Microsoft faces a class action lawsuit from former employee and noted computer security researcher Katie Moussouris. The suit claims that during Moussouris’s seven years at Microsoft, she and other women were unfairly discriminated against on the basis of their gender, passed over for raises and promotions, and ranked below their male counterparts during bi-annual performance reviews.
Moussouris was instrumental in prompting Microsoft to launch its first bug bounty program in 2013, something the company resisted for years. The program pays researchers who find security vulnerabilities in its software. After resigning from Microsoft in May, Moussouris took a job as chief policy officer at HackerOne, which helps companies manage bug bounty programs and communicate with security researchers.
With her complaint, filed Wednesday, Moussouris paints a picture that isn’t altogether unlike other gender discrimination suits recently seen in the tech industry. In the wake of the high-profile trial between Ellen Pao and her former employer, Kleiner Perkins, women brought discrimination suits against Facebook and Twitter, too. But Moussouri shines a harsh light on a dynamic that plagued Microsoft’s culture for years.
In a 2012 expose, Vanity Fair called the culture “a toxic stew of internal antagonism and warfare.” Such stories have poured out of Redmond over the years, detailing life within the walls of Microsoft, particularly during former CEO Steve Ballmer’s tenure, and they’re not pretty. They describe employees backstabbing and sabotaging each other to curry favor with supervisors, who rank members of their teams like prize pigs at the county fair.
The good news is that culture is changing under CEO Satya Nadella. And in many public ways, Microsoft has worked to improve the role of women within the company and across the tech sector. “We’re committed to a diverse workforce, and to a workplace where all employees have the chance to succeed,” a Microsoft spokesperson said in a statement to WIRED. “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.”
As described in Vanity Fair‘s article and elsewhere, the Microsoft culture was for many years ruled by a long-standing employee review system called stack ranking. It required supervisors to assign each employee a number between 1 and 5, with 1 being the best and 5 being the worst. That’s harsh enough, but the real problem is supervisors were required to assign a certain percentage of employees to each number, meaning some employees would have to be ranked a 5 regardless of their performance. These numbers determine how employees are compensated and promoted, so it stands to reason people would do whatever necessary to secure a top ranking.
Microsoft has since retired the system. But it turns up in Moussouris’s suit. “Upon information and belief,” the suit reads, “female technical employees tended to receive lower scores than their male peers, despite having had equal or better performance during the same performance period.”
Moussouri, who appeared in WIRED’s “New Cultural Literary 2016” feature this month, was influential at Microsoft, yet during her time there, the suit states, there were times when she was commended for “outstanding performance” and told she would receive one number, only to receive a lower number once the entire company had been force ranked. This easy manipulation of the numbers is one reason stack ranking was criticized for so many years—it exposes these numbers as arbitrary. “We use numbers a lot in our culture,” says Aubrey Daniels, a psychologist and author of Bringing Out the Best in People. “The problem is these numbers take away from behavior. You have 10 people with a number of 4 out of 5, but that doesn’t mean they’re the same people.”
The Overestimation Problem
The system also made Microsoft particularly susceptible to a lawsuit by creating a lot of hard data about exactly how different demographics of employees were being valued. “You can look at the ranking, and if women are overwhelmingly lower than men, that’s your case right there,” Daniels says.
But psychology researchers say this system does more than make it easier to get sued for discrimination. It creates an environment in which gender discrimination, both conscious and unconscious, is more likely. That’s because, according to Tomas Chamorro-Premuzic, a professor of business psychology at University College London, people have trouble distinguishing between overconfidence and competence. And overconfidence, studies show, is a trait more often associated with men. “In most of the western world we mistake self-perceived abilities for competence,” he says. “Men are more likely to overestimate their abilities and more likely to get away with it.”
In a highly competitive environment of the sort Microsoft created with stack ranking, the effect of this phenomenon can be even stronger. “It aggravates the problem when you make things a zero sum game, so the more some win the more others lose,” he says. “You’ll create political tensions, and men will be more aggressive and competitive, so it’s not surprising they end up winning.”
The stack ranking system came to an end toward the end of Ballmer’s reign. Nadella was widely expected to institute a new, more collaborative, and accepting environment. But the road toward a new Microsoft hasn’t always been smooth.
Speaking before a crowd of women at the annual Grace Hopper Convention, someone asked Nadella how women should approach asking for a raise. His answer, essentially, was they shouldn’t. “It’s not really about asking for the raise, but having faith that the system will actually give you the right raises as you go along,” he said. He went on to say not asking for a raise can be “good karma.”
“It’ll come back because somebody’s going to know that’s the kind of person that I want to trust,” he said. “That’s the kind of person that I want to really give more responsibility to.”
Nadella quickly apologized, saying in an email to employees that he was wrong and learned a valuable lesson from the response. And yet, the initial statement itself smacked of a mentality within Microsoft that “the system”—a system that history tells us is never as objective or fair as we believe it to be—will take care of the people who deserve to be taken care of.
Senior writer Kim Zetter contributed to this report.