Microsoft is adjusting how it manages employee performance, rolling out changes that signal increased scrutiny across the company.
Following earlier modifications to its Performance Improvement Plan (PIP) process communicated internally in late April, the company is now implementing a formal two-year ban on rehiring employees let go for performance reasons and has adopted the term “good attrition” to classify these departures, according to an internal document reported by Business Insider.
These measures represent a deliberate toughening of standards within the software company, aimed at removing employees deemed low performers more quickly and preventing their return, reflecting a wider efficiency push across the technology sector.
The internal document confirms these two approaches are new for Microsoft. The two-year block list specifically targets former employees who left the company due to performance issues, including those who went through a PIP. Alongside this, the company will internally track these exits under the “good attrition” label, signifying departures the company views favorably in its pursuit of higher overall performance.
While sources indicate no specific targets are currently attached to this metric, it is reportedly already under review at the executive level, suggesting its growing importance.
Stricter Performance Framework Takes Shape
These policies arrive shortly after Microsoft formalized other aspects of its performance management system. In late, Chief People Officer Amy Coleman, who has a long history at the company including prior experience developing performance management strategies, communicated updates via internal email.
This outlined a revised Performance Improvement Plan (PIP) process, a tool often viewed as a precursor to termination but framed by Coleman as a way “to address performance challenges with clarity and empathy.”
The updated structure presents employees identified as underperforming with a distinct choice: either engage with the formal PIP, which has defined timelines and expectations for improvement, or accept a Global Voluntary Separation Agreement (GVSA). This separation package, reported by Business Insider based on another document, includes a payout equivalent to 16 weeks’ pay, offering a structured exit alternative.
This formalized choice contrasts with performance-based job cuts reported in January, where some employees were allegedly dismissed immediately and without severance mentioned in termination letters.
New Barriers for Low Performers and Rehires
Adding teeth to its performance evaluations, Microsoft is also restricting internal mobility. Employees whose performance reviews place them in the “zero and 60% Rewards outcomes” category on Microsoft’s internal scale (where scores below 100% signify needing improvement) are now ineligible for internal job transfers.
More definitively, the company is now officially codifying a two-year rehire ineligibility period for any former employee who departed under these low-score circumstances or during/after completing a PIP. While such waiting periods were rumored before, this marks its formal inclusion in company policy.
The introduction of the “good attrition” metric provides executives with a new way to track departures deemed beneficial to overall workforce performance standards. This mirrors terminology and practices seen elsewhere in the tech sector; Amazon famously uses an “unregretted attrition” goal, and Meta reportedly employs “block lists” to prevent rehiring certain individuals, including a “non-regrettable attrition” designation.
Accountability and Industry Trends
These internal adjustments align with a broader industry pattern where tech companies are intensifying their focus on efficiency and employee accountability. Meta’s Mark Zuckerberg explicitly stated intentions in January to “raise the bar on performance management and move out low-performers faster.” The methods recall earlier eras of stack ranking, a comparative evaluation system Microsoft itself once used.
Further emphasizing accountability, Microsoft also confirmed on April 21,that all employees must now incorporate a “Security Core Priority” into their performance discussions, linking individual security posture directly to reviews as part of its Secure Future Initiative.
Managers are gaining more transparency in reward cycles, including “showing payout percentages,” and are receiving updated training and access to AI tools to aid in these performance conversations. Coleman’s email noted the objective is “fostering a culture where high-performing, winning teams can thrive” while pursuing priorities in security, quality, and AI.
These policy shifts are being implemented following a period of noticeable internal activity at Microsoft. In April, the company dismissed several engineers after protests related to Microsoft’s Azure cloud and AI contracts with the Israeli military disrupted 50th-anniversary events. The company cited “willful misconduct” as the reason for those specific terminations.
While distinct from the performance policy changes, these events form part of the recent backdrop against which Microsoft is tightening its internal processes and performance expectations.
