Kara Swisher

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“Because Marissa Said So” — Yahoos Bristle at Mayer’s QPR Ranking System and “Silent Layoffs”

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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.

A key point: The fact that some staffers are being let go is not the core issue — many inside agree that the Silicon Valley Internet giant has long needed to prune its employees and upgrade its talent base. Mayer has been aggressively doing that, even adding to overall employee numbers at Yahoo, largely via an incessant series of acquisitions.

Instead, 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, said multiple sources, as I reported last week.

Mayer denied that the rankings were forced at a staff meeting this week, noting that they were more guidelines or the process was not being deployed correctly.

But some employees disagree that is the case in the anonymous postings. In fact, dozens of perturbed Yahoos are sending me emails complaining that managers perceive it as required, in missives that are similar in tone to when Mayer suspended work-from-home privileges for Yahoos last year. Most point the finger for the bad rollout of the system at HR head Jackie Reses, who penned the awkward and poorly communicated internal explanation of that controversial plan to bring employees to the office.

At issue now is the QPR process within Yahoo that Mayer introduced last year and that Reses manages. On an internal message board for anonymous feedback, the posts voted up in recent days all center on QPR, and there have been many more since then. In recent days, in fact, the top five questions are all about QPR — each with more than a thousand votes.

Among the examples — some of which are included in screen shots below — that have been sent to me:

I was forced to give an employee an occasionally misses, was very uncomfortable with it. Now, I have to have a discussion about it when I have my QPR meetings. I feel so uncomfortable because in order to meet the bell curve, I have to tell the employee that they missed when I truly don’t believe it to be the case. I understand we want to weed out mishires/people not meeting their goals, but this practice is concerning. I don’t want to lose the person mentally. How do we justify?

More often than I’d like I’m told we are executing a certain way ‘because Marissa said so.’ This explanation leaves out valuable context. There was probably a good reason for the decision, but that’s absent from this pat answer. Can we ban the practice of ‘because [executive] said so’ and encourage people to explain why a specific choice was made when relaying those decisions to others?

At no point was it messaged to people managers or employees that low ratings would impact job status. Employees are unaware that they are being rated on a bell curve/stacked ranked model. Why didn’t any of this happen here at Yahoo, a place that keeps stressing the importance of transparency? Will we continue to lose staff each quarter like we did last week? And is the rating system being reviewed to occur only twice a year instead of every quarter?

Another asked Mayer to stack rank her own top leadership and fire one or two of them to show she is treating everyone equally:

Will the ‘occasionally misses’ classification apply to L2 and L3 execs also? At every goals meeting, we find senior staff who missed even the 70% goals. Thus, by definition, they should be classified as ‘occasionally misses.’ Two such classifications, and that person should be let go, amiright? How about we set an example for the rest of the company and can a few of the top execs who miss (or who sandbag their goals to make sure they ‘meet’)?

Yourright, but this has apparently not taken place.

To be fair, many inside the company are very pleased with Mayer’s series of moves to improve morale and that her high profile in tech has resulted in a shiny reflected glow for Yahoo. Most especially, that happiness is because of a drastically higher stock price since she arrived — although that is due in large part to the company’s ownership stake in China’s Alibaba, which has had stellar performance of late.

But, for certain, a large group of Yahoos do not like QPR.

The HR tool was rolled out a little over a year ago, only a few months into Mayer’s tenure, when she sent out an internal “goals” memo to employees that outlined a new system of evaluating the efficacy of its staff.

It read, in part:

Moving forward, we will have both annual goals and quarterly goals that we will all commit to, track, and grade ourselves based on … We will then cascade the goals down through the company at the department, team, and individual level.

Under Mayer’s plan, new measurements of performance were instituted, from a variety of benchmarks and evaluations, in order to better understand who the best and worst employees at Yahoo were. At the time, she noted that employees would be judged on four “Cs” — culture, company goals, calibration and compensation.

What she has been mimicking is similar to an employee-evaluation method used at Google — where Mayer spent her entire career before becoming Yahoo’s latest leader — using an elaborate series of data points to judge how individual employees are doing.

It’s not exactly the old bell curve, but that is one of the many elements used to determine how well (or not) an employee is doing compared to a peer group.

Mayer herself has been very involved in the new process, according to numerous sources with knowledge of the situation, sometimes even calibrating the final rating details for employees, the recommended raise, bonus and equity awards and a short summary of accomplishments.

Still, QPR has proved unpopular for a number of key reasons. The main worries: Forced ranking of lower scores and that Mayer and other top execs perhaps cannot tease out what many describe as internal “political bias and favoritism” that can appear in the rankings.

Mayer, in fact, tried to address the issue yesterday morning in a Q&A, which she began by quoting her favorite children’s book about the value of experience. After that, she spent more than half an hour explaining Yahoo’s QPR system, discounting several of the most voted-for anonymous comments. Most especially she noted that the system was not forced ranking or a “strict bell curve,” as some clearly consider it.

Mayer highlighted that a part of the quarterly process called the “bucket” ranking allows for a divergence of plus or minus one to three percentage points. According to sources, this still apparently requires mandatory calibration, using the rankings: Greatly Exceeds (10 percent) Exceeds (25 percent), Achieves (the largest pool at 50 percent), Occasionally Misses (10 percent) and Misses (five percent).

In a new version for the fourth quarter, sources said, those percentages are changing to give employees more of a break, but only at the discretion of leadership within the units: Greatly Exceeds (10 percent), Exceeds (35 percent), Achieves (50 percent), Occasionally Misses (five percent) and Misses (zero percent).

Mayer defended the system in her discussion with employees, who are clearly scared of QPR due to the recent firings.

“It’s not a silent layoff,” she said, according to several employees, noting that the company has actually grown since she arrived. She also insisted that no rankings were forced.

But several posts disputed that, such as this one that came in from an employee while Mayer was still talking:

It is 100% true that managers are told they need to put someone in occasionally misses to meet the distribution. It is not a cop out, as you mention. We are told, very clearly, that we have to rank someone low. So, forced ranking is in place, regardless of what Marissa thinks is happening. Maybe it’s not supposed to happen — but Marissa needs to make this very clear to upper management before they have us force rank next time.

I asked Yahoo PR for comment and will update when I hear from them. (More honestly, if I hear from them.)

Here are some of the screenshots related to QPR:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work