Stack ranking is controversial. It destroyed Microsoft from the inside out, yet it helps make Valve the incredible company it is. Put simply, stack ranking is the practice of rating employees directly against one another, rather than against their job descriptions or some other standard. You're ranking your employees... stacking them on top of one another based on whatever criteria you find helpful. At Microsoft, it looks like stack ranking was the supervisor's responsibility, which over time led to a culture of intense competition between employees that destroyed moral and the team environment. At Valve, stack ranking is performed by your peers (as is almost everything), so it appears to contribute to the sense of ownership that each person has with each other. That's a very cursory analysis and it's likely flawed... but it's helpful to examine as a means of gaining team insight. Stack ranking, as with any other form of management and evaluation, is only going to cause damage or success in direct relation to how to use the results.

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