managers didn't want to even talk to me in person when they learned that I had A/10 rating two years ago. Maybe I am full of it :), but I think my current manager is grateful that those jerks passed on me...

Anonymous said...

Never understand why you hate forced curve so much. The bottom 7% leaves, what the problem? If he's that good, he shouldn't have been in the bottom 7% in the first place.

Facebook let bottom 10% go every season. Never saw them complain.

If you don't like what you are seeing, why not quit whining and just leave.


After they get rid of the bottom 7%, where do you think they get the bottom 7% next year?

Anonymous said...

@3:23:00 PM

I seem to be the only one that remembers school. We had a curve there too. Did the curve ever get me down though? Nope, because a curve is a natural thing to exist. In your example you use 100 workers who all get a 3.9 - 4.0. yeah, that might happen, in a dream. In the real world it doesn't happen. It didn't happen in school, and it doesn't happen here. Even if you want to think that it might happen, it won't. Some people are just better than others. I know areas that I am extremely good at and other areas that i am not so good at. If the areas I am not so good at happen to be what I need to do well in to get into the top bracket, I will never get there.

I have worked at microsoft for 6 years and have never felt that i had to compete to get good reviews. I have always had good reviews. Do you know why? I do my work. I don't have to put in a ton of extra hours. I do have a life outside of work, but I still get good reviews. Usually I am left wondering who the bad performers are. I have a had a lot of talks with my lead about that and the fact that I don't know how to get into the top 20% bracket. He has been pretty open about the way they score people and about the fact that most employees don't know anything about the performance of their peers. They only know what they can see, but the leads see a lot more than that. leads get more emails and have more interaction. They can query other teams to see what they think of a particular person.

In the end, I think this change is great. I am looking at a 14 or 15% pay raise. If you subtract out the 2 -3% that I would have gotten as a merit increase, then that still puts me up 12%. Not too bad. Plus I already know what bonus I will be getting. 13% is a great bonus and I don't have to wonder going into my review.

Anonymous said...

welcome back mini...great to see activity again

Anonymous said...

Wow, the comments here are negative even by MiniMSFT standards. Is there anything SteveB could do that wouldn't be panned?

I'm an L64, and this will put quite a bit more money in my pocket - both this year and in the future. How can I complain about that?

The old review model was terrible and the new one looks like it may be better. Again, how can I complain about that?

While it's not as simple or elegant as the "everyone gets 10%", it's still pretty darn good. In the FY12 year, the raise actually exceeds the 10%, and that's assuming review ratings of "3".

Now, the healthcare changes are a different topic...

Anonymous said...

It’s “Sycophants on Parade” in SQL Server -- the partners strutting their stuff to make sure there is room for them in Nadella’s org…

+1 – Especially in SQL Systems Engineering, the GM’s a little general. Several well respected SDEs have left since this once side-lined partner was given a second chance. Sunday, April 17, 2011 6:41:00 AM


Today's announced plan will not change the root of what is wrong with the performance system. Employees will still be reviewed by the likes of the above; stack-ranking will continue to be a high school popularity contest; and team peers are still the competition.

A few dollar amounts have changed, but my guess is that each organization will find a way to drive rewards to a favored few, just as before. That's how it has always been and that's how it will remain.

Anonymous said...

To me, I think there are way more than 7% ppl in msft that are not productive at all.

Anonymous said...

"Is there anything SteveB could do that wouldn't be panned?"

Sure, resign.

Anonymous said...

I seem to be the only one that remembers school. We had a curve there too. Did the curve ever get me down though?

Looks like you really need to go back to school.

In school, the 'failing' 10% don't get kicked out of school. They stay in school, staying in the 10% bucket. Hence, you stay in your whatever bucket you were curved in.

At work, the 'failing' 10% get tossed, meaning the 10% of the remaining 90% of the people get put into the 10% bucket next year.
So, you have:
100% - 10% = 90%
90% - 9% = 81%
81% - 8% = 73% (for simplicity)
73% - 7% = 66%
66% - 6% = 60%

So just after 5 years (assuming no hires), the average guy in the 60% original bucket just got canned.

Anonymous said...

@4:10:00 PM

Your maths is messed up. Why do you assume the new comers won't get into 10% slot? If you are top 80% in the first year and keep it that way, you'll never drop into the bottom 10% given that the new comers are about as good as the average msftees.

that 60% calculation is really absurd. Even if your false logic is right. If you don't want to get kicked out, work hard and don't fall behind others. Is it such a hard thing to do?

Anonymous said...

In school the failing 10% didn't get a job. So, no they didn't get kicked out, but they didn't advance either. Personally, I don't want the failing 10% to continue to work with me. I have worked with those people and all they do is nothing.

Anonymous said...

@4:13:00 PM

I totally agree.

If you don't like competitive (to be honest, microsoft curving model is not competitive at all) environment, why not just find a job in walmart. No force curve there. Wait, I don't even know if that's true.

Anonymous said...

Even if you math were correct, you are assuming no hires. I don't even know what to think about that. So, ms would slowly fire their entire workforce because they would all eventually be in the low 10%?

Ok, so now lets get back to reality. MS continues to hire, and will probably always hire. People leave, people get fired. Room is made for new people. Some of those are good, some bad. More people leave, more people are fired, more room is made. I am personally not worried about ending in the 10% bucket. If I end up there then MS should fire me. I don't deserve the pay they are giving me.

Anonymous said...

I am an ex-FTE. I left because of the nasty politics that I had to deal with at L64. Been a vendor now for a few years but considering coming back.

Can anyone post what L64/L65 compensation (base) starts at these days or perhaps what it might look like with these changes announced today?

Anonymous said...

Your maths is messed up.

I guess you can't read either. I said "(assuming no hires)".

There are tons of ways to game the system, like:

1. Making sure you hire people less qualified than you so they get 10% instead of you.

2. Back-stab the top 10% so that they fail.

3. Not help the new comers learn, so they stay in the low 10%.

4. Move to a team of low performers so that you are now instantly in the top 10% (just like when a lot of people moved to MSN to get bigger promotions etc)

Anonymous said...

@4:20:00 PM

assuming no hires is the same as assuming the company is shutting its door tomorrow. Why don't you just assume that?

Anonymous said...

From above: If you don't want to get kicked out, work hard and don't fall behind others. Is it such a hard thing to do?

I believe you may not be understanding.....the condition is....if there is NO HIRING, then obviously some of the existing high performing will become the new low performing in the next review.

Anonymous said...

My partner is at Microsoft, and in the past few months I've been hearing more and more rumors about a big layoff coming in the next couple of months (something like what they did a few years ago).

I don't understand the compensation changes, and normally don't pay much attention to the rumors, but now I'm wondering if layoffs are next.

Does anyone know? Please no crazy rumors - people always seem to be talking about layoffs, and I think they just make things up most of the time.

Just if you've heard anything it would be great to know (including that they're NOT coming).

Anonymous said...

The review system needed overhauling and extra cash is always nice. But if the major leadership and positioning problems facing the company aren’t addressed, massive layoffs will soon be required. In which case that extra few thousand of cash won’t be much consolation.

Let’s face facts. Ballmer has been failing in one way or another for a decade. Those failures have been increasing in both frequency and seriousness (mobile and now tablets), and have resulted in declining relevance for the company, slowing growth, and a stock that has lost 50% of its value and been dead money for going on ten years. It’s gotten so bad in fact that it’s now common to see articles questioning whether the company even has a future. This year alone the stock is down 8% vs the S&P and Nasdaq’s 6% based on these fears.

No wonder morale has steadily decreased, good employees have started to leave, investor confidence has been destroyed (along with a couple hundred billion of shareholder value and another hundred burned on buybacks), and Ballmer was recently rated the worst CEO by employees in a Glassdoor poll.

It’s time to deal with the core problem and not the symptoms. Fire Ballmer. He has repeatedly demonstrated that he’s incapable of anticipating competitor’s moves and positioning MS to preempt them. Worse, he’s made arrogant and foolish predictions about their demise (iPhone, Android, iPad), been proved wrong in spectacular fashion, and then been unable to mount a timely or effective response. Unless that turns around, moves like this are unsustainable and just attempts to save his hide for another year.

Anonymous said...

Even if you math were correct, you are assuming no hires. I don't even know what to think about that. So, ms would slowly fire their entire workforce because they would all eventually be in the low 10%?

Well, adding all the other variables, would make the point too complicated.

You can always game the system so that you don't fall into that low 10%. I'd been on a team where they didn't hire or couldn't find good enough people for a few years while people left. So, there is a scenario where the math fits. And this is a scenario other posters have also mentioned.

And as some other posters have noted in the past, the quality of hires have gotten worse, helping you stay out of that 10%.

Anonymous said...

assuming no hires is the same as assuming the company is shutting its door tomorrow. Why don't you just assume that?

Of course there are many assumptions you can make. But it can happen on a team-by-team basis.

It doesn't matter if other teams are hiring. But it matters if your team is not hiring. Then you are in the shit hole.

Anonymous said...

I think the point about 20% of employees being unattractive is spot on. The company has very sneakily been aggressively moving to push people out the door or make life so miserable that they leave of their own accord (that's what happened with me). This started with the first round of layoffs and has continued overtly and covertly.

It's clear that the company has an agenda of getting rid of workers who have 10+ years, are 40+, and are below director level.

This new system will support that.

MSFT is becoming a plantation, with Partners sitting reaping the rewards, while young employees and contingent staff do the work.

And that's what this is all about: the Partners. I think they're doing this to boost the share price for Partners by reducing the number of shares that are pumped into the system.

Microsoft is a Partner factory now. All that matters is people making partner and looting the company once they make it.

Anonymous said...

I think MS is COMPLETELY OUT OF THE RECKONING. NOBODY OUTSIDE MS EVEN CONSIDERS MS TO BE WORTHY OF COMPETING WITH GOOGLE. AND THAT'S WHY THEY AFTER GOOD PEOPLE WHO QUIT THE COMPANY, IT'S SO SHAMEFUL

Anonymous said...

THERE ARE CTO'S AT IN MSFT WHO DON'T HAVE EVEN HAVE A BASIC BACHELOR'S DEGREE IN COMPUTER SCIENCE OR ENGINEERING.

HOW CAN THIS COMPANY EVER COMPETE?

THESE GUYS GOT THE POSITION BY PURE SYCOPHANCY.

HA...HA...HA...HA....HA....HA

Anonymous said...

NEW NAME OF MS IS: ARROGANCE-SOFT

Anonymous said...

@outsider above.

Could you please be civilized enough not to type in CAPITAL LETTERS please?

And please make some sense when you talk.

Anonymous said...

Reading many of these posts it would seem the newbies still like the kool-aid. Trust me it gets bitter after a while, actually, don't trust me, just wait and see for yourself.

IMHO the real issue with MSFT now is that working there is regarded as a job, and I think many of the posts reflect that. It used to be a calling, a cause that consumed you 24/7. Maybe a change in review system will help change that. But I think until MSFT gets the passion back we're pretty well farked.

Anonymous said...

The best part about being pushed out of Microsoft (or leaving on your own)?

You no longer have to work for Microsoft.

Lots of other companies are out there, doing more exciting things, with a far better work environment.

Anonymous said...

IMHO the real issue with MSFT now is that working there is regarded as a job, and I think many of the posts reflect that. It used to be a calling, a cause that consumed you 24/7.

That's because it's a job. It is not a religious vocation, nor is it a marriage.

The company isn't loyal to you, although colleagues and managers may be.

Anyone who views working for their employer as a "calling" is just asking to be used -- unless you happen to be at a startup where that signing over of your life "24/7" can result in your being able to retire a few years later.

Anonymous said...

I guess I'm in the minority in actually being somewhat optimistic. That may be because I happen to be in the sweet spot for the changes. As a level 64 in the Engineering discipline it looks like my base pay will go up by about $12k, and reduction in stock award target is only about $1,500 y/y. Feel bad about the Content Publishing discipline as I know people who just got moved into PM roles (from CPUB) and are far less technical than many CPUB'ers.

Anonymous said...

"Through our history, we have been THE place people came when they wanted to make a difference in the world through software, hardware and services. This is as true today as it has been at any time in our history, and the changes we're rolling out today will help ensure Microsoft continues to be the place that top talent comes to change the world."

He knows this like he knew iPhone wouldn't gain much share, Android wasn't a contender, iPad would fail, and MS stock was a good investment.

Anonymous said...

MSFT is becoming a plantation, with Partners sitting reaping the rewards, while young employees and contingent staff do the work.

It's been a PARTNER OR PAUPER compensation plan ever since the stock options were yanked. With today's announcement there is no change whatsoever.

Anonymous said...

I'm unclear how a six figure income counts as "pauper".

Anonymous said...

I'm unclear how a six figure income counts as "pauper".

I'm unclear how 'Microsoft Employee' automatically means "six figure income". I assure you it doesn't.

Anonymous said...

With less hiring, the reaping of bottom 10% will become more noticeable.

http://www.microsoft.com/presspass/inside_ms.mspx

Employment Information

Date Headcount
Sept. 30, 2010 88,414

Revenue and Headcount

Fiscal Year Ending Head Count Net Revenue (US$) Growth Net Income (US$) Growth

June 30, 2010 88,596 $62.48B 7% $18.76B 29%
June 30, 2009 92,736 $58.44B -3% $14.57B -18%
June 30, 2008 91,259 $60.42B 18% $17.68B 26%
June 30, 2007 78,565 $51.12B 15% $14.07B 12%
June 30, 2006 71,172 $44.28B 11% $12.60B 3%
June 30, 2005 61,000 $39.79B 8% $12.25B 50%
June 30, 2004 57,086 $36.84B 14% $8.17B 8%
June 30, 2003 54,468 $32.19B 13% $7.53B 29%
June 30, 2002 50,621 $28.37B 12% $5.35B -28%
June 30, 2001 48,030 $25.30B 10% $7.35B -22%

Anonymous said...

I'm unclear how 'Microsoft Employee' automatically means "six figure income". I assure you it doesn't.

This is true. However, it is possible to earn a six figure income at Microsoft without being a Partner. Ergo, "Partner or Pauper" is untrue, unless six figures makes one a pauper.

Anonymous said...

I guess most of the people here would get half a mil and they would still fucking complain. Same goes for folks posting to litebulb.

Anonymous said...

I'm enjoying this from the outside - I left before that last review abomination was implemented in 2006, and it's truly laughable that they're essentially returning to it now.

The other thing, and Mini made a truly astute comment about this - now we have a 20% in the "your career is almost/certainly fucked" bracket. Playing to the prior comments on this page, I can definitely see this being the place where the most attrition takes place.

Where the illuminati at MSFT can make remarkable improvements though in their performance review system - the Partner level! Lets see the Partners get reviewed in the same fashion and then rewarded in kind - then you'll be able to achieve that wonderful "good attrition" Ballmer referred to so famously in the 2001 Microsoft Company Meeting in the frigid confines of Safeco in October. Maybe put the same standard of review on his ham dipping in mustard during meetings ass.

Anonymous said...

Wow, the comments here are negative even by MiniMSFT standards

Not by litebulb standards. I would love to see from time to time response to that alias saying 'shut the fuck up and get back to work' to those SDE II who know better how to run company than SteveB.

Anonymous said...

I guess most of the people here would get half a mil and they would still fucking complain. Same goes for folks posting to litebulb.

Nice straw man. Do you make them professionally or is this a hobby only? You've left a few tufts hanging out on the side there. Here, let me just pull those out for you and - oh, sorry, the whole thing fell apart. My, my what a mess. Let me give you a big wide brush to tar a few thousand strangers with instead, shall I? There, that's much better.

FTR: My husband worked at MSFT for 21 years. He never once made 6 figures. He never made it to partner. He never made it above level 62. He never wanted to be a manager. He just wanted to do what he loved and what he was good at: write extremely good, clean, functional code, do it well, and actually do something that mattered. He was not permitted to do so. He was managed out at the age of 40+. He was backstabbed, lied to, manipulated, yanked around, forcibly transferred from group to group, handed to hostile managers who couldn't praise a thing he did right, but were quick to bludgeon him for any imagined failure, and who were perfectly happy to let others in the group take credit for things he did. A six-figure income still wouldn't have made all that worth while.

Anonymous said...

The other thing, and Mini made a truly astute comment about this - now we have a 20% in the "your career is almost/certainly fucked" bracket. Playing to the prior comments on this page, I can definitely see this being the place where the most attrition takes place.

That way Ballmer doesn't get blamed for laying people off.

He tags 20% undesirable instead of the old 10% and lets middle management do it for him.

Everybody surviving the lifeboat drill feels more special.

Anonymous said...

I guess most of the people here would get half a mil and they would still fucking complain. Same goes for folks posting to litebulb.

Nice straw man. Do you make them professionally or is this a hobby only? You've left a few tufts hanging out on the side there. Here, let me just pull those out for you and - oh, sorry, the whole thing fell apart. My, my what a mess. Let me give you a big wide brush to tar a few thousand strangers with instead, shall I? There, that's much better.

FTR: My husband worked at MSFT for 21 years. He never once made 6 figures. He never made it to partner. He never made it above level 62. He never wanted to be a manager. He just wanted to do what he loved and what he was good at: write extremely good, clean, functional code, do it


Cry me a fucking river. I mean seriously if your husband couldn't made it to senior in 21 yeras in multiple gourps ... oh year it was everybody's fault but not his.

Anonymous said...

Cry me a fucking river. I mean seriously if your husband couldn't made it to senior in 21 yeras in multiple gourps ... oh year it was everybody's fault but not his.

You're pretty judgmental, and arrogant, since you have no idea at what level the woman's husband started at. Who knows, perhaps he could not get promoted because he used foul language and was too busy to proofread his work, like you.

Anonymous said...

The thing is...not everybody in the world is wired to be a manager. Not everybody WANTS to, or would be a good manager. If the only option one has at Microsoft is to be promoted to one's highest level of incompetence or to be managed out, well, it's probably best for all involved that he WAS managed out. But it doesn't prove he was a failure.

To suggest that he OUGHT to have become a Principle when he is not suited to the job description by temperment, is the equivalent of saying that teachers and soldiers who don't get promoted to Principle or General are therefore useless and have no role in the schools or the army.

The only real error my husband made was not to leave Microsoft on his own, probably 10 years ago, when they showed him their true colors. But we had a critically ill newborn in the hospital, who went on to be a very sick little child for a number of years. (She's fine now.) Somehow, doing a job search didn't seem top priority at the time.

But please, go on flinging your anonymous insults. It's easy to do, requires no thought, and evidently makes you feel good.

Anonymous said...

But please, go on flinging your anonymous insults. It's easy to do, requires no thought, and evidently makes you feel good.

I'm currently looking for a new position outside of MS. I've had two interviews -- didn't get the first one but am hopeful on the second. One of many reasons that I want out is having to work with people like the poster who feels good about making negative remarks regarding a stranger’s situation. This “snarkiness” happens all the time in MS meetings - part of the toxic culture that the curve has created and no amount of money is going to fix the culture.

I'm glad your child is doing well and I hope your husband was able to successfully move on. If not, hiring is really picking up in this area - especially the last 3 months. Make sure his resume is posted on LinkedIn and Dice.com.

Anonymous said...

Cry me a fucking river. I mean seriously if your husband couldn't made it to senior in 21 yeras in multiple gourps

So, everyone wants to be a chief. When that happens, who's going to do the hunting?

In every well functioning body, not everyone can be the head. Even your butt is important even if it's only for sitting! And then there is the shit hole. Even you need a shit hole and I guess you fill that spot right there!

Anonymous said...

You can always game the system so that you don't fall into that low 10%.

No, you can't. If you get reorged under a bad manager right before reviews, and that manager has some inane dislike for you no matter how nonsensical and non-performance-based the reason, you're f'd. Sometimes the reason is simply, you worked on an initiative that the new manager wants to change, so he has to position the old way of doing things as "bad" so that he can "save the day" and score well on his own review next year. Guess what that means? The kingpin of the old initiative takes it you know where.

The problem with gaming the system is that you're not the only one doing it, and you can't control the timing of others' actions.

Moped Cowboy said...

The number of comments that claim that the stack ranking is a popularity contest just makes me sad. I've been a manager for 6 years. One team I was on, the stack ranking was a total disaster, and turned into absurd name calling & yelling. The team I'm now on takes their 'calibrations' very seriously, and the result is that we're at least thoughtful about stuff, so the curve winds up being applied in the least destructive way we can apply it. Mind you, it's still destructive, particularly since we _did_ fire our "Type 1 10%" folks, and continue to manage them _out_of_the_company_, not to some other team that will absorb them. This whole system seems to encourage bad teams to continue to do bad things. There are functional orgs that are trying to make a difference, but then there are broken orgs doing broken things. And HR caters to the latter, and makes working in the former less pleasant than it should be. Grrrr....

And as far as LisaB & Ballmer go, I'd say good riddance, but I'm worried that SteveSi is being groomed as his replacement, which makes me even more nervous for the future of the company...

Anonymous said...

If you get reorged under a bad manager right before reviews...

Yup, you'd be screwed there. Time to update your resume and updating your Link-In profile and checking out Dice.com or Craigslist/jobs etc.

I once read an article that said you should always update your resume on a yearly basis. And it's always better to find a new job when you don't need one.

If you see the hand starting to write on the wall, better start fleeing the city!

Anonymous said...

"What a message to send to the investment community that you've realized that your stock is no longer a motivator for your employees."

--- Not only that you've recognized it, but that you've recognized it about 8 years late! Yeah, let's hear it for agility, woo-hoo.....

Anonymous said...

@In school, the 'failing' 10% don't get kicked out of school.

Not sure where you went to school, but not only did we have people flunk out, we had classes designed to accelerate the process. In my first ever college class (Chemistry), the professor said "look to your left, look to your right, two of you won't be here at the end of the semester".

If you had a GPA below 2.0 and made below a 2.0, you were kicked out of school for a semester. If it happened again, you were kicked out of the university (not sure for how long).

Anonymous said...

"Cry me a fucking river. I mean seriously if your husband couldn't made it to senior in 21 yeras in multiple gourps ..."

-- Pretty much says it all, doesn't it?

Anonymous said...

Not sure where you went to school

Probably referring to K-12, not college! He didn't say which flavor of school.

Anonymous said...

yeras ... gourp

Yep! Can't spell! What an ass.

Anonymous said...

"All disciplines except content publishing"? Wow. So this is what Microsoft thinks of those who explain to the customers how to use their products. Nice.

Anonymous said...

If you had a GPA below 2.0 and made below a 2.0, you were kicked out of school for a semester.

But if your professor was grading on the same curve as Microsoft, 10-20% would be kicked out of school every semester. And since you don't get new entrants (hires) every semester, even if you were getting a 3.0, you'd soon be kicked out too!

So your college example doesn't match up.

Anonymous said...

yeras ... gourp

Yep! Can't spell! What an ass.


Too bad IE still doesn't have spell check.

Spell check may be Internet Explorer's Achilles' heel

Castiel said...

A step in the right direction, with one big flaw:
Why wait 5 months to implement this? Why can't they give everyone a level 5 increase now, and then in September give the remaining difference for those who acheive 1-4?
After 0 raise budget 2 years ago and a poor raise budget last year, asking us to wait 5 more months reduces the effect of this announcement

Anonymous said...

This feels like Santa changing his "Naughty-Nice" criteria the day after Black Friday.

Anonymous said...

A step in the right direction, with one big flaw:

Why wait 5 months to implement this? Why can't they give everyone a level 5 increase now, and then in September give the remaining difference for those who acheive 1-4?

After 0 raise budget 2 years ago and a poor raise budget last year, asking us to wait 5 more months reduces the effect of this announcement


It is easier to measure the changes if it doesn't overlap too much with the old review system.

The top 20% are going to stay anyway. Everyone else can be replaced.

Anonymous said...

When the CEO isn't held accountable, what difference does tweaking the comp system make?

Anonymous said...

"FTR: My husband worked at MSFT for 21 years. "

Microsoft spouses leaving comments about their husbands'/wives' performance are hilarious to me. Of course he "got screwed" for so many years. Of course they "moved him around." Of course "it was all so unfair."

Your husband was lying to you, sweetie. Sorry, but if he was *actually* as good as he told you he was, that would not have happened, especially for 21 years. I've had numerous co-workers and even reports who had complained about how their wives/husbands were asking them why they weren't getting promoted or making the big $$$ than their Microsoft friends were. When Jane's husband got a $100k bonus and took the family to Tahiti for a week, and yours can't even make that much in a year, the justifications start flying and suddenly your spouse is the world's greatest dev who just got screwed by bad managers.

Stop thinking that the stories your husband/wife are telling you about their performance and compensation are true. No one tells their spouse "Sorry honey, I didn't get a bonus this year because I just didn't work that hard" especially when they're spending 10+ hours a day away from work. The spouse of a Microsoft employee is the least objective person in the world to talk with about compensation: They always want/expect more, they have no personal experience actually doing the work, and they only hear about what their SO wants them to hear.

Chances are your L62 20 year vet husband was too busy screwing around (take whatever definition of that you'd like!) to get promoted, and you got fed a line to explain it.

Anonymous said...

When the CEO isn't held accountable, what difference does tweaking the comp system make?

Relabeling the buckets worked so well last time too.

Ballmer is changing the labels on the "average" so they don't feel so bad about being ordinary in his universe.

Increasing salary and cutting benefits worth more to older people he wants to get rid of anyway to make up costs makes sense to him.

You could install a bucket of dirt as CEO and Microsoft would make a decent income with PC upgrade cycles so the band plays on.

How much does the Board of Directors know about the technology business anyway? All those techies look alike to them.

Anonymous said...

In reply to "Thursday, April 21, 2011 7:23:00 PM"....that was a bit harsh but partly true.

Anonymous said...

Do you whiners have any idea how stupid your complaining looks from the outside of The Bubble? No?

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