Microsoft has implemented new internal policies aimed at enhancing its performance management processes. According to an internal email sent to managers by Amy Coleman, the company’s new Chief People Officer, the updated guidelines are designed to help managers quickly address underperformance and reward top contributors more clearly.
One of the significant changes includes a stricter exit path for employees who consistently score low on performance reviews. Employees falling within the 0 to 60 percent reward bracket will no longer be eligible for internal job transfers. Furthermore, if they leave the company under these conditions or through a formal improvement plan, they will be barred from being rehired for the next two years.
“Employees with zero and 60 percent Rewards outcomes and/or on an active Performance Improvement Plan (PIP) will not be eligible for internal transfers. Former employees who left with zero or 60 percent Rewards or during/after a PIP will not be eligible for rehire until two years after their termination date,” the company stated in the internal email.
This move is part of a broader shift observed across the tech industry, where companies have become more focused on productivity and efficiency following years of rapid hiring and expansive perks. Earlier this year, Microsoft reportedly laid off around 2,000 employees marked as underperformers without offering severance.
Coleman’s email also mentioned that Microsoft is introducing new performance-related tools for FY25 to create more transparency and consistency in performance evaluation and rewards. Managers are encouraged to attend upcoming sessions to understand the changes, including how to differentiate between varying levels of impact when deciding rewards and bonuses.
A globally uniform performance improvement process has been introduced, allowing managers to place struggling employees on a structured improvement plan with specific targets and timelines. Employees will have the option to either work towards improvement or leave voluntarily with a separation offer under the new Global Voluntary Separation Agreement (GVSA).
Microsoft is also developing initiatives to help managers handle performance conversations more effectively, including AI-based training tools that simulate real-life feedback scenarios. These tools will enable managers to navigate difficult discussions with confidence.
