- Microsoft has a new two-year rehire ban on underperforming employees now.
- This policy categorizes such dismissals as good attrition to enhance efficiency.
- The tech industry is moving toward stricter performance management policies.
Microsoft has implemented a stringent performance management policy, introducing a two-year rehire ban for employees dismissed due to underperformance, according to a report by Business Insider. These terminations are categorised as "good attrition", reflecting the company's intent to part ways with employees not meeting performance standards. This move aligns with a broader industry trend among tech giants like Meta and Amazon, which have adopted similar strategies to enhance workforce efficiency.
The company has also introduced a Performance Improvement Plan (PIP), offering employees a choice between engaging in a structured improvement process or accepting a voluntary separation package. Employees opting for the PIP and failing to meet expectations face termination and the subsequent two-year rehire ban.
These measures are part of Microsoft's efforts to foster a high-performance culture, emphasising accountability and aligning with its strategic goals in artificial intelligence and cloud services. The company aims to ensure that its workforce comprises high-performing individuals capable of driving innovation and maintaining a competitive advantage in the tech industry.
According to a Business Insider report, overall, the industry is shifting toward more rigorous performance expectations and less coddling. Performance-based cuts are becoming more common as tech companies get tougher on employees.
Earlier this year, Microsoft fired 2,000 employees deemed underperformers without severance and started a new performance improvement plan. A recent internal email sent to Microsoft managers, viewed by BI, said this new plan was "globally consistent" with "clear expectations and a timeline for improvement".
The process gives employees an option to enter the PIP or quit and accept a "Global Voluntary Separation Agreement", according to another email that BI viewed. Another document, also viewed by BI, shows the agreement includes a payout equal to 16 weeks' pay.
