Microsoft Implements 2-Year Rehire Ban For Underperforming Ex-Employees: Report

Microsoft has instituted a policy enforcing a 2-year rehire ban on employees dismissed for underperformance, categorizing such exits as good attrition.

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This initiative is part of a broader strategy to enhance workforce efficiency.
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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. 

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