Microsoft introduces secret performance-rating system for managers

This approach ensures transparency and consistency and aligns with Microsoft's commitment to reward outstanding performance


Microsoft has introduced a discreet employee performance-rating system known as ‘impact descriptors,’ designed exclusively for managers’ use and not disclosed to employees. These ratings play a pivotal role in determining employees’ compensation and bonuses, referred to as ‘rewards’ within Microsoft. The company emphasises that these descriptors differ from conventional performance ratings or labels associated with individual employees. Not revealed to employees, these ratings promote a growth-oriented mindset.

The impact descriptors include four categories: ‘Lower than Expected Impact (LITE),’ ‘Slightly Lower Impact than Expected (SLITE),’ ‘Successful Impact,’ and ‘Exceptional Impact.’ Each category is defined in detail to guide managers in their assessments via a guidelines document.

The LITE category employees are those who have consistently fallen short of meeting expectations, lacked a growth mindset, or failed to align with Microsoft’s cultural values. As per the descriptors / ratings, those in the SLITE category are the ones who have occasionally missed expectations or have been inconsistent in meeting cultural expectations, yet appear keen to learn and improve. In the ‘successful impact’ category are those employees who consistently meet or exceed expectations, while embracing a growth mindset and aligning with Microsoft’s cultural values. The ‘exceptional impact’ category, as the name suggests, is reserved for employees who consistently deliver exceptional results, exceed all expectations and exhibit an outstanding growth mindset while adhering to Microsoft’s cultural values.

Managers are encouraged to evaluate and assess employee performance or ‘impact’ basis these impact descriptors and explain how an employee has demonstrated a particular level of impact during the fiscal year. However, they are explicitly discouraged from using the acronyms LITE, SLITE and so on, or turning the descriptors into ratings or labels.

The company’s managers are supposed to use these descriptors only as a guidance tool to assess employee impact, facilitate reward decisions, and offer constructive feedback.

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