Microsoft tightens rules for underperformers: No rehiring for 2 years
What's the story
Microsoft is doubling down on managing employee performance, tightening the screws on underperformers.
As per an internal email, the tech giant has placed a ban on internal transfers and a two-year rehire block.
The new policy applies to employees who are consistently rated low in performance reviews.
This is part of a wider industry shift toward prioritizing efficiency and accountability.
Policy
New rules for employees rated poorly
The new policy impacts workers who fall in the 0-60% rewards category, basically those rated poorly in performance reviews.
These employees will no longer be permitted to apply for other internal roles at Microsoft.
Additionally, if they leave while on a Performance Improvement Plan (PIP) or with a low reward score, they won't be eligible for rehire for two years.
Tool rollout
Microsoft introduces new performance management tools
These new rules come just as Microsoft is introducing performance management tools for the next fiscal year.
Amy Coleman, Microsoft's new Chief People Officer, said the aim is to offer managers better ways to assess employee impact and reward top performers more clearly and consistently.
Training sessions are also being conducted to help managers adapt to these updates.
Global
Global standardization of handling underperformance
Microsoft is standardizing its approach to handling underperformance across the globe.
Managers now have the option to put struggling workers on structured improvement plans, with specific goals and deadlines.
Those failing to meet the expectations can choose to leave voluntarily under a new exit plan called the Global Voluntary Separation Agreement (GVSA), which includes a separation offer.
AI training
AI-based tools to train managers
To help managers deal with tough conversations around performance, the firm is also bringing AI-based training tools.
These will simulate real-life scenarios, allowing leaders to provide constructive feedback more confidently and empathetically.
Earlier this year, Microsoft reportedly let go of around 2,000 underperformers without severance pay, signaling a commitment to raising the performance bar across all levels.