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Microsoft Could Learn From Amazon

By: Nathan Weinberg
2006-05-09

Greg Linden, who designed some of Amazon's best stuff and created many of their personalization features, says that...

...Microsoft's complicated performance review and merit pay system does a terrible job of encouraging people to do great work.

Link: Greg Linden

He points to a WashTech article that says the system results in unhappy workers that jump to other, younger technology companies.
Internal Microsoft documents obtained by WashTech News show that Microsoft salaries have been stagnant or nudged only slightly higher over the past two years.

What is causing considerably more ire than pay levels, however, is a performance review ranking system that uses a bell-curve model to decide who gets high scores and who takes the low ones.

According to employees, who said they would be fired if they spoke on the record, the annual review amounts to little more than a closed-door popularity contest in which managers "fight" for higher scores for their team, or defer to higher-level decision makers who mandate how many workers drop to the bottom of the review scale.

One employee in the company's Mobile and Embedded Devices group said when it comes to her review score, "my performance is about 10 percent of the whole equation."
Greg says Microsoft would do better with a more flat salary system with non-monetary rewards for good performance, and he's absolutely right. There are lots of ways Microsoft could leverage its relationships with every technology company on Earth to reward employees, as well as reward employees with intangibles like trips to conferences, that could work out a lot better than more bureaucracy.

Y'know, because bureaucracy is such a great motivator.

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About the Author:
Nathan Weinberg writes the popular InsideGoogle blog, offering the latest news and insights about Google and search engines.

Visit the InsideGoogle blog.




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