Abstract

This case discusses the Quarterly Performance Review (QPR) which was introduced at Yahoo! Inc. by CEO Marissa Mayer shortly after she joined the company in 2012. As part of QPR, managers scored their employees and distributed them into ‘greatly exceeds,’ ‘exceeds,’ ‘achieves,’ ‘occasionally misses,’ and ‘misses’ categories, with a target percentage of employees to be distributed into each category. The lower ranked employees were fired while the higher ranked ones were rewarded. This HR policy was widely criticized in the media for being similar to stack ranking. Yahoo also faced a lawsuit from a former Yahoo editor, Gregory Anderson, who accused the company of executing QPR in an arbitrary way to lay off employees on a huge scale. He further alleged that even if all the employees on a team were performing well or at the same level, managers were required to place some of them in the ‘occasionally misses’ and ‘misses’ buckets to meet their targets. While Yahoo stood by its QPR, critics felt that stack ranking was not a very effective performance appraisal policy and Mayer should look for a more effective one to revive the fortunes of Yahoo.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze the QPR policy implemented by Yahoo and understand the reasons that led to its implementation.
• Understand the forced ranking system and discuss and debate its pros and cons.
• Explore how Yahoo can improve its performance appraisal policy, in tune with its employees’ expectations and business need.

Keywords

Performance management, Performance appraisal, Performance review, Quarterly performance review, Forced ranking, Stack ranking, Motivation, Job satisfaction, Downsizing, High-performance workplaces, Innovation, Productivity, Employee morale