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Summary: Amidst news of serious moral and financial problems at Yahoo, a lawsuit exposes a potential problem with its employee evaluation system.
A former male Yahoo employee is challenging CEO Marissa Mayer’s management, The New York Times reports. Last Monday, former Yahoo editor Gregory Anderson filed a federal lawsuit that alleges Yahoo conducted illegal mass layoffs due to its performance evaluation system.
Marissa Meyer. Photo courtesy of Twitter.
The quarterly performance review was one of Mayer’s flagship initiatives. Every quarter, employees are rated from 1 to 5, and those who have low ratings face the chopping block. Since 2012, the review system has been used to fire hundreds.
Now one fired employee is fighting back. Anderson, who edited content for the website until he was fired in November 2014, is challenging the review system. He says it violates federal and California laws that govern mass layoffs. In his suit, he said he was fired not because of his performance, but because he complained about the performance system.
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Anderson says managers manipulated reviews in order to fire people. He said that he saw 600 employees fired, something he said was equated to an illegal mass layoff. According to The New York Times, California defines a layoff as the termination of 50 or more employees in a span of 30 days. In the state, employers are required to give employees 60 days notice. A federal law called the Worker Adjustment and Retraining Notification Act requires advance notice when there is a layoff of 500 employees or more.
Anderson says employees were not given advance notice, and after his termination in 2014, Yahoo fired 1,100 employees because of poor performance reviews. He alleges that the system, called Q.P.R., was unfair. For instance, some managers had to give low scores to employees, regardless of performance, because they had to make a quota. Ratings could also be changed by higher-ups who may not have any direct relationship with the employee. Additionally, employees were not told their rating or given a means to appeal.
The reviews idea was introduced by consulting service, McKinsey & Company; and similar systems have been adopted by corporations such as Amazon. However, critics of employee evaluations say that they negatively affect morale and productivity. Microsoft, for instance, does not do employee evaluations.
If Anderson wins his lawsuit, Yahoo would be required to pay each employee $500 a day plus their day rate and benefits for each day of advance notice that they did not receive.
In a statement, Yahoo defended its review system, essentially saying it lets the company know who to give more opportunities to and who to transition out. It also said that Anderson’s claim has no merit and that he had tried previously tried to settle with them for $5 million before he filed his lawsuit.
In addition to the layoff allegation, Anderson says he was discriminated against for being a man.
The lawsuit comes at a low point for Yahoo when more than one third of its employees have voluntarily and involuntarily left over the past year. In addition to morale problems, the company has also been on a financial decline. Today at a press conference, Mayer announced a plan to cut Yahoo’s workforce by 15%, and Mashable predicts that after years of trying to save the brand, she may finally sell it.
Source: The New York Times
