This IT giant makes big move, 'bans' employees who are..., not Narayana Murthy's Infosys, Google, Ratan Tata's TCS, Wipro, name is...
New Delhi: American multinational corporation and technology conglomerate Microsoft Corporation has put into effect a 'controversial' two-year rehire ban for employees terminated due to performance issues. This change in policy exhibits a major shift in the company's management approach.
According to internal documents obtained by Business Insider, Microsoft is also tracking 'good attrition', a benchmark that counts certain employee departures as positive outcomes for the company. Microsoft recently fired approximately 2,000 employees deemed underperformers without severance and this policy overhaul is being seen as part of a broader part of management policies to release low performers faster and prevent their return to the company.
The new performance plans now include exit options as well. For e.g., the company's new performance improvement process offers struggling employees two choices, 1) Accept a performance improvement plan (PIP) with 'clear expectations and a timeline for improvement' or 2) Voluntarily leave with a separation package equivalent to 16 weeks of pay, reports Business Insider.
'Employees with zero and 60% Rewards outcomes and/or on an active PIP will not be eligible for internal transfers,' stated an internal email to managers from new Chief People Officer Amy Coleman. The email further specified that 'former employees who left with zero or 60% Rewards or during/after a PIP will not be eligible for rehire until two years after their termination date.'
Microsoft's implementation of these policies are very similar to the policies at other tech giants. The 'good attrition' metric resembles Amazon's controversial 'unregretted attrition' system, which sets goals for the percentage of employees organizations should lose annually.
On the other hand, Mark Zuckerberg's Meta maintains comparable internal block lists that prevent certain former employees from being rehired, using designations like 'non-regrettable attrition' and 'do not rehire' flags.
Industry experts see these changes as part of a broader shift across tech companies toward more rigorous performance expectations and reduced employee perks. Microsoft's new policies represent a significant departure from the company's previous 'growth mindset' culture established under CEO Satya Nadella, which had moved away from the controversial stack-ranking system used prior to 2014. The era of employee pampering appears to be ending as performance-based job cuts become increasingly common.
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