Phonetic name matching and nickname matching is a new feature addition to SharePoint 2010 People Search. As per TechNet, users can search for a person in the organization by name without knowing the exact spelling of the name. For example, the search query “John Steal” could yield “John Steele” in the search results; results for the search query “Jeff” include names that contain “Geoff.” In addition, nickname matching makes it possible for a search query for “Bill” to yield results that include “William.”
It works as advertised, but seriously messes up results ranking. For example, if you search for Anjaya: people with names like Sanjaya, Ranjana and all other variations show up on the first page of results while the persons with name Anjaya are buried in 2nd, 3rd, or 4th pages of results.