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Microsoft facing gender inequality lawsuit due to its previous use of the stack ranking system

A former employee has filed a class action lawsuit against Microsoft alleging that the technology giant's former stack ranking system discriminated against women in technical roles.
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The company previously used a process called stack ranking, in which all employees were graded numerically to determine promotion and compensation – not to mention that a certain percentage at the bottom were fired from the company on an annual basis.

While it abandoned this system in 2013, former employee Katherine Moussouris has filed a class action lawsuit against the company. She claimed that the performance-rating system gave female technical employees lower scores, which resulted in lower earnings and fewer promotions.

Microsoft’s company-wide policies and practices systematically violate female technical employees’ rights and result in the unchecked gender bias that pervades its corporate culture,” the lawsuit claimed.

It was suggested that Moussouris was repeatedly passed over in favour of less qualified male colleagues. She was also allegedly told that while her performance qualified her for promotion, certain managers didn’t like her “manner or style.”

In 2008, she complained that a director in her group was sexually harassing female employees. After having concluded there was harassment, Microsoft reassigned him – but he retained his title. Moussouris suggested that he retaliated by assigning her a low bonus, but when she complained, the company did nothing.

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The lawsuit claimed that she ended up resigning after her role was reduced and her responsibilities were assigned to less qualified male colleagues.

“We’re committed to a diverse workforce, and to a workplace where all employees have the chance to succeed,” a Microsoft spokesman responded. “We’ve previously reviewed the plaintiff’s allegations about her specific experience and did not find anything to substantiate those claims, and we will carefully review this new complaint.”

According to an article by Quartz, the broad allegations fit with the many objections researchers and employees have against stack ranking

It noted: “One of the biggest ways companies motivate people is the threat of losing their jobs. Some do it explicitly through forced ranking and threats of layoffs. Others create insecurity when managers give infrequent feedback or incomplete information.

“But actively encouraging workers to fear for their job doesn’t make them more competitive and productive; it makes them panicked and incautious. Job insecurity hurts health, makes people burn out, and reduces job satisfaction and performance, according to a piece rounding up research at the New York Times.”

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About Author

Shané Schutte

Shané Schutte is the deputy editor of Real Business, with a particular specialism in employment and business law, human resources, information technology and sales/marketing.

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