I have been talking to lot of new Engineers across different companies and people are confused with the two terms "Stack Ranking" and "Force Attrition Goal (URA at Amazon)".
Stack ranking is done almost everywhere for budget allocation. Because the money is limited, they distribute it using a Normal curve. The people at the bottom of the curve will not get financial benefit.
Normally, you want to give a hard message to people that are bottom of the curve is that it is not the place you want to stay on longer time and you need to push to go up the curve. Most other companies do that by giving 0 performance bonus.
Amazon on the other hand does not have performance bonus (for top or low performer). So low-performers will continue to get same as a top person in the team. Some genius, rather than fixing the incentive problem, came up with a different idea to punish people.
The idea is that bottom of the curve at Amazon need to be punished (almost harassed) so that their life becomes miserable and they will either leave the company or they will be forced to move out. Amazon is like an abusive parent, who does not know how to deal with kids when they are not in the good behavior.
Also to enforce that every Amazon Manager follows this abusive behavior, Amazon has put a Goal that 5% of the total Employee need to leave under the Unregretted Attrition. If the regular attrition is 20%, than 1 out of 4 person leaving Amazon has to go through this harassment. This is a top down mandate and enforced heavily.
So stack ranking is not the devil as long as it is used only for financial purpose. But the devil is how you treat the people at the bottom of the curve.
- L7 at Amazon, 600K TC.
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comments
Stack rank doesn’t work at Amazon because too many incompetent employees/false positive hires on PIP track getting to coast and interview while being paid the same as top producers.
Give TT refreshers equal to FB and I will lick the boots of my manager and help him write PIP docs!
Why would your expectations of me be based on the performance of my peers? When you assign me a project, the goal is not to “complete this project better than Team X is completing theirs”. It’s to efficiently meet requirements and maximize the value of the project.
Why would you design a performance rating system that can’t handle a majority of your employees exceeding expectations? Answer: because they don’t know what they expect. They’d rather have employees compete against one another than put in the work to understand the projects they are managing.
In practice, pitting your employees against other probably does get shit done. Amazon has apparently built an empire on it. But surely there’s a better way.
Previously worked at Amazon and agree with this poster. Any ranking system will have winners and losers; the real problems are:
- Whether or not you regularly recalibrate your ranking criteria to ensure the winners are you actual top performers/losers are your actual bottom performers
- What you do with the winners and losers
Ideally, you give great rewards (financial incentives, promotions, correct job scoping) to the ones who did the best, so that there is no scenario where they would prefer to leave the company.
And you should give support and learning opportunities to the losers of the system, and use their feedback to find out where you have a process or culture problem in the company.
Instead, Amazon optimizes for punishing the losers of the system, and only takes feedback on systematic problems from the winners. Naturally, this solves absolutely nothing. And since the even winners get little to no incentive to stay, they leave.