Looks like Amazon could be the next huge company to give up an employee review process that forces managers to rank employees against each other, making job performance all about survival of the fittest.
Amazon tells Geekwire’s Taylor Soper and Todd Bishop that it plans to overhaul the worst part of the review process, although it has not offered details on the revisions.
A spokesperson confirmed the change to Business Insider saying:
“We’re launching a new annual review process next year that is radically simplified and focuses on our employees’ strengths, not the absence of weaknesses. We will continue to iterate and build on the program based on what we learn from our employees.”
Rank and yank
Amazon has been using a review process known as “stack ranking” or “rank and yank” in which employees are rated against each other as opposed to how well they are meeting their job requirements.
The idea is that the lowest-rated employees will be continuously eliminated, creating a company of only highly productive employees. It came to fame in the 1980s and was made popular by GE’s Jack Welch.
The problem is that it’s really only valuable for a short time, such as when a company is reorganising, stack ranking experts say. Using it long-term tends to create a dog-eat-dog kind of culture.
One HR expert on CNN compared Amazon’s review process to “The Hunger Games.” In a New York Times story about the company’s “bruising workplace” that went viral last year, the review process was described like “choosing sacrificial lambs to protect more essential players.”
The review process isn’t just a trendy tactic. It has been a core part of founder CEO Jeff Bezos philosophy, reported Bloomberg’s Brad Stone. Bezos believed managers needed to raise the performance bar with every new hire so that the only employees that rise through the company would be the ones considered exceptional.
Hated for years
Amazon employees have been complaining about the review process for years on Glassdoor. In one of the most popular reviews, written in 2013, one software development manager wrote:
“Amazon is built, quite deliberately, to be Darwinian. The strong survive and the weak perish (metaphorically speaking) and the ‘bar’ is constantly increasing. The level of performance that would have been acceptable five ago will get you canned today. It’s a kind of crucible that will help you develop a harder edge, if you can survive, that can serve you well in your career and in life, but it’s often not a pleasant experience.”
And the complaints have continued ever since. Just last month, a former software development employee wrote:
“Aggressive stack ranking comes with its own host of problems related to employee dissatisfaction, lack of team productivity, lack of trust among peers.”
This person advised the company to “eliminate or at least change the stack ranking system so that people can comfortably collaborate effectively instead of sabotaging each other’s work.”
These days, stack ranking has generally gone out of favour, especially in the tech industry. After years of complaints by employees, Microsoft ditched it last year. Yahoo also faced criticism when CEO Marissa Mayer tried to implement it in her turnaround efforts.
And now, it looks like Amazon wants to treat employees in a less cutthroat way, too.
Disclosure: Jeff Bezos is an investor in Business Insider, the partner brand of Business Insider Australia, through his personal investment company Bezos Expeditions.