Facebook parent company Meta has announced that it will be reducing bonus payments and increasing the frequency of performance reviews for its employees. These changes are part of CEO Mark Zuckerberg’s “year of efficiency,” which aims to maintain a high-performance culture while cutting costs.
Facebook’s Performance Review System
The new performance review system will involve regular reviews twice a year, with lower-performing employees receiving less bonus pay. Meta intends to conduct more regular assessments of employee performance, making the system more evidence-based and less ambiguous.
Changes in Bonus Payouts
Lower-performing employees at Meta will receive less bonus pay, with the maximum payout now capped at 65% of their base pay instead of the previous 85%. Employees who receive a “met most” expectations rating will still receive a bonus payout, but it will be reduced by 20%.
Meta’s High-Performance Culture & Layoffs
Meta’s plans to reduce bonuses for employees with “met most expectations” and increase the frequency of performance reviews are part of its efforts to maintain a high-performance culture. This focus on performance has led to increased pressure on workers, resulting in more employees being classified as underperforming.
To further cut costs, Meta announced plans to lay off around 10,000 employees in a staggered layoff process that will see tech and engineering employees let go in April, followed by business departments in May. The upcoming performance review in June will include a three-point grading system that assesses if an employee is performing significantly above, at or above or below expectations.
Response from Laid-off Employees & Wall Street
Laid-off employees have expressed their dismay over losing their jobs on social media platforms like LinkedIn. However, Wall Street investors seem to have received Meta’s restructuring plan positively as the company’s stock has surged over 62% since the start of the year.
Meta’s changes to its bonuses and the performance review process are not related to workforce restructuring but are aimed at optimizing for the future. The company hopes that these changes will lead to a more productive, efficient and high-performing workforce that aligns with its goals for growth and profitability.
In conclusion, Facebook parent Meta’s cost-cutting measures and restructuring plans could have far-reaching implications for employee performance management in leading companies. As leading companies like Meta, Google, Amazon, Salesforce and Goldman Sachs continue updating their performance management practices to reflect new business needs and economic trends, it remains to be seen how they will strike a balance between maintaining a high-performance culture while retaining their best employees.
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