Sun Tells Poor Performers ? Improve or Else

April 16, 2001 ( - Sun Microsystems has toughened up its existing employee review process and for the first time will offer severance packages to employees who cannot - or choose not to - improve their performance.

Last month, the Palo Alto-based Sun informed employees that it had streamlined its “Performance Improvement Program,” which annually identifies 10% of its workforce as poor performers, according to CNET

Improve or Else

Under the revamped “Employee Improvement Program,” Sun managers will rank employees according to their abilities. The bottom 10% will then be offered a choice: improve performance, successfully fill another position inside Sun or accept a voluntary severance package and leave the company.

Those who try to improve will have 90 days to do so. If they don’t succeed, they will be given a severance package and told to leave.

The new program will be strictly enforced, with a forced ranking that puts 10% of the employees on notice. The company emphatically denies the program is a disguised plan for layoffs.

Managers will be subject to the same criteria.

Lower Attrition

Sun is also not filling positions opened by natural attrition and retirement, according to a company spokeswoman cited by CNET. About 1.5% of Sun’s employees depart each quarter on a voluntary basis, less than the 10% traditional annual attrition rate, as job opportunities evaporate.

In July 2000, the company had approximately 36,400 employees, a number that had grown to 42,400 by year-end. Total headcount is expected to be about 44,300 at the end of June.