Microsoft has introduced a strict new HR policy, enforcing a two-year rehire ban for employees who were terminated due to performance-related issues.
The move, disclosed in internal company documents, represents a significant shift in Microsoft’s workforce management strategy.
It aims to enhance productivity and improve talent retention.
The policy applies to employees who received poor performance ratings or were placed on Performance Improvement Plans (PIPs).
It also affects those who voluntarily exited the company under Microsoft’s Global Voluntary Separation Agreement (GVSA).
The decision aligns with broader industry trends, as tech giants like Amazon and Meta also implement stricter performance evaluation frameworks.
Microsoft Performance-Based Terminations and Rehire Restrictions
Microsoft’s updated performance management process offers employees two options if they fail to meet expectations:
- Commit to a formal Performance Improvement Plan (PIP), which includes specific goals and deadlines for improvement.
- Exit the company voluntarily, receiving a severance package worth 16 weeks of pay under the GVSA program.
Employees who fail to meet PIP requirements or choose voluntary separation will be barred from reapplying to Microsoft for two years.
Additionally, employees with low performance ratings (zero or 60% rewards outcomes) will be ineligible for internal transfers.
This restriction further limits their career mobility within the company.
Employee Reactions and Industry Comparisons
The policy shift has sparked mixed reactions among employees, with some expressing concerns over transparency and fairness.
Critics argue that the two-year rehire ban may discourage risk-taking and innovation, while supporters believe it will enhance accountability and reward high performers.
Microsoft’s approach mirrors Amazon’s “unregretted attrition” metric, which tracks employee departures as positive outcomes, and Meta’s internal block lists, which prevent certain former employees from being rehired.
AI-Driven Performance Management at Microsoft
To support managers in implementing the new policy, Microsoft is rolling out AI-supported tools designed to facilitate difficult conversations about performance.
These tools aim to create a globally consistent and transparent experience, ensuring that employees understand expectations and consequences.
Additionally, Microsoft is organizing training sessions for managers, helping them navigate the updated reward structures and performance evaluation criteria.
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