Helpful Job Resource Blog

Another news cycle, another questionable employer brand practice at Yahoo!. This time, a former employee has filed a lawsuit that takes to task Chief Executive Marissa Mayer’s employee ranking system that ultimately led to his firing.

The ousted staffer, Gregory Anderson, was an editor for a few of Yahoo’s websites, and his claim is that management used the ranking system to fire hundreds of people, when really, it was just an excuse to trip the company’s budget. The lawsuit says that managers were told to give bad rankings to a certain percentage of their team – making their actual performance was irrelevant.

As reported in the New York Times, Anderson says Yahoo essentially committed illegal mass layoffs, since California law would require 60 days notice if more than 50 employees were being let go within one month; 600 lost their jobs on the spot.

Anderson is hoping that the court will force Yahoo to pay each fired worker $500 per day plus benefits for each day of advanced notice it did not provide. Add to that Yahoo’s morale problem – more than one-third of the staff turned over last year – and it seems Mayer and Co. have an employer brand crisis to deal with.

Whether or not the case has merit remains to be seen. However, all of the negativity has certainly given Yahoo a bad reputation. Here’s are just a few practices Yahoo is accused of that you need to strike from your talent management playbook right now:

The ranking system – Instead of assigning an arbitrary number to an employee, performance reviews should be ongoing conversations about how to improve and grow. Done the Yahoo way, it fosters a culture of fear and mistrust, rather than one of motivation and pride.

The secrecy – If the lawsuit is to be believed, there seems to be a cloud of confusion at Yahoo! regarding mystery people changing employee evaluations, and what’s really behind firing decisions. Although layoffs do sometimes come out the blue, it’s better to aim for a company culture that is transparent, so workers don’t feel they are walking on eggshells.

The culture of competition – While rewarding high performers is fantastic, if the suit is to be believed, it comes at the expense of punishing under performers. That sets up a dynamic in which employees might feel like they are competing with each other to survive, rather than working together.

It’s up to Yahoo! to now disprove the claims made in the lawsuit, but perhaps even more important, they have some employer brand damage control to do – again.