Meta’s recent decision to cut 5% of its workforce by targeting “low performers” has sparked significant debate. While such measures are controversial, they highlight the company’s commitment to fostering a high-performance culture and aligning its workforce with strategic priorities, such as artificial intelligence and next-generation computing platforms. Startups, in particular, can glean important lessons from Meta’s approach, albeit with thoughtful adaptation to their context.
Meta’s Employee Rating System
The foundation of Meta’s performance management lies in a structured review system that assigns employees one of seven ratings:
- Too New to Evaluate (N/A)
- Meets Some (approximately 2% of employees)
- Meets Most (about 8%)
- Meets All (around 45%)
- Exceeds (approximately 35%)
- Greatly Exceeds (about 7%)
- Redefines Expectations (approximately 3%)
Employees receiving “Meets Some” ratings are typically placed on a Performance Improvement Plan (PIP), which outlines specific areas for improvement. Consecutive “Meets Most” ratings can also lead to a PIP, particularly if the performance does not align with team objectives. Historically, Meta allowed underperforming employees up to a year to improve, but the company has recently accelerated this process, with affected employees being notified as early as February 10, 2025.
Lessons for Startups
- Establishing Clear Performance Metrics
Meta’s rating system provides a transparent framework for evaluating performance. Startups, though operating with fewer resources, can implement simplified versions of such metrics to ensure that employees clearly understand what is expected of them. - Proactive Management of Underperformance
Startups should consider adopting scaled-down Performance Improvement Plans to address performance issues early. Unlike Meta’s more immediate approach, startups might emphasize coaching and longer improvement cycles to nurture talent. - Aligning Talent with Strategy
Meta’s focus on performance is closely tied to its strategic priorities in AI and computing. Similarly, startups can design performance reviews to ensure employees are aligned with their growth objectives, such as product development or market expansion.
Meta’s Compensation and Benefits Compared to Competitors
Meta remains one of the most sought-after employers in tech, offering competitive compensation packages that rival those of Google, Apple, and Microsoft.
- Base Salary
Meta’s average base salary for software engineers ranges between $150,000 and $175,000 annually, which is slightly higher than Google’s ($145,000–$165,000) and Apple’s ($140,000–$160,000). - Equity Compensation
Meta’s equity offerings, often in the form of Restricted Stock Units (RSUs), are substantial, with four-year vesting schedules. For startups, equity can be a strategic tool to attract talent while conserving cash. - Benefits
Meta provides a robust benefits package, including comprehensive health insurance, wellness programs, free meals, and fitness allowances. Its family-focused policies, such as generous parental leave and family planning support, are often industry-leading. Google and Microsoft offer similar benefits, but Meta’s focus on wellness and career development is particularly pronounced. - Work Flexibility
Post-pandemic, Meta has embraced a hybrid work model, but its intense focus on productivity creates a demanding work environment. Competitors like Google and Microsoft are perceived as promoting better work-life balance.
Strategic Takeaways for Startups
While startups cannot replicate Meta’s compensation levels, they can compete by offering meaningful equity stakes, flexibility, and a collaborative culture that prioritizes growth and innovation. Clear performance metrics, coupled with supportive management, can help startups establish high standards without creating undue pressure.
Meta’s controversial system underscores the importance of aligning talent strategies with organizational goals. For startups, the lesson is clear: clarity in expectations and a strategic focus on performance are critical, but these must be balanced with a supportive and engaging work environment to drive long-term success.
