Performance reviews are supposed to be about fairness, feedback, and growth. But when companies impose low-performer quotas, managers can find themselves caught in a no-win situation that leads to awkward “egg-on-the-face” moments, says Stefan Mai, a startup founder and former senior engineering manager at Meta.
Mai, who also worked as a software development manager at Amazon, shared his experiences on The Peterman Pod. He described how forced quotas where managers must label a set percentage of their team as underperformers can backfire, especially when a manager genuinely believes their team is operating at a high level.
The Problem With Low-Performer Quotas
Low-performer quotas are intended to raise standards. Companies like Meta and Amazon have used them to:
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Push managers to expect excellence from all employees.
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Identify stragglers who may need extra support or accountability.
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Enforce stricter performance standards in large organizations.
But Mai points out the dark side: what happens when a manager has been praising their team for months only to be told someone must be placed in the “low bucket.”
“You’ve got to go change your tack,” Mai explained. “Those egg-on-the-face moments are what most managers are afraid of. They try their damnedest to prevent those situations.”
The result? Employees blindsided with negative reviews, managers forced into credibility-damaging reversals, and workplace morale taking a hit.
Meta, Amazon, and Microsoft: Different Approaches
Performance reviews aren’t just about growth anymore they can be a precursor to job cuts.
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Meta: In 2023, the company laid off about 3,600 employees (5% of its workforce), many of whom had been classified as “low performers.” Internal memos later instructed managers of large teams (150+) to put 15–20% of employees in the bottom tier. CEO Mark Zuckerberg was blunt: he wanted to “raise the bar on performance management” and move underperformers out faster.
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Microsoft: The company has experimented with a different approach: rather than forcing quotas, it reportedly offered payouts to underperforming employees so they could exit voluntarily.
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Amazon: A spokesperson, Sam Stephenson, defended the company’s process, saying most employees meet or exceed expectations. For those who don’t, Amazon provides coaching and improvement opportunities but if performance doesn’t improve, separation is on the table.
The Human Cost
For Mai, the real challenge isn’t the existence of performance management systems it’s how they’re communicated.
“A good manager should be able to message it appropriately,” he said. “That way they’re not surprised, you’re not surprised. The structure works fairly.”
But in reality, many managers are inexperienced or “immature,” as Mai put it. That’s when the fallout becomes devastating:
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Employees feel blindsided by sudden “underperformer” labels.
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Managers lose trust because their words don’t match their actions.
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The process feels less like growth and more like corporate culling.
“People have to go ‘mea culpa’ with their reports,” Mai added. “For everyone involved especially the person receiving that news it can be devastating. It’s pretty bad.”
Why Companies Use Quotas Anyway
So why do major tech companies keep using low-performer quotas? A few reasons:
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Consistency at scale: Large organizations need structured systems to identify performance gaps across thousands of employees.
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Legal cover: By setting measurable expectations, companies protect themselves from accusations of arbitrary or biased firings.
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Cultural signaling: Leaders want to show Wall Street and investors that they’re cutting costs and “raising the bar.”
But the risks are equally clear: damaged trust, weakened team morale, and the potential loss of talent wrongly labeled as low-performing.
A Balancing Act for the Future
As layoffs and efficiency pushes continue across tech, performance management systems will only grow more important and more controversial.
Mai believes the key lies in manager maturity and communication. If managers are equipped to give honest, continuous feedback, then formal reviews won’t come as a shock. But when communication fails, quotas turn review season into a credibility crisis.
For employees, that can mean the difference between constructive coaching and a career setback they never saw coming.
