Microsoft’s HR Policy: Two Year Rehire Ban on Underperforming Employees

In a major change in its management strategy, Microsoft has implemented a two-year rehire prohibition for staff members laid off because of performance issues. The step is part of a larger move to get rid of underperformers and stop their reinstatement to the company. Under a system currently being tested, the tech company has been monitoring "good attrition," a measure that considers some employee turnover as a good thing.

Performance Improvement Plans and Exit Options

Microsoft's new performance improvement process provides underperforming employees with two alternatives: accept a performance improvement plan (PIP) with specific expectations and an improvement timeline, or agree to leave voluntarily with a 16-week separation package. Employees with low performance ratings or on an active PIP will be ineligible for internal transfers.

Rehire Ban and Eligibility Criteria

Former employees who left the company due to performance issues will not be eligible for rehire for two years after their termination date. This policy change is part of a larger effort to maintain a high-performing workforce and prevent underperformers from returning to the company.

Industry Trend Towards Stricter Management

Microsoft's embracing these policies parallels others in the industry's leading companies. Amazon's "unregretted attrition" policy and Meta's internal block lists are just two instances of how the companies are getting more stringent on performance demands. Industry experts view these developments as a move toward more performance-driven layoffs and fewer employee benefits.

Moving Away from Old Culture

Microsoft's new policies represent a dramatic shift from the firm's earlier "growth mindset" culture under CEO Satya Nadella. The organization had abandoned the widely criticized stack-ranking system employed before 2014. The new policies indicate a tougher stance on performance management, with a focus on top performers and trimming underperformers.

Implications for Employees and the Industry

The consequences of Microsoft's new policies extend far and wide. Those employees who are failing to deliver performance may be faced with hard choices such as accepting a PIP or resigning. The industry-wide trend towards tighter management can contribute to a competitive and results-oriented work culture, but it is also at the expense of employee welfare and job security.

In summary, Microsoft's revamp of its performance management policies is part of a wider trend in the tech sector towards tougher performance demands and fewer worker benefits. As business firms favor their best performers and drop underperformers, workers have to change in a more competitive workplace.

Also read: CUET UG 2025 Exam Date likely to be Postponed: New exam date!