Yahoo Ex-Employee Files Lawsuit
February 01 2016 - 8:00PM
Dow Jones News
A former Yahoo Inc. employee filed a lawsuit Monday saying that
the Internet company used performance reviews to terminate workers
without proper warning.
In the complaint, filed with U.S. District Court in San Jose,
Calif., Gregory Anderson, a onetime editorial director who worked
on Yahoo auto and travel content, said the company's employee
rating system—which he alleges required that a certain percentage
of staff be designated as low performers—was swayed by political
manipulations, prompted competition so fierce it sparked a bribery
attempt and violated employment laws.
"The [quarterly performance reviews] process was opaque and the
employees did not know who was making the final decisions, what
numbers were being assigned by whom along the way, or why those
numbers were being changed," the filing said.
News of the suit was reported earlier in the New York Times.
Yahoo said its review process is rooted in fairness. "Our
performance review process also allows for high performers to
engage in increasingly larger opportunities at our company, as well
as for low performers to be transitioned out," said a company
spokeswoman.
Mr. Anderson was terminated in November 2014 while on leave and
attending a journalism fellowship at the University of Michigan. He
said he had earned "a promotion, raise and compliments" at Yahoo
but was told at the time of the firing that he ranked among the
lowest 5% of employees and that his dismissal was a result of the
quarterly review process, according to the lawsuit.
The performance management approach, introduced by Yahoo Chief
Executive Officer Marissa Mayer in August 2012, was similar to the
controversial "forced ranking" or "stack ranking" systems
previously used by General Electric Co., according to the
lawsuit.
Microsoft Corp. and other big companies have moved away from
stack-ranking systems in recent years, favoring more frequent
feedback that doesn't rate workers with a number.
Yahoo employees received ratings from 0 to 5, numbers that
paired with buckets ranging from "greatly exceeds" to "misses"
expectations, according to the lawsuit. Managers had to assign a
certain percentage of workers to each bucket, Mr. Anderson alleged.
In so-called calibration sessions, higher-level managers were able
to adjust the ratings of employees they didn't personally know up
or down, he added in the suit.
Mr. Anderson alleged that the process let in managers' "personal
biases and stereotyping" and encouraged gender discrimination. He
also said that the company didn't comply with state and federal
rules that require companies to give advance notice before big
layoffs.
He said he suffered from "severe emotional distress" after the
firing and is entitled to lost wages, benefits, bonuses and stock
rights.
Write to Rachel Feintzeig at rachel.feintzeig@wsj.com
(END) Dow Jones Newswires
February 01, 2016 19:45 ET (00:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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