Larry Cipolla
August 29, 2013

Microsoft is not the only business to implement "stack rankings," but it continues to make headlines for the practice as CEO Steve Ballmer makes his exit from the company.

The stack ranking system rates employees against one another on a scale of 2.5 to 4. Receiving a 4 means the employee is "Above Average." Employees who are ranked higher will get bonuses, promotions and other incentives.

Former Microsoft employee David Auerbach wrote a contribution piece for Slate about his experience in the stack ranking system. According to Auerbach, stack ranking was harmful. Employees were encouraged to join low-quality groups, because there was a better chance that they could stand out among their peers.

"Better to join a weak group where you'd be the star, and then coast," Auerbach wrote. "Maybe the executives thought this would help strong people lift up weak teams. It never worked that way. More often, it just encouraged people to backstab their co-workers, since their loss entailed your profit."

Additionally, the system was a "zero-sum game" that permeated through every level of the organization. Personally, Auerbach said that it made him secretive, cynical and paranoid—three qualities that no company wants in its employees.

With 360 feedback through CCi Surveys International, businesses can develop much healthier environments for all staff members. These assessments are well-rounded and compare employees against themselves. Managers work with contributors to ensure that an action plan is created that caters to the individual employee's needs.

An approach that works for one team member might not be beneficial for another. And there's nothing wrong with that. The idea behind 360 feedback is that positive behavior change should be based on the employee being rated. There is group feedback, but it is not designed to encourage backstabbing or feelings of ill-contempt. Rather, individual growth can benefit the employee in question as well as his or her company.