Microsoft Corporation made an adjustment of its performance management system. By replacing the goal-setting tradition to commitment-setting, and getting rid of its controversial stack ranking system, Microsoft hoped to facilitate its employees’ performance. Such a transformation brings considerable flexibility and effectiveness, but is by no means flawless.
One must acknowledge that Microsoft’s adjustments in performance management is an advance regarding humanization, showing its flexibility and adaptation towards the changing situation. Microsoft’s previous goal-setting system, as mentioned by Shaw, failed to encourage employees to set a specific goal due to the changing business environment; while setting commitments can remind them to stick to the company’s ultimate aim, constantly and through whatever process. By periodically referring to execution plans and accountabilities, commitments are more likely to be successfully achieved.
Meanwhile, the cut-off of stack ranking system can effectively improve employees’ satisfaction and inspire them to work not merely for a higher rating. Microsoft’s previous performance management system confined employees within a specific number which, even worse, might not be set by employees themselves. However, the adjustment indicates the company’s value on individual cases and individual development. Only if an employee fully understands the company’s commitments and develops a sense of identity, can he put every effort to move toward the goals. This can be much more effective than rigidly lay of employees that rank at the bottom.
Nevertheless, the new system is by no means perfect. It cannot be denied that the stack ranking system can to a great extent inspire employees’ fighting spirit; after all, it should be awarded that motivation from only “belief” is not enough, neither permanent. And facts proved that “rank and yank” has indeed worked well for GE and many other famous companies. Therefore, to develop an effective and humanized performance management system is still a long way off.