Microsoft to Underperformers:
New policy signals substantial change in Microsoft’s performance culture A new bold policy that targets employees who underperform has turned Microsoft upside down in its performance management. In a recent e-mail by Chief People Officer Amy Coleman, the underperforming employees have been handed an unusually bold and controversial plan that gives them five days to make a life-changing choice between either accepting a painstaking Performance Improvement Plan or taking a generous payout and walking out of the door for good.
Exit or Improve: A Five-Day Ultimatum
Employees with low performance will now face a very clear and urgent choice. Employees accepting PIP need to demonstrate a marked improvement in performance. On the other hand, Microsoft is offering an exit option called the Global Voluntary Separation Agreement (GVSA). This exit package offers 16 weeks’ pay for those opting to exit rather than endure a punishing PIP. The window to decide is just five days — time is running out fast.
No Second Chances: Barred from Rehire and Job Transfers
The new policy is equally punitive. Anyone opting for severance or the PIP cannot be considered for rehiring – anywhere – at Microsoft for a period of two years. Employees will also be hampered from transferring to any other jobs in that time frame. These changes ensure the swift action upon any performance issue and reduce the likelihood of low-rated employees switching between teams.
Culture of Accountability or Culture to Push Out?
In the internal memo, Microsoft is trying to proceed with a “globally consistent and transparent experience” for all departments. Coleman stated that this action further strengthens the “culture of accountability and growth,” emphasizing that every role must have high performance.
Now the new performance system will be active throughout the year so managers can quickly intervene when performance dips. This policy comes immediately after Microsoft’s previous layoffs of around 2,000 underperformers on severance-free terms.
Its design is apparently closely paralleling Amazon’s operations with its own criticized system of performance measurement for being more of a tool to cut staff than to aid in improvement. As Microsoft rolls forward with this new initiative, all eyes are on it to see whether it carries the principles of growth or merely fast-tracks exits.
