Managers will no longer be required to rate workers on a fixed scale of performance rankings, Lisa Brummel, Microsoft’s executive vice president of human resources, said in a memo to the company’s 99,000 staff.

The Employee Ranking system was established by the CEO of the Microsoft, Steve Ballmer, it was to encourage the employees to make better performance when competing with others.

However, the ranking system makes the firm might mandate that only 10% of a supervisor’s employees can rank in a top category and 2% must be in the bottom group. Which means employees may prefer to work themselves but not with their group.

Undoubtedly, that system could help the Microsoft to retain the best talent of their employees who are best able to remain the Microsoft’s competitiveness. However, to the large tech company, the structure is like a ‘horizantal’ triangle. That is to say, the employees take up the majority of the company. The rate system may makes them confused and being afraid lose their job so it seems not a good strategy to rank employees by their performance.

http://business.financialpost.com/2013/11/13/microsoft-axes-bell-curve-for-employee-grading-in-move-to-foster-greater-teamwork-collaboration/