Having Thomas Edison as one of its founders, General Electric is an American multinational conglomerate that was founded in 1892. Given that GE is the company that made stack ranking popular in the 80's and 90's, the commotion this move has created is no big surprise. It is of course great news that innovative companies are trailblazing performance management, but the biggest milestone is probably the announcement that General Electric (GE) is reinventing its performance management. Amazon was chastised because of its suspicious people management practices. Adobe, Accenture and Deloitte all announced that they are changing their performance reviews by getting rid of rankings and implementing frequent performance conversations to enable employee growth. There is nothing we cannot accomplish when we work together as One Microsoft.These days, not another day passes without an industry leader announcing that they are done with their inefficient performance review processes. Coming together in this way will reaffirm Microsoft as one of the greatest places to work in the world. I’m excited about this new approach that’s supported by the Senior Leadership Team and my HR Leadership Team, and I hope you are too. We are also briefing managers and will continue to provide them with resources to answer questions and support you as we transition to this approach. We will transition starting today, and you will hear from your leadership in the coming days about next steps for how the transition will look in your business. I look forward to sharing more detail with you at the Town Hall, and to bringing the new approach to life with leaders across the company. Our new approach will make it easier for managers and leaders to allocate rewards in a manner that reflects the unique contributions of their employees and teams.
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Just like any other company with a defined budget for compensation, we will continue to need to make decisions about how to allocate annual rewards. And we will continue to ensure that our employees who make the most impact to the business will receive truly great compensation. We will continue to align our rewards to the fiscal year, so there will be no change in timing for your rewards conversation with your manager, or when rewards are paid. This will let us focus on what matters – having a deeper understanding of the impact we’ve made and our opportunities to grow and improve. Managers and leaders will have flexibility to allocate rewards in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget. No more curve.We will continue to invest in a generous rewards budget, but there will no longer be a pre-determined targeted distribution.Our business cycles have accelerated and our teams operate on different schedules, and the new approach will accommodate that. These will be timed based on the rhythm of each part of our business, introducing more flexibility in how and when we discuss performance and development rather than following one timeline for the whole company. Through a process called “Connects” we are optimizing for more timely feedback and meaningful discussions to help employees learn in the moment, grow and drive great results. More emphasis on employee growth and development.We’re getting more specific about how we think about successful performance and are focusing on three elements – not just the work you do on your own, but also how you leverage input and ideas from others, and what you contribute to others’ success – and how they add up to greater business impact. More emphasis on teamwork and collaboration.This change is an important step in continuing to create the best possible environment for our world-class talent to take on the toughest challenges and do world-changing work. We have taken feedback from thousands of employees over the past few years, we have reviewed numerous external programs and practices, and have sought to determine the best way to make sure our feedback mechanisms support our company goals and objectives. This is a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact. The changes we are making are important and necessary as we work to deliver innovation and value to customers through more connected engagement across the company. I am pleased to announce that we are changing our performance review program to better align with the goals of our One Microsoft strategy.
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