The pay disparity is exacerbated by Microsoft’s rating system. The company uses a bell curve to rate employees in each group, so the number of top performers is balanced by the same number of underachievers. But Microsoft has a long history of hiring top-notch computer science grads and high-quality talent from the industry. Under the rating system, if a group works hard together to release a product, someone in the group has to get a low score for every high score a manager dishes out. “It creates competition in the ranks, when people really want community,” says a former Microsoft vice-president. A company spokesman says managers don’t have to apply the curve with smaller groups, where it’s not statistically relevant.
–Business Week “Troubling Exits At Microsoft”