Top CIOs know IT employees don't need morale killers like stack ranking

In Searchlight: Stack ranking? Yahoo could learn from CIOs about valuing employees. Plus: IBM will share Watson, Facebook's $3 billion bid and more.

Remember that old workplace joke: "The beatings will continue until morale improves"? One wonders if they find it so amusing at Yahoo. On the heels of having telecommuting yanked away in February, Yahoo employees are now working under the dark shadow of stack ranking.

For those not familiar with the practice, as Forbes contributor Peter Cohan explains in this week's lead Searchlight item, stack ranking is an employee review process that forces managers to rank workers and chop those on the bottom. Rather than incentivize great work, Cohan argues, it encourages a surplus of sucking up to management.

CEO Marissa Mayer nixed the work-from-home incentive so that Yahoo would have a more hands-on collaborative environment. With stack ranking now in place, the argument could be made that she was doing employees a favor. It probably is easier to grease palms and watch your back in person.

But wait, doesn't Microsoft use stack ranking for employee evaluation? They did. And it worked so well for them, it was abruptly dumped just this week. Because -- brace yourselves -- the company decided to focus more on things like teamwork, employee growth and development. In a company memo, head of Microsoft HR Lisa Brummel said there will be "no more curve," and managers will have more decision-making power. Oh, the irony.

Maybe Mayer (and up until Wednesday, Steve Ballmer) could learn a thing or two from today's CIOs. I'm sure they'd like to think it's the other way around -- that their big names make them the trendsetters. Not this time. Being called on to stay lean and agile and innovative all at the same time, successful CIOs have learned the hard way that they need to tune in to their employees. With IT skills in short supply, they need to know the skills they need, who has them and who has the capacity to learn them. They've learned to work closely with their directors and managers. They encourage peer-to-peer knowledge-sharing -- aka collaboration. They also know that the arbitrary severing of employees can do real damage, not just to employee morale, but the organization as a whole.

Check out SearchCIO's own coverage of these topics

This week, at the annual conference of the Society for Information Management in Boston, some of the country's most successful CIOs made clear the advantages of being more hands-on than offering brownie points for brown-nosers. At Hewlett-Packard, one of CIO Steve Bandrowczak's proudest accomplishments is instituting a reverse mentoring program. In it, new employees share their knowledge and thoughts with the veterans. "It's been phenomenal," Bandrowczak said.

Union Pacific Railroad CIO Lynden Tennison said that even during the toughest budget cycles, he's investing in training because, simply put, "you drive efficiency and productivity when you have the best qualified people."

For Donald Imholz, CIO of Centene Corp., the accountability falls directly on him and his leadership team. Every three to six months, they critically assess themselves on whether they're spending their time in the right areas. They look at the data -- did production performance slip or no? If so, was it a process issue, a people issue or something else? In any case, a fix is instituted, usually accompanied by training. "We celebrate when we overrun our training budgets," he said. "For me, there is no saturation point in training."

Good help is hard to find, so when it comes along, you nurture it. It's called leadership.

Let us know what you think about the story; email Karen Goulart, senior features writer.

This was last published in November 2013

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What's your method for evaluating employee performance?
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management by objectives. I have always liked the quarterly exercise to have everybody line their tasks up with the strategic vision of the company. One problem you need to pay attention to: sandbagging and over-zealousness.
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I think it starts with knowing what you expect communicating it effectively.  it also means knowing what is reasonable to expect, and what is just being difficult for the sake of keeping people from a little salary bump.
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With all the recent news about Yahoo, and supposedly cutting a lot of its QA staff, one has to wonder if Stack Racking still plays a part in that. But given Yahoo seems more interested in being a Holding company, I'm not sure what that says anymore.
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