Is Marissa Mayer’s Year-Old Employee Review System at Yahoo Finally Taking Aim at Underperformers?


A little over a year ago, only a few months into her tenure, Yahoo CEO Marissa Mayer 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.”

Now, said several sources, those results are coming into focus, and it might result in firings of Yahoos, perhaps impacting more than 500 employees. One source noted that the vulnerable were those who were rated “misses” or “occasionally misses” at least two times in the last five quarters of reviews.

I have gotten reports from Yahoos scattered in offices all over the world that some employees have already been let go – with severance packages – based on these weak reviews.

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 employees at Yahoo were.

And, of course, who the worst were, too.

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.

It was a different way of culling underperformers for Yahoo, which had used a variety of HR methods over the years. There is a stack-ranking in this mix, a sometimes controversial HR technique, but it is more complex than that.

In fact, too many of the firings pre-Mayer were the result of bruising rounds of company-wide layoffs that seemed less organized, and also served to destroy morale. In contrast, under this more rigid system, poor-performing staffers getting the ax perhaps feels less random to the whole group.

This kind of data-based solution is right in Mayer’s data-chomping wheelhouse. She talked about this more elaborate performance-based system in a company meeting a year ago. At the time, she noted that employees would be judged on four “Cs” – culture, company goals, calibration and compensation.

Add a new one: Ciao.

Yahoo PR did not return calls for comment.

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