Stack-ranking crippled the ability to innovate at Microsoft, as employees were left despondent and disengaged.
It was clear that the company was in need of a new system. A system that encouraged innovation and professional growth. Before Steve Ballmer stood down as CEO, he implemented company-wide changes. His main objective: break down the barriers to communication.
As the first step, Head of HR Lisa Brummel sent an email announcing that Microsoft would be changing their performance review program. In other words, Microsoft was ditching the ‘rank-and-yank’ system employees detested.
Fundamentally, the new approach would focus on teamwork, collaboration and employee growth. Managers would now have the flexibility to allocate rewards in a manner that would best reflect the performance of their teams and individuals.
Performance reviews wouldn’t just be focused on how well the employees performed, but also on how they engaged with their peers. Employees now needed to demonstrate how they went about leveraging input and ideas from their teammates, and how their contributions impact the success of others.
Furthermore, Microsoft would implement a system that would focus on employee’s skills and competencies. Through a process called “Connects”, employees would receive real time feedback, that would help them learn, grow and focus on their strengths and key learning areas. This flexibility allowed managers to discuss performance and development throughout the year.
With Connects, Microsoft made the commitment to assist employees with their professional careers. Today, employees are offered a full range of career resources to help them achieve their personal goals. Now employees have the option to either go deep into their field of expertise, or move across other business functions to experience other business opportunities.
How Impraise fits in
Creating an employee growth is important to a company's culture. Implementing a system that assists all aspects of the performance management cycle is vital to understanding the health of the organisation. Impraise helps companies move from the annual performance review to continuous feedback.
Managers can regularly check in with their team members to understand how they are advancing and what might be hindering their progress. Creating transparency nurtures a deeper sense of trust between employer and employee. Yet, information on the company’s activities alone is not enough. As employees are essential to the ongoing activities of the organisation, it's imperative they are allowed to have a say on the direction the company is going in. What’s more, gathering feedback from employees regularly, gives managers the ability to track progress per team and per employee. This rich data, allows organisations to understand where their key strengths and growth areas lie, and how they could go about improving business practices in real time.
Unfortunately, without realising it, Microsoft created an atmosphere that was described as cultural cannibalism. Not having the ability to nurture employee growth and ultimately product innovation, Microsoft quickly fell behind other competitors. Revamping their performance management process enabled them to tackle this culture of competition head on and create the right environment for innovation to begin flourishing again.
Download our latest Guide to People Enablement Programs below, to better understand the main priorities to take into consideration, and how you can build a program best suited to your organisation.