IT giant Microsoft has rolled out a new set of policies to tighten its performance management processes. According to it, underperforming employees get an option to take a payout to leave the company, instead of getting into performance improvement plan (PIP).
Microsoft is giving 16 weeks of pay to underperforming employees who want to leave voluntarily. According to Economic Times, this strategy resembles the ‘Pivot’ programme by Amazon where the focus is more on termination rather than supporting employee development.
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The company’s new Chief People Officer sent out internal emails with updated tools and guidelines to help managers identify low performers and reward high performers with greater clarity.
Employees on PIP have two options – either take the improvement plans with rigorous performance targets or quit taking the package and leave. The separation programme is being called Global Voluntary Separation Agreement (GVSA) within the company.
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Those who opt for PIP don’t have the option of taking payment and the employees have to decide within 5 days.
Also, employees falling in the 0 to 60% reward band will not be eligible for internal job transfers. They will not be eligible for rehire for two years, in case they choose to quit.
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The move is seen as a part of a bigger shift in the tech industry, where companies are now focused on productivity and efficiency after years of rapid hiring and expansive perks.
PIP will be accessible through out the year, enabling managers to respond to performance issues, while giving options to employees.
Earlier this year, Microsoft laid off 2000 employees for under performance.
A globally uniform performance improvement process has also been introduced. Though the company hasn’t released an official statement, internal communications show that performance is key. The idea is to cultivate a culture where high-performing teams are empowered to thrive and develop.
