Meta Platforms Inc. just became the latest tech company to rejig its performance review process to hone in on an employee’s output, as opposed to effort.
The company is rolling out a new performance review platform called Checkpoint, which will grade workers, grouping them into four categories and rewarding top performers for exceptional work, according to internal documents obtained by Business Insider.
“We’re evolving our performance program to simplify it and placing greater emphasis on rewarding outstanding performance,” a Meta spokesperson told Fortune. “While our employees have always been held to a high-performance, impact-based culture, this new direction allows for more frequent feedback and recognition in a more efficient way.”
The memo outlined the predicted distribution of outcomes and pay multipliers for base bonuses. About 20% of employees will be labeled “Outstanding” and will be eligible for a bonus double their pay; 70% will be labeled “Excellent” with a 115% pay bonus; around 7% will fall into the “Needs Improvement” category, eligible for a bonus up to 50% of pay.
Around 3% of employees may be labeled “Not Meeting Expectations” and will be ineligible for a bonus. On the other hand, the system will reward top performers with bonuses worth up to 300%.
The performance review update comes as other Big Tech companies have overhauled their performance review systems to better reflect employee performance. Amazon’s new review system asks corporate workers to list three to five accomplishments that reflect their best work. And in 2022, Elon Musk asked X (formerly Twitter) employees to explain what they accomplished every week.
Meta is planning a company-wide meeting Jan. 22 to further explain the changes to employees. The new changes will impact the 2026 performance cycle and will not change the current review cycle. The new system will entail two review cycles per year, using the same rating system each cycle. As part of this new review timeline, bonuses will be paid out twice annually.
Efficiency is the name of the game for tech giants
Tech companies have increasingly sought concrete examples of output as proof of productivity, requiring that employees demonstrate how well they perform. While outcomes have been a longstanding cornerstone of corporate performance reviews, the new push toward output-based assessments reflects a growing desire among tech leaders to incentivize employees to prove outstanding performance.
Amazon CEO Andy Jassy has pushed to reduce management layers and to eliminate bureaucracy since taking over from founder Jeff Bezos in 2021. Google CEO Sundar Pichai said in 2022 that he was aiming to make the company more lean to promote “product excellence and productivity.”
Vast changes at Meta
That has been the trend at Meta, where the tech company called 2023 the “year of efficiency” as the company scaled back headcount. In 2022, the company laid off about 13% of its workforce, or 11,000 employees. And last year, the company cut 5% of its workforce, or roughly 3,000 workers, targeting low performers.
To be sure, an update to Meta’s performance review system is not a warning sign that additional layoffs are on their way. But Meta is set to announce layoffs this week in the company’s Reality Labs business, according to reporting by The New York Times, as the company scales back its metaverse unit.
“We typically manage out people who aren’t meeting expectations over the course of a year,” Meta CEO Mark Zuckerberg said ahead of last year’s cuts. “But now we’re going to do more extensive performance-based cuts during this cycle.”
