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Marissa Mayer’s Vision for Innovation Appears to Be Elimination

Among many storylines during Mayer’s first year of running Yahoo, two have captured the attention of HR leaders: eliminate remote workers and deploy forced ranking in performance management.

November 21, 2013
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Related Topics: Work/Life Balance, Performance Appraisals, The Latest, Talent Management, Workplace Culture
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Any way you slice it, it’s been a hell of a first year for Yahoo Inc. CEO Marissa Mayer.

Among many storylines during Mayer’s first year of running the Silicon Valley-based tech giant, two have captured the attention of human resources leaders everywhere. They center on Mayer’s decisions to eliminate remote workers and to deploy forced ranking in performance management.

Let’s take them in order and also view them through a primary goal of the Yahoo CEO: to make the company more innovative.

Marissa MayerThe Internet blew up in February when Mayer announced that anyone who works remotely for Yahoo would have to relocate to a physical, brick-and-mortar Yahoo office. In addition to just generally trying to get control over what was happening in the organization, Mayer used the announcement to pitch the need for Yahoo employees to be together to enhance brainstorming and innovation. Here’s a taste from her memo to all Yahoo employees announcing the change:

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo, and that starts with physically being together.”

Collaboration. Communication. The value of hallway conversations. When it comes to being able to innovate, it’s hard to argue with that. Still, many people were critical of the decision to bring all remote workers back into the office. Who’s more productive: remote or in-office workers? You could argue that remote workers are more productive, but it’s pretty hard to deny the benefits of having all employees present so the collaboration and innovation that naturally happens could occur on a more frequent basis.

Mayer seemed to be a leader related to the value of driving innovation based on this decision.  

But then a funny thing happened on the way to all those great ideas. Mayer recently announced that an upcoming set of layoffs would be based on the results of a year’s worth of ratings completed on a quarterly basis, where Yahoo managers were forced to use stacked ranking to evaluate their teams and force a certain percentage to the lowest rating: 

“According to a multitude of top-ranking posts on an anonymous internal message board used by Yahoo to vent their frustrations to top staff, employees there are becoming increasingly upset by an evaluation system instituted by CEO Marissa Mayer that has apparently resulted in the firings of more than 600 people in recent weeks. 

Some inside the company are incensed that the Quarterly Performance Review system forces managers to rank some of their staff with designations of ‘Occasionally Misses’ and ‘Misses,’ even if it is not the case, via what is essentially a modified bell curve. Those fired recently had gotten lower scores at least two times in recent quarters.”

For anyone compelled to protect Mayer’s motives and call her a leader in driving innovation, the decision to use stacked ranking made them look away. Why? Stacked ranking forces some poisonous results related to the ability to innovate.

Need examples of the poison that stacked ranking causes? I’ll list a few from my experience:

1.     In stacked ranking, “A” Players don't want to work with other A players on the same team. Why would they? Their rating and compensation is based on them being an A player. Better to work with average people.

2.     Teammates will try (subconsciously or not) to undermine the hiring of great talent if a stacked ranking system is in place. It’s a threat based on No. 1 above. “I'm not sure about hiring Rick (A-player recruit), he seemed negative about his last manager. ... ” It happens every day in corporate America.

3.     Employees don’t want to work for managers who push them if stacked ranking is part of the program.Pushing me means holding me accountable to get better over time. That also means lower ratings on average until I get there. Why would I want that? Give me the soft, easy manager and let me get all the good stuff now.

Mayer looked innovative when she made the decision to bring all remote workers back to the Yahoo campus. Her decision to fire people based on the results of a year’s worth of stacked ranking will actually reduce innovation, not grow it.

Kris Dunn, the chief human resources officer at Kinetix, is a Workforce contributor. He is also the founder of “The HR Capitalist” and “Fistful of Talent” blogs. Comment below or email editors@workforce.com. Follow Dunn on Twitter at @kris_dunn.

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