Comm101

Yahoo recently sacked around 600 employees after concluding from their performance evaluation methods that the sacked employees were under performers who were bringing the company down. Yahoo’s metric was a bell curve which measures productivity of employees as assessed by the management. A lower standard deviation is representative of a homogenized organization of equally productive workers. Companies seek to do this by firing the employees on the lower end of the graph. However, research has shown that this isn’t always a correct approach as it brings down morale of the other workers. It works as a disincentive to employees who are currently highly productive; because as more and more workers depart; employees who previously used to be termed high-performers are now relative to the other employees(other high-performers) are simply average. By categorizing those who would otherwise be overachievers as average, employers are alienating their best workers. Such high pressure has historically been correlated with low employee satisfaction, and it isn’t an ideal situation for Yahoo, especially when a fellow software giant, Microsoft, has just recently completely abolished this system in place of one that rewards high performance and team work.

http://www.infoq.com/news/2013/11/stack-ranking-microsoft-yahoo