Leaked Microsoft documents reveal a new employee rating system only visible to managers

• Microsoft introduced a new rating system for employees in performance reviews, documents show.
• The new ratings determine pay, but Microsoft has instructed managers not to share it.

Microsoft introduced a new rating for employees in performance reviews that are visible only to managers, documents viewed by Insider show.

The ratings are used to determine employees' "rewards," Microsoft's term for pay and bonuses. Microsoft calls the new ratings "impact descriptors" and, in a guide for managers viewed by Insider, insists they are different than ratings or labels applied to individuals and "will not be employee facing."

"We don't use performance ratings or labels since it goes against our growth mindset culture where anyone can learn, grow, and change over time," one document states.

The ratings are "Lower Impact Than Expected (LITE)," "Slightly Lower Impact Than Expected (SLITE)," "Successful Impact," and "Exceptional Impact," as defined in a rubric viewed by Insider called "benchmark guidance for determining impact" marked as "manager only resource."

Here's the full description for each rating:

• Lower Than Expected Impact (LITE): "When an employee has: not met or inconsistently met expectations during the current fiscal year and/or not demonstrated a growth mindset by taking personal accountability for setbacks, asking for feedback and applying learnings to have greater impact and/or fallen short of meeting Microsoft cultural expectations and values."

• Slightly Lower Impact Than Expected: "When an employee has: missed a few opportunities to meet expectations and demonstrated a growth mindset by taking personal accountability for setbacks, asking for feedback and applying learnings to have greater impact and/or inconsistently met Microsoft's culture expectations and values."

• Successful Impact: "When an employee has: consistently delivered against all expectations, in many cases, successful impact likely meant exceeded some expectations as well, and demonstrated a growth mindset by taking personal accountability for setbacks, asking for feedback and applying learnings to have greater impact and consistently met Microsoft cultural expectations and values."

  The guide states that if an employee does not meet all of these conditions, they are delivering slightly lower impact than expected or lower impact than expected.

• Exceptional Impact: "When an employee has: delivered sustained and meaningful higher impact by exceeding all expectations and demonstrated outstanding growth mindset by continuously taking personal accountability for setbacks, asking for feedback and applying learnings to have greater impact and consistently met Microsoft cultural expectations and values.

Managers are instructed to use the impact descriptors to describe employees' impact, such as "you delivered [successful/exceptional/lower/slightly lower] impact this past fiscal year when you…" Managers are instructed not to use impact descriptions as a rating or a label, such as "you received successful/exceptional/slight lower impact" nor should they use acronyms like LITE or SLITE.

The documents state the new ratings are intended to help managers determine impact and rewards and provide clear performance feedback to employees, and help employees better understand how their impact relates to their rewards. A Microsoft spokesperson said the ratings are not meant to be a rating or label for employees and are intended to create clarity and consistency. Managers can use the language as long as they tie to specific examples, the spokesperson said.

"Grounding in successful impact allows us to continue to reserve exceptional rewards for exceptional impact and be clear when there is lower impact than expected so lower rewards are not a surprise," one document states.

The new rating system comes after Microsoft froze salaries and cut budgets for bonuses and stock awards this year. The company told managers not to discuss that with employees during their performance reviews. Managers, Microsoft stated in a document viewed by Insider, 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."

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 (astewart@insider.com).