Author: Redactor

Microsoft recently announced that it was finally ditching a much-maligned “stack ranking” system.

Last summer, Vanity Fair did much to publicize how demoralizing the system was. The magazine learned that managers had for years been obliged to rank team members on a curve — such that some employees in each team had to be lowest-ranked, even if every team member excelled. Much like getting an F in math for scoring “only” 98 percent on an exam when everybody else manages 99 or 100 percent.

One consequence: Microsoft employees proved reluctant to transfer to crews where their ranking might slip no matter how consistently stellar their performance. “Better,” however galling, to clutch to a top rank on a marginal team than risk a low rank on a powerhouse team. Thus, what counted as “better” in the stack ranking clashed with what was in fact better with respect both to individual achievement and the company’s overall achievement.

Clearly, even the most successful private firms can make pretty big, pretty dumb mistakes. Yet when officers do realize how bad a policy is, they also can often make a 180-degree course change, fast.

How different when it comes to politics-stultified government (or quasi-government) outfits like FDA, USPS, Amtrak, and the growing agglomeration of health-care agencies. Year after year, decade after decade, the same blunders persist, the same red ink spills. In the political realm, political incentives set the terms. And nobody is free to simply discontinue all the glaringly bad incentives.

This is Common Sense. I’m Paul Jacob.