Xero also promises stronger annual salary outcomes to high-performing employees
Xero Australia has introduced a new voluntary severance package to underperforming employees as part of its efforts to improve performance in the wake of the "SaaSpocalypse."
The Opt Out Program, introduced in June, is being offered to underperforming employees as an alternative to a 30-day performance improvement plan.
"As per the performance process, the Opt Out Program will be offered to 100 per cent of the Below Expectation cohort, as an alternative to the 30-day Performance Improvement Plan (PIP)," said Xero chief executive Sukhinder Singh Cassidy in a Slack message quoted by Forbes Australia.
Performance of Xero employees is classified into five sections: Exceptional, Strong, Good, Moderate, and Below Expectation.
In addition to employees ranked at Below Expectation, the Opt Out Program is also being offered to employees who are rated "Moderate" for two annual reviews in a row.
"As AI changes how work gets done, we have the chance to redefine how small business finance works," Singh Cassidy said as quoted by Forbes Australia.
"To capture that opportunity, we need to keep raising the bar on the customer impact we deliver, and how we execute internally."
Performance management at Xero
The Opt Out Program is just one of the company's efforts to manage performance within Xero.
According to Singh Cassidy, employees rated "Exceptional" and "Strong" will also receive stronger annual salary review outcomes and additional equity grants as a bonus.
"We've spent the last 2-plus years talking about the need to build a high performance culture alongside our purpose and passion, and putting in place the frameworks and reward systems to do so," Singh Cassidy wrote. "And when I say we, I mean all of us."
Xero confirmed the policy to Forbes Australia saying it has "ongoing performance and development conversations" with its people.
"We recognise strong performance, we support people who need it, and we treat everyone with care and respect," the Xero spokesperson told the news outlet.
Xero's performance management efforts come as the software firm gets hit hard by the SaaSpocalypse, a period of market panic in which the rollout of new artificial intelligence tools triggered a sell-off in traditional software-as-a-service stocks. According to the Australian Financial Review, its share price plummeted by around 60% over the past year, wiping $14 billion off the company’s market capitalisation.
