CTOs use a tough job market as an opportunity to “clean up” low performers

  • Tech workers who survived layoffs this year are likely to face tougher performance reviews next year.
  • Salesforce and Meta require managers to mark 10% to 15% of people on teams as low performers.
  • CEOs may see industry-wide disruption as an opportunity to “clean up” workers who are considered “heavyweights”.

For the army of Silicon Valley workers still holding on to their jobs, getting to the end of 2022 will feel like a relief after a year that saw 150,000 tech workers laid off. But they may not have been out of the woods yet.

From Meta to Salesforce, tech companies across the board are looking to tighten their belts even further in 2023 using a tactic unpopular with workers: stack ranking.

Stack rating evaluates employee performance by comparing it and considers a certain percentage of workers as the best performers and a certain percentage as the low performers.

Require managers to find a larger percentage of their reports since tech companies are already using lower performers as part of “quiet layoffs” to cut costs, and avoid the PR pain of large-scale layoffs by managing people through performance reviews and internal restructuring And the

But the tougher job market for tech workers, Silicon Valley CEOs are more comfortable using the stack arrangement to put more people in the underperforming bucket, in a reversal of power as management gains the upper hand over labor after years of competing for workers.

CEOs see opportunity for ‘spring cleaning’

For Stevie Buckley, co-founder of Talent Stuff, a staffing platform for tech companies, it’s not surprising to see companies become more aggressive about performance during times of economic turmoil.

“In these scenarios where there is an industry-wide impact of mass layoffs and layoffs, it is standard practice to use this opportunity virtually — that’s a dreadful term — but ultimately as a ‘quick clean’ of your employee list,” he said.

Such scenarios, Buckley noted, make it easier for companies to present increasingly vague notions of what counts as low performance.

Employees who “prove to be difficult” or “heavyweights” among senior management, he said, could be added to this category because “there are question marks about the value you get” from such employees.

How Silicon Valley is stacking workers

In November, Insider reported that software giant Salesforce had implemented a quota system that gave sales teams “unrealistic goals and difficult calculations,” with insiders saying they felt set to fail.

Salesforce claimed in November that the “sales performance process leads to accountability,” and this could lead to “some left to work.”

At the beginning of December, Salesforce managers were asked to update the rankings for the bottom 10% of employees, despite hundreds of layoffs last month.

Meta also put performance front and center. The company asked managers to mark 15% of their teams as “needing support” in October, shortly before Meta laid off 11,000 people in November.

The company now wants to identify more low performers. Last week, Insider reported that the number of people who find themselves in the lowest performing categories come annual performance reviews in January will nearly double.

Snap, Snapchat’s parent company, also used performance appraisals before layoffs. Managers were told to put 10% or more of their employees on performance improvement plans at the start of the summer. At the end of August, Snap cut nearly 20% of its full-time workforce.

Even Google’s parent company, Alphabet, considered by many to be the most suitable company to work for in Big Tech, has indicated it will ramp up its performance ratings. Under a new system introduced this year, up to 6% of workers could be given a poor performance rating, up from 2% under the previous system.

Those who remain will likely have to meet higher expectations—Salesforce teams have had higher sales goals, Buckley said.

“If you make a group of people redundant, it can then be very common to raise targets,” he said. “This gives you the opportunity to include others in that underperforming category because you have arbitrarily raised the bar in terms of what is expected.”

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