The Failed Microsoft Corporate Origins of “Value-Added” Teacher Rankings

Readers of the Vanity Fair piece highlighting Microsoft’s decade of failure to innovate and resulting loss of market share can’t help but notice the close parallels between that company’s decline and their corporate practice of “stack ranking.”

“Stack ranking,” as described in “Microsoft’s Downfall: Inside the Executive E-mails and Cannibalistic Culture That Felled a Software Giant,” is the practice of imposing an artificial hierarchy on a working group and creating winners and losers in the bunch. Emails of key Microsoft executives exhumed from the period 1991 to 2001 show an inflexible and vaguely “data-driven” evaluation system with a veneer of scientistic authority and more than a whiff of technocratic fetishism:

… “stack ranking”—a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

Not only does this echo “value-added” assessments of teachers by using student standardized test scores, as some New York state teachers wary of the new state evaluation system have pointed out, it’s an example of corporate practice of “ed reform” talking points pushed by conservative Hoover Institution education researcher, Eric Hanushek, who believes that eliminating the “bottom 5-10% of all teachers” will save children from “bad teaching.”

Hanushek claims that by eliminating those 5-10% but not replacing them, we will have done schools, and the children they serve, a huge favor:

Replacing the bottom 5-10 percent amounts to replacing two or three teachers in a school that has 30 teachers.  Such a movement would not startle those in most businesses of the country.  Surely it is less than seen in most law or accounting firms or in most hospitals.

Second, it does not say that we need to replace an additional 5-10 percent each year.  If we once got the stock of teachers up to par, we need  only worry about the small percentage of new teachers each year that fall below the acceptable range.  We are talking about trimming out just the new teachers who prove to be ineffective, not additional existing teachers.

This is not a call for replacing all teachers. …It is simply a call for applying standard management practices to schools. [emphasis mine]

To counter Hanushek’s claims, one need only look at the problems his plan creates, rather than solves:

  1. How do we determine who falls in the bottom 5-10%? What criteria? What is “non-performance”? Hanushek said he did not approve of using student test scores to determine teacher “value-add,” but that’s exactly what’s happened and it’s far beyond what the tests were made to do or can responsibly be made to say.
  2. It shows how fundamentally out of touch Hanushek appears to be with how teachers work as collaborators — in departments, teams, as team-teachers, peer coaches, and sometimes peer evaluators. It’s long past time education researchers tried to hoodwink parents by pretending that teaching is a solo endeavor simply because parents connect with their child’s one teacher in the classroom. These researchers know, and a growing number of parents do too, that to a large extent, teacher preparation and professional development, the part parents don’t see, is cooperative and collaborative. In the classroom teachers may be the sole creative force, but outside the classroom where other preparation takes place, teachers work together. As Hanushek would have it, pitting teachers against one another by instituting winners and losers in an artificially “curved” grading system destroys that spirit of collaboration. It’s no surprise Microsoft engineers also hated working under those conditions.
  3. It pushes for teacher reduction without replacement, which fails the corporate logic Hanushek says he ascribes to. Do those law offices or hospitals simply cut the “worst” 5-10% of lawyers or doctors without ever restaffing? Then why would a school only reduce its faculty? It’s difficult to understand how this notion passes muster in any evidence-based world.
  4. Trouble is, in Hanushek’s framework, there’s always a bottom “5-10%.” The goalposts keep moving. If this “floating bottom” of 5-10% of underperformers, according to this fantasy, pushes quality upward with each cohort that’s trimmed, then what’s to stop the erosion of all teachers? If, in eliminating athletes for the Olympic trials, we no longer have the bottom 5-10% of all athletes through successive rounds, but are only left with the gold, silver, and bronze medalists, then what is to stop anyone from eliminating the “lowest 33%” of the medalists and booting the bronze medalist? And finally eliminating the “lowest 50%” of medalists (the silver medal winner) and keeping only the gold medalist? Does everyone understand the madness of that statistical endgame when it’s applied to teachers? See how I’m using statistics to lie and distort, and punish some pretty good athletes/teachers/workers while I’m at it? Enough with the meataxe policies. Cultivating excellent teachers is exactly the opposite of Olympic elimination trials. We want the base of excellence to be larger, not smaller, and that happens when great teachers share with their colleagues how to be better teachers. We don’t even run businesses like winner-take-all Olympic trials either, despite what chubby CEOs might secretly think about their own gold-medal worthiness.

Microsoft failed to capitalize on early market advantage with many things it developed, it relied on monopoly to negate the need for delivery of quality product, today it clings to a software-in-a-box model even as the world has changed to downloadable apps and cloud computing, and even now it struggles to be more than the Chrysler K car of the computing world.

Why would we want to implement any of the rigid ideas that drove Microsoft to moribund mediocrity now, in the totally unrelated realm of school administration?

The hinge to all of this is Bill Gates. Founder of Microsoft, leader of its corporate culture, he is also the chief force behind the Gates Foundation’s activities in reforming public education.

Professor of Education Diane Ravitch has characterized the Gates Foundation’s misguided but well-funded meddling in public education as “puzzling.” Far from being a drop in the bucket of aggregate public education spending, the Foundation is disingenuous about the lengthy shadow it casts among fellow foundations and philanthropists, and on government both state and federal. Of Gates initiatives, Ravitch says:

Sometimes I wonder if anyone at the Gates Foundation has any vision of what good education is, or whether they think that getting higher test scores is the same as getting a good education. I wonder if they ever think about their role in demoralizing and destabilizing the education profession.

When Bill or Melinda Gates is asked whether it is democratic for one foundation, their foundation, to shape a nation’s education policy, they don a mask of false modesty. Who, little old us? They disingenuously reply that the nation spends more than $600 billion on education, which makes their own contribution small by comparison. Puny, by comparison. Anyone with any sense knows that their discretionary spending has had a powerful effect on the policies of the U.S. Department of Education, on the media, on states and on districts. When Bill Gates speaks, the National Governors Association snaps to attention, awed by his wealth. They are pulling the strings, and they prefer to pretend they aren’t.

But their disclaimers do not change the fact that they have power without accountability. They want accountability for teachers, but who holds them accountable?

Indeed, when various moneyed movers and shakers like News Corp’s (and former chancellor of New York City Public Schools) vice president of education technology Joel Klein sniffily refers to locally-elected school boards as “small-bore democracy,” who holds donors and funders accountable to the results of their proposal? What happens when the Gates Foundation summarily drops/de-funds initiatives, as it did with the small schools project, leaving a lot of rubble and school closures in their wake?

My theory is this: the Gates Foundation operates as a non-profit lobby group to open up new markets in the field of education, paving the way for for-profit Microsoft corporation because — as the Vanity Fair piece documents — it can’t compete among its peers in its original field of computer software. Problem is, its failed corporate culture is a foreign, hostile object rightfully rejected by the body of public education, and the Gates Foundation has yet to accept that the transplant didn’t take.

The Gates Foundation is inventing out of whole cloth supposed benefits of online education, funding research, journalism, and policy that shores up its technocratic approach, and has allied with data-driven testing companies all to benefit the bottom line of its corporate cousin, Microsoft. Need I continue to point out the self-interestedness of its research, lobbying, philanthropy, and pseudo-civic activities? This profit-driven self-interestedness in the guise of altruism has been itemized and criticized by a guest poster in EdWeek who described it elegantly as “leveraged philanthropy,” with examples of private-philanthropic gains made by Gates-GlaxoSmithKline in advocating global vaccine programs and Gates-Pearson profits in the field of education:

For example, chemical giant Monsanto has partnered with the Gates Foundation, which reportedly works to suppress local seed exchanges and environmentally sustainable agricultural practices through its global agricultural charity work. Fraud-prone drug giant GlaxoSmithKline is a partner in the Foundation’s work to leverage its own relatively fractional contribution to vaccination efforts, so that it centrally controls enormous world funds for purchase, pricing, and delivery of vaccines for world public health. And in its U.S. education reform charity work, the Gates Foundation has increasingly shifted its funding to promote market domination by its British corporate education services partner, Pearson Education.

Why the encroachment into fields far from Bill Gates’ or Microsoft’s original area of expertise? Microsoft’s products, and presence as a heavyweight player in the world of high-tech, have failed to impress for some time now. Has the company simply given up competing among its peers? And why doesn’t the founder address that than try to compensate elsewhere?

To that I say, man up, Microsoft. Quit trying to take candy from babies, and instead, compete with the other software giants in what it is you supposedly do best. You can still do that, can’t you?


I'm Cynthia Liu, Owner/Founder of K12 News Network. I'm the proud product of public schools through post-grad, the mom of a child in public schools, and the daughter of two teachers. Connect with me professionally on LinkedIn.

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  1. Art Coulson - July 6, 2012, 7:43 am

    Interesting take on Microsoft’s employee ranking system. When I was still at the newspaper, a new publisher came in and the first thing he asled me to do was to stack rank my high-performing, veteran staff and begin to “manage out” any B and C players. It was a destructive and distracting process, and one he repeated across the organization before violating his noncompete and jumping to the competition. Class act, that one.

    I believe really good managers can coax excellent performance from employees all along the spectrum. There will always be workers who are “miscast” in their current roles and those who don’t want to do the job for whatever reason. Stack ranking doesn’t zero in on these exceptions — it tosses out the baby with the bathwater. And it poisons the atmosphere for everyone, even the high performers.

    Having used my daily quota of metaphors and cliches, I will now be quiet. And grab another cup of French roast.

    • admin - July 6, 2012, 8:44 am

      Now we can call “value-added” what it really is, “stack ranking.”

      Agree with you that it creates a poisonous, unproductive atmosphere to work in.

      I have to applaud those administrators at public schools who reject “stack ranking” their faculty and put their energies into assessing teachers by talking to them and observing them at work over a sustained period.

      Teaching is a profession that requires excellent “soft skills” and emotional intelligence, and develops the same in kids. Technocrats who themselves missed out on a liberal arts education might not value those things, but that reflects poorly on the technocrats and not emotional intelligence.

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