Microsoft Takes Tough Stance on Underperformers
Microsoft is intensifying its approach to employee performance management by implementing stricter measures for underperformers. In an internal email to managers, the company outlined new rules, including a ban on internal transfers and a two-year rehire block for those consistently rated low.
Employees who fall in the 0 to 60 percent rewards category will no longer be allowed to apply for internal roles within the company. If they leave while on a Performance Improvement Plan (PIP) or with a low reward score, they’ll be ineligible for rehire for two years. “Employees with zero and 60 percent Rewards outcomes and/or on an active PIP will not be eligible for internal transfers,” Microsoft said in its memo.
The new rules are part of a wider shift in the tech industry to prioritize efficiency and accountability after years of rapid hiring. Microsoft is also introducing new performance management tools for the upcoming financial year. Amy Coleman, Microsoft’s newly appointed Chief People Officer, said the goal is to give managers better ways to assess employee impact and reward top performers more clearly and consistently.
Clearer Paths to Improve or Exit
Microsoft is standardizing how it handles underperformance globally. Managers can now place struggling employees on structured improvement plans with specific goals and deadlines. Those who don’t meet expectations can choose to leave voluntarily under a new exit plan called the Global Voluntary Separation Agreement (GVSA), which comes with a separation offer.
To help managers handle difficult conversations around performance, Microsoft is introducing AI-based training tools. These simulate real-life scenarios, helping leaders deliver constructive feedback more confidently and empathetically.
The move comes after Microsoft reportedly let go of around 2,000 underperformers with no severance earlier this year, signaling the company’s seriousness about raising the performance bar across all levels.
