Tencent rolls out simplified employee rating system amid job cuts, other cost-saving measures

The WeChat owner is simplifying its performance review system to a three-tiered ranking system and reducing the feedback process from twice to once per year
Tencent has been introducing a number of new cost-saving measures and reducing headcount since first-quarter profit halved from 2021

Tencent

Iris Dengin Shenzhen

Published: 7:00pm, 10 Jun, 2022

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Chinese tech giant Tencent Holdings is simplifying its performance review system for employees in an overhaul of personnel policies as the company’s seeks to cut costs and improve efficiency amid stagnating growth.

The Shenzhen-based operator of WeChat is moving away from a five-star rating system in favour of a simpler assessment system based on three rankings: outstanding, good and underperforming. Tencent unveiled the new system in an internal letter sent out on Thursday. An employee at the company confirmed the details of the letter.

The previously biannual employee and manager feedback process is also being reduced to just once per year, according to the letter.

Tencent makes it harder for employees to get pay rises

Promotion of employees from levels nine to 11, consisting mostly of senior engineers, will be decided by their own department heads, and the company is encouraging management to use a simpler assessment process. Employees ranked level 12 or above, usually management and core technical talent, will be nominated by their departments for promotion rather than submitting their own applications.

The changes in the personnel policies were first reported by Chinese media outlet Latepost on Thursday. Tencent declined to comment on the report.

The new adjustments come a week after the company slowed the pace of pay rises after promotion. Promoted personnel are no longer entitled to an “immediate” salary increase, Tencent told workers in another internal memo sent out on June 2. The salary review process was also pushed back a month, from June to July, so that it could integrate with employee performance assessments.

The new policy is part of Tencent’s efforts to improve management efficiency as it downsizes its workforce to cut costs after its first-quarter profit halved from a year ago. The latest changes join other cost-saving measures, including job cuts across multiple business units such as cloud computing and video content. Tencent also laid off about 100 people from its sports channels.

China’s tech crackdown fans unemployment worries

As recently as March, Tencent’s total headcount was 116,200, up 3.1 per cent over December. The latest round of job cuts is expected to be reflected in the second-quarter earnings report.

In March, Tencent president Martin Lau Chi-ping said the company would exit or streamline some noncore businesses to control headcount, a point founder and CEO Pony Ma Huateng reiterated in an earnings call last month.

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