[Jasper_]

A lot of companies boot you out if you don't get a promo. The idea is that you take the "worst" 10% of your workforce (where "worst" means not getting promos), and fire them, every year. Even if you have no desire in chasing the promo train for more money, you sort of need to play along, just to have a job in a year or two.

[ido]

I believe what you are describing is called stack ranking and has fallen out of favor with tech companies. Microsoft at least used to do that (I think they don’t anymore).

[toast0]

It was kind of a mix of stack ranking, fire X% on a periodic schedule, and up or out, you've got X years to get promoted or you'll be fired. Microsoft says they stopped stack ranking, but it's not clear if they did. Facebook says they don't force a ratings curve, but they did while I was there. Just because something has fallen out of favor and companies acknowledge that it's fallen out favor doesn't mean they don't do it.

[doktorhladnjak]

I worked at Microsoft when stack ranking was “eliminated”. Groups still stack ranked (at least mine did) but they had more local control over the process and distribution rather than having to follow one company wide system. Old habits die hard.

Maybe it’s different now, but I doubt it. Any place that pays for performance has to differentiate rewards in some way.

[bombcar]

It’s pretty useful if you’re an up and coming growth company paying higher than average comp as it ensures you’re continually snatching new employees from other companies.

[spiffytech]

The consensus I've seen is that it's useful for a year or two while you clear out the people who really need to go, but after that it creates perverse incentives and constant fear among employees, doing more harm than good.

[ido]

A better solution is to "just" be more thoughtful & honest about who (if any) needs to be fired (it sucks to fire people so a lot of managers put it off but really shouldn't, sometimes). I don't think there's a systematic/technocratic solution to a human/social problem like that, at least not one that doesn't have other massive downsides (like stack ranking).

Your hiring process should be good enough that firing is rare but nobody is perfect and if/when the situation arises (either due to a bad hiring decision or the situation changing) it's better to resolve it earlier rather than later.

[bombcar]

Many companies should offer a quit/buyout alongside the performance plan - most employees who are on the fired path know they’re on it and pretending they’re not doesn’t help anyone really.

[Brian_K_White]

I read that as it's useful for the startup that the established companies do it, not that it's useful for the startup to do it.

[civilized]

Now they have stack ranking and lie about it, which is even worse.

[21723]

I feel like we should stack rank corporate executives. Hold a public vote to rank them and the most despised 10% get the 'tine.