Microsoft ditches employee ratings to encourage team work

Microsoft has revamped its employee performance review program as the firm aims to move away from a 'cannibalistic' culture and improve its business through collaboration.

Microsoft has been used a "stacking" system to rate performance. Employees in different divisions were ranked and labelled as "top, average or poor" performers. This was seen as hindering the company as individuals competed with each other to progress instead of working together.

Lisa Brummel, executive vice president of HR at Microsoft issued a memo to company employees confirming that such ratings would be ditched.

"The changes we are making are important and necessary as we work to deliver innovation and value to customers through more connected engagement across the company," Brummel noted in a memo obtained by The Verge.

"This is a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact."

Brummel emphasised that going forward team work and collaboration will be the priority at Microsoft.

"We're getting more specific about how we think about successful performance and are focusing on three elements not just the work you do on your own, but also how you leverage input and ideas from others, and what you contribute to others' success and how they add up to greater business impact."

Bonuses will no longer be pre-determined based on an employee's standing, with managers able to allocate rewards to their teams and individuals as they see fit.

The change in employee evaluation is part of the "One Microsoft" initiative that was introduced by out-going CEO Steve Ballmer. The tech giant hopes that this will make the next decade more fruitful after industry watchers dubbed the last 10 years the "lost decade".