The Seattle company has vowed to make evaluations simpler and more focused on staffers’ achievements, rather than how they look compared to their peers.
Amazon.com is abandoning an annual employee performance-review process that critics view as draconian, a sign that the maturing e-commerce giant might be softening its rougher edges as it battles other tech juggernauts for talent.
The Seattle company has vowed to make evaluations simpler and more focused on staffers’ achievements, rather than how they look compared with their peers.
“We’re launching a new annual review process next year that is radically simplified and focuses on our employees’ strengths, not the absence of weaknesses,” Amazon spokeswoman Teal Pennebaker said.
The changes, first reported by tech news site GeekWire and set to become effective in 2017, make Amazon the latest tech firm to abandon the dreaded stack-ranking system.
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It’s a method that forces managers to grade their teams on a curve that provides outsized rewards to the best performers and ends up encouraging the laggards to leave.
The move comes more than a year after a critical piece in The New York Times highlighted stack-ranking as a factor in what the story characterized as a “bruising” work culture. (The piece was strongly contested by Amazon and employees who said it was not representative of their experience in the company. It also received some criticism from the Times’ public editor for relying too much on anecdote, but Times executive editor Dean Baquet spiritedly defended the story.)
It also comes in the midst of a frenzied market for tech talent in a town where Amazon, which has more than 8,800 jobs open in Seattle, competes not only with crosstown rival Microsoft but with expanding footprints belonging to Facebook, Google and a bevy of startups.
“That’s massive,” Chris Bloomquist, a partner with Viri Technology, a local tech recruiting firm, said of the new policy. “If they’re stating you don’t have to stomp on your neighbor to get ahead, it’s actually a really good thing. They’re taking a critical look at themselves.”
One could also interpret it as a sign of Amazon’s coming of age. The one-time scrappy startup, which developed a reputation for cutthroat moves, is now two decades old and surpassed the $100 billion mark in annual revenue.
It has become a major economic force that is reshaping Seattle and the global retail environment, that lives under intense scrutiny, and that is delving more securely into areas ranging from corporate lobbying in Washington, D.C., to hometown philanthropy.
That evolution has affected its workers’ lives as well. Last November, the company boosted its leave policy for new mothers and offered paid time off for new fathers for the first time. The company is also in a big drive to recruit veterans, and has deployed initiatives to increase its workforce diversity.
Bezos has even intervened to reassure employees in the tumultuous days that have followed the presidential election.
On Friday, several “affinity groups” within Amazon wrote to Bezos expressing concern about members feeling “undeservingly pulled into the spotlight” of racial and gender controversy during the heated campaign. Bezos replied on Sunday saying that diversity is a core Amazon principle. “It’s simply right,” Bezos wrote.
“We firmly reject, and have zero tolerance for, harassment of any kind,” Bezos wrote in an email viewed by The Seattle Times.
The stack-ranking system, also known as “rank and yank,” has been a bane for many employed in the lucrative but high-pressure tech industry.
The system was popularized in the 1980s by the likes of legendary General Electric CEO Jack Welch, who in 2013 penned a defense of it in The Wall Street Journal. “Yes, I realize that some believe the bell-curve aspect of differentiation is ‘cruel,’ ” he wrote. “That always strikes me as odd. We grade children in school, often as young as 9 or 10, and no one calls that cruel. But somehow adults can’t take it? Explain that one to me.”
But the failures of the system became evident at Microsoft, where some current and former employees said the ranking system helped contribute to a caustic culture that focused more on the size of corporate fiefdoms than the success of the company as a whole.
According to a widely read 2012 Vanity Fair story, the system contributed to a decade of relative creative stagnation for what had been the dominant player in tech.
Microsoft got rid of the system in 2013. But the company is still fighting a high-profile class-action lawsuit that alleges that the review protocol discriminated against female engineers. Microsoft disagrees with that conclusion.
In the case of Amazon, the regime has generated some unrest. At a website dubbed “The Former And Current Employees (FACE) of Amazon,” where Amazonians can post anonymous accounts of their complaints with the company, “Performance Reviews” is one of the most popular categories.
One of the postings described how bad reviews “came out of the blue” as a result of stack ranking. “Someone has to get cut and it will be you if you are stuck with a bad manager and are not careful,” the posting said.
Bloomquist, the recruiter, said that phasing out stack ranking could boost Amazon’s competitiveness as an employer as others try to encroach on its talent.
“They’re not the only king anymore. There are a lot of kings in this town,” he said.