Microsoft has given employees a five-day deadline to accept its newly introduced performance management policy or opt for a voluntary exit. This is the company’s strategy to promote high performance and accountability across teams.
The updated policy, announced internally by Amy Coleman, chief people officer, introduces stricter performance benchmarks and consequences. At the core of the overhaul is a globally consistent Performance Improvement Plan (PIP), which offers underperforming employees a choice: meet defined performance goals within a specific timeline or exit the company through a voluntary separation package.
Employees flagged with poor performance ratings—categorised as zero or 60 per cent rewards—will face immediate restrictions. They will be ineligible for internal transfers and barred from being rehired for two years after leaving Microsoft. These steps aim to curb internal job hopping by employees who have not demonstrated the required performance standards.
The five-day response window underscores the urgency of Microsoft’s new approach. This move comes shortly after the company laid off 2,000 employees earlier this year without severance, most of whom were identified as low performers.
In addition to the policy changes, Microsoft plans to roll out AI-powered tools to assist managers in conducting performance discussions. These tools will offer scenario-based training to help leaders navigate challenging conversations with clarity and empathy.
The tech giant is also revising its rewards and recognition structure. New guidelines will bring greater transparency to compensation decisions and help managers differentiate rewards based on measurable impact.
Microsoft’s performance revamp reflects a broader industry shift from employee perks to accountability-driven cultures.
