Steve Ballmer is still the CEO at Microsoft Corporation (NASDAQ:MSFT), but the company is already moving away from some of his policies in the face of his decision to resign from the head of the company. One of the more controversial strategies propagated by the executive, the internal Microsoft employee ranking system, is being dismantled today.
According to an internal Microsoft Corporation (NASDAQ:MSFT) memo, which was picked up The Verge today, the company is axing the internal employee rating system in favor of a more collaborative approach. Steve Ballmer has not yet left the company, but its corporate culture is shifting in the hopes that it leads to a more productive future.
Microsoft employee ratings
Microsoft Corporation (NASDAQ:MSFT) has used a stack rating system on its employees for the last decade. The system asks management in each business segment to rate employees based on their performance. The system involves quotas so a certain percentage must occupy the bottom category even if division performance as a whole has been fantastic.
Stack ratings are supposed to increase internal competition. Employees are supposed to take it on themselves to perform at a higher level in order to avoid being given a low rating. The system has its detractors however. It has been suggested that stack rating causes stagnation as employees become less flexible, less innovative and more stressed.
Microsoft Corporation (NASDAQ:MSFT) is still looking for a new CEO. The company’s future lies under the auspices of an unknown executive. There are some theories about who the next boss at Redmond will be, but the company has not released all that much information about the process. Microsoft has had some tough times recently, despite a glowing third quarter earnings report.
There is very little definition about the company’s future as a result of a search for a new chief. The company has moved into hardware in a big way in recent years, and its enterprise business has been performing strongly. The change in corporate culture, exemplified by the end of employee ratings, is sure to accelerate once a new CEO is put in place.
Steve Ballmer, the company’s current and outgoing CEO, is helping to push these changes as part of the One Microsoft strategy. The reorganization is designed to reorganize and integrate the company’s products. For Steve Ballmer, who built Microsoft into what it is today, the transformation cannot be comforting for a man who gave so much of his life to the company.