New evaluation system: Microsoft wants to get rid of "underperformers"

[German]New appraisal system: Microsoft wants to get rid of "underperformers "Microsoft management has plans to get rid of some of its employees who are underperforming. To this end, a new appraisal system is being introduced in the 51st year of the company's history to identify such employees. This emerges from an internal email to managers, which is available to Business Insider.

I came across this topic two days ago via the German article Microsoft will offenbar Low Performer loswerden – interne E-Mail an Manager enthüllt Details zu neuen Richtlinien from Business Insider. There is apparently an internal email to managers that reveals new guidelines for personnel management.

Business Insider refers to an internal email from Amy Coleman, Microsoft's new head of HR, which the editorial team was able to view (I have posted the text of the email at the end of the article). Coleman sent the email to Microsoft managers on Friday, April 18, 2025. This group of managers will be informed about "new and improved tools to help you accelerate high performance and address low performance quickly" at Microsoft.

According to Business Insider, there is a new option outlined in the email for firing employees who are not performing as expected. A policy prohibits these employees from transferring within Microsoft or being rehired by the company for two years.I already came across the topic two days ago via the post Microsoft apparently wants to get rid of low performers – internal email to managers reveals details of new policy from Business Insider. There seems to be an internal email to managers that reveals new guidelines for personnel management.

A new wave of "firing employees" likely to occur at Microsoft. At the beginning of 2025, Microsoft had already laid off 2,000 employees without severance pay. These employees were classified as low performers by their managers, writes Business Insider.

The Business Insider editorial team cites reports from insiders that Microsoft managers spent months evaluating employees up to management level as part of changes to the company's performance evaluation and management process.

Microsoft is in its 51st year, where new rules for performance reviews are now set to take hold in fiscal year 25 (FY25). In the email, which was published in full by Business Insider, Microsoft executives are offered a 60-minute virtual, facilitated session titled Manager Readiness: FY25 Performance, Connection and Rewards to dive deeper into the performance landscape at Microsoft, so a new wave of layoffs at Microsoft is likely on the horizon. At the beginning of 2025, Microsoft had already laid off 2,000 employees without severance pay. These employees were classified as low performers by their managers, writes Business Insider.

The Business Insider editorial team cites reports from insiders that Microsoft managers spent months evaluating employees up to management level as part of changes to the company's performance evaluation and management process.

There is probably a process for performance improvement. If an employee is not meeting expectations, managers can use the Performance Improvement Plan (PIP). This is a new, globally standardized approach to setting clear expectations and a timeline for improvement. The appraised employee can accept the improvement plan or choose to leave the company with the offer of a Global Voluntary Separation Agreement (GVSA). This performance improvement process is available throughout the year, allowing managers to act quickly to address performance issues transparently while offering employees a choice, it says.

Microsoft also plans to launch several initiatives in the coming months to improve measures to manage and motivate teams to achieve optimal results for our customers. Managers will have access to scenario-based, AI-powered tools to help them prepare for constructive or challenging conversations. Managers will be able to practice in an interactive environment.

It all sounds like a threat – employees at Microsoft will have to dress warmly – and in my opinion the plan will also affect customers. Microsoft employees are going to have to sell their stuff like crazy (be it in sales, development or support).Microsoft is now in its 51st year, where new performance review rules are set to kick in for fiscal year 25 (FY25).

In the email, which was published in full by Business Insider, Microsoft executives are offered a 60-minute virtual, facilitated session titled Manager Readiness: FY25 Performance, Connection and Rewards to dive deeper into the performance landscape at Microsoft, so a new wave of layoffs at Microsoft is likely on the horizon. At the beginning of 2025, Microsoft had already laid off 2,000 employees without severance pay. These employees were classified as low performers by their managers, writes Business Insider.

The Business Insider editorial team cites reports from insiders that Microsoft managers spent months evaluating employees up to management level as part of changes to the company's performance evaluation and management process. In 2013 I have had a post Microsoft wirft Mitarbeiterbeurteilungssystem über Bord within my German blog about Microsoft throwing the employee appraisal system overboard. At that time, the the ranking system (Stacked Ranking or Forced Ranking), which was previously used at Microsoft for personnel assessment, was dumped. Now this system seems to be coming back under a new name.