Microsoft managers received guidance last Friday outlining new, stricter company policies for handling employee performance, signaling a clear move towards increased accountability across the Redmond giant.
An internal email from Amy Coleman, Microsoft’s recently appointed Chief People Officer with a long history at the company including prior experience developing performance management strategies, details several changes. These include a formalized process for managing underperformers involving a choice between an improvement plan or voluntary separation, alongside new restrictions preventing internal moves and implementing a two-year rehire ban for those exiting under these circumstances.
The changes arrive as Microsoft, like others in the tech sector, balances efficiency drives with continued investment in areas like artificial intelligence.
Formalizing the Performance Improvement Path
Central to the update is a more structured Performance Improvement Plan (PIP) process, a tool seeing increased use across industries often viewed as a path toward documenting for termination.
Microsoft aims for a globally consistent approach. According to Coleman’s email obtained by Business Insider, employees identified as not meeting expectations will enter the PIP process but are now presented with a choice: engage with the plan aimed at meeting expectations within a defined period, or accept a Global Voluntary Separation Agreement (GVSA), which functions as an alternative to exit the company with a separation offer.
This formalized structure contrasts with reports from Microsoft’s performance-based cuts earlier in January 2025, where affected employees allegedly faced immediate removal and no severance packages mentioned in termination letters. Coleman’s communication frames the goal now as enabling managers “to address performance challenges with clarity and empathy,” while offering employees choice. The PIP process itself is available year-round.
Raising the Stakes for Performance Reviews
The consequences for not meeting expectations are also becoming more defined under the new policies. Employees receiving lower performance scores – specifically falling into the “zero and 60% Rewards outcomes” category based on Microsoft’s internal 0-to-200 review scale where scores below 100% indicate needing improvement – will be ineligible for internal transfers.
Furthermore, Microsoft is implementing a formal two-year rehire ineligibility period for any former employee who left the company with these low scores or during/after completing a PIP. While anecdotal reports suggested a similar waiting period existed previously, this policy is now officially codified.
To enhance manager decision-making during rewards cycles, Coleman noted they will gain increased transparency, including “showing payout percentages.” Adding another dimension to evaluations, Microsoft confirmed on April 21st that as part of its Secure Future Initiative, all employees must now define and discuss a “Security Core Priority” during performance check-ins, weaving security posture directly into individual assessments alongside other metrics.
Big Tech’s Efficiency Push Continues
These internal policy adjustments at Microsoft mirror a broader trend across the technology industry, which is intensifying its focus on workforce efficiency. Meta, for example, detailed plans in January 2025 for more extensive performance-based cuts, with CEO Mark Zuckerberg stating in a memo an intention to “raise the bar on performance management and move out low-performers faster.”
Meta also reportedly uses “block lists” to prevent rehiring certain former employees. This renewed focus on performance metrics has led observers to note the return of methods reminiscent of “Rank and Yank” or stack ranking, a system forcing comparative employee evaluations, which Microsoft and others had previously used and then moved away from.
Balancing Performance with Strategic Investments
Microsoft is implementing these stricter internal measures while simultaneously directing resources towards strategic growth areas, particularly cloud services via Azure and artificial intelligence tools like Copilot, which integrates machine learning into Microsoft´s applications.
The company is providing managers with updated training and plans to introduce AI-supported tools to assist with difficult performance conversations, aiming for consistency. Coleman’s email frames the changes within this context: “our focus remains on enabling high performance to achieve our priorities spanning security, quality, and leading Al,” adding the aim is “fostering a culture where high-performing, winning teams can thrive.”
