Microsoft's Chief People Officer Amy Coleman unveiled strict new performance management policies in an internal email to managers, emphasizing that the initiative extends beyond corporate success to individual and team achievement. The new approach includes a two-year rehire ban for underperforming employees and prevents low performers from transferring within the company.
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According to an internal memo obtained by Business Insider, the software giant is implementing "new and enhanced tools" designed to "accelerate high performance and swiftly address low performance" as part of the company's focus on accountability and growth. The changes align with broader tech industry trends moving away from employee perks toward performance-based evaluations.
The new policies introduce a Performance Improvement Plan (PIP) that offers underperforming employees a choice: improve within a set timeframe or opt for a voluntary separation package. Additionally, employees receiving low performance scores or those on improvement plans are barred from internal transfers, while former employees with poor performance ratings cannot be rehired for two years.
Microsoft's revamp of its performance management system follows the dismissal of 2,000 underperforming employees without severance earlier this year. The company is also planning AI-supported tools to help managers prepare for difficult conversations with team members.