Meta is altering its bonus system and moving back to a twice-yearly performance review process as it overhauls its structure and operations amid what CEO Mark Zuckerberg earlier declared is a “year of efficiency.”
The changes to the bonus system at the company, formerly known at Facebook, will see employees who get a lower performance rating of “met most expectations” paid less in a bonus grant of restricted stock, according to two people familiar with the company. Meta is known to be generous with bonus or refresher grants of stock to employees, with higher performers able to receive double or triple the value of their base salary in RSU grants.
While those who receive a “met most” expectations rating during their review will still receive a bonus payout, the maximum will now be 65% of their base pay, the people familiar said. Previously it was 85%. The bonus payout for higher performing employees is staying the same, one of the people familiar said.
According to a memo on the change first reported by The Wall Street Journal, Meta said altering the bonus payouts for some workers is “significant” and that it “might disappoint some people.” However, “it aligns with our continued focus on maintaining a high-performance culture,” the memo read, per the Journal.
Since last year, Meta has been increasing performance pressure on workers, and people leading teams have been directed to increase the number of employees put into lower-performing categories, as Insider reported. The company last November conducted its first mass layoff, letting go of 11,000 workers. A second round of layoffs is coming this year, with about 10,000 employees to be let go in a staggered layoff process. Tech and engineering employees will be laid off in April, likely mid-month, while business departments will be hit in May, also mid-month, the two people familiar with the company said.
“This is a hunger games situation,” a current Meta employee told Insider. “If you survive layoffs, you’ll be straight into performance review in June,” the employee said.
Although Meta has long had bi-annual performance reviews, the company memo as reported by WSJ said the upcoming review in June is “a calibrated performance signal for fairness.” It will include a three-point grading system that assesses if an employee is performing significantly above, at or above, or below expectations.
“We’re making changes to our performance process taking into account learnings and feedback over the last year while optimizing for the future,” a Meta spokesperson said in a statement to Insider. “These changes are not related to workforce restructuring.”