Microsoft tightens reins on staff with stricter performance policy

Employees who leave because of poor performance cannot reapply for two years

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Microsoft is adopting stricter performance policies under the leadership of chief people officer Amy Coleman. These changes are designed to cultivate a culture of high performance by quickly addressing underperformance and recognising exceptional work. Key changes include a two-year ban on reassignment for employees who leave because of poor performance, and restrictions on internal transfers for employees who receive poor ratings.

Coleman emphasised that these measures promote agility, accountability and excellence within the organisation. The goal is to create an environment where top performers are encouraged and supported, while poor performance is addressed directly and constructively.

The new framework introduces “enhanced tools” to accelerate good performance and consistently address performance issues globally. Managers receive training in defining “significant impact”. A standardised performance improvement plan (PIP) provides clear expectations and timelines for improvement. Employees can choose voluntary dismissal if they reject participation in the PIP.

In addition, employees with 0% or 60% performance pay results, or who are in an active PIP, are not eligible for internal transfer. Former employees with low performance scores or those who left after a PIP cannot reapply for two years.

Coleman emphasised that these changes not only affect Microsoft’s success, but also benefit individual managers, their teams and customers. The goal is to cultivate a culture in which high-performing, winning teams can thrive. This shift is consistent with a broader trend in the tech industry, moving away from cultures driven by rewards and toward accountability models.

This policy demonstrates a focus on results and continuous improvement. By setting clear consequences for persistent underperformance and limiting role shifting without improvement, the company aims to streamline talent mobility and raise global team standards. Microsoft’s increased focus on managing underperformance joins a growing movement among large employers to tighten performance standards amid economic uncertainty and rapid technological advances.

Business AM

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