For Performance Reviews, Microsoft Managers Are Warned Not…[ad_1]
- Microsoft is notifying employees this month about how their performance affects their paychecks.
- Notably, the company froze salaries this year and cut its budget for bonuses and stock awards.
- An internal guide tells managers how to answer when employees ask how those changes impact pay.
August is typically the month Microsoft tells employees if they got a raise. But this year, after freezing salaries and cutting budgets for bonuses and stock awards, the company told managers not to discuss its budget with employees during their performance reviews.
Microsoft's annual review cycle generally begins with performance reviews starting in April, notifications about how performance affects compensation beginning in mid-August, and a payout on September 15. Three Microsoft employees who shared review and pay details with Insider say stock awards are making up a bigger portion of their bonuses this year than usual.
In May, CEO Satya Nadella informed employees that Microsoft will not raise salaries for full-time employees this year, and will reduce its budget for bonuses and stock awards via an email viewed by Insider
In another email the same day, Microsoft Chief People Officer Kathleen Hogan instructed managers to give fewer employees "exceptional rewards," meaning a high performance rating that leads to higher pay and bonuses. "More will need to be at the middle of the range," Hogan said in the email.
And now a guide for managers conducting performance reviews, viewed by Insider, instructs managers on how to answer when employees ask how these budget cuts impact an individual's pay.
"It's natural for employees to ask questions about budget given the decisions shared in Satya's email," the guide states. "However, it's most important to focus discussions with direct reports on their impact for the past fiscal year and directly tie it to their rewards."
Managers should not use the budget cuts as an "explanation" for compensation decisions for individual employees and instead should emphasize that the employee's own "impact" determines "rewards."
"Using budgets or factors besides the employee's impact as an explanation for an employee's rewards will erode trust and confidence within your team," the guide continues. "Reinforce that every year offers unique opportunity for impact, and we increase our high expectations, regardless of our budget."
Are you a Microsoft employee or do you have insight to share? Contact reporter Ashley Stewart via the encrypted messaging app Signal (+1-425-344-8242) or email (firstname.lastname@example.org).
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