Microsoft has unveiled a series of stringent performance management policies aimed at addressing underperformance across its workforce.
Chief People Officer Amy Coleman detailed new tools and guidelines in an internal email to managers.
These measures aim to accelerate high performance and address low performance promptly.
These measures align with a broader trend currently shaping the tech industry.
Companies are increasingly prioritizing efficiency and accountability over expansive perks and rapid hiring practices.
Key Changes in Performance Management at Microsoft
The new policies include a globally consistent Performance Improvement Plan (PIP), which provides struggling employees with a structured timeline to improve their performance.
Employees who fail to meet expectations under the PIP can opt for a voluntary separation agreement called the Global Voluntary Separation Agreement (GVSA).
This exit plan offers a separation package, allowing employees to leave the company on mutually agreed terms.
Employees rated in the lowest performance bracket, with reward outcomes between 0% and 60%, will encounter restrictions.
These restrictions will apply specifically to their ability to make internal transfers.
If they leave the company under these conditions, they will be barred from rehire for two years.
These measures aim to create transparency and consistency in performance evaluations while fostering a culture of accountability and growth.
To support managers in implementing these policies, Microsoft is introducing AI-based training tools.
These tools simulate real-life feedback scenarios, enabling managers to navigate difficult conversations with confidence and empathy.
The company is also organizing training sessions to help managers differentiate levels of employee impact and reward top performers more effectively.
Broader Implications
Microsoft’s performance management overhaul comes months after the company terminated 2,000 underperforming employees without severance pay.
This move underscores the company’s commitment to raising the performance bar across all levels.
The new policies align with Microsoft’s focus on innovation, security, and quality as it prepares for its 51st year and beyond.
Amy Coleman emphasized the interconnected nature of success in her email, stating, “This isn’t just about Microsoft’s success.”
“This is about your success, your team’s success, our customers’ success, and together, fostering a culture where high-performing, winning teams can thrive,” Amy added.
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