Inside Amazon’s new performance review system: Stricter standards, and what it means for employees

Under the new system, originally reported by Eugene Kim at Business Insider, managers will now use a three-tiered scale that includes an assessment of how effectively employees demonstrate these principles—such as customer obsession and frugality—alongside traditional measures of performance and potential. These three factors combine into an Overall Value (OV) score that influences raises, promotions, and the possibility of being placed on a performance improvement plan.

Key aspects of the new process include:

• Only 5% of employees will be eligible for the top “role model” grade for LP behavior.
• The rating scales for “performance” and “potential” have been streamlined for greater clarity and consistency.
• The process is intended to “improve our ability to identify top talent and further strengthen our culture,” according to internal guidelines.

This move is part of CEO Andy Jassy’s broader push for a more disciplined and cohesive workforce, writes Fortune‘s Jason Del Rey. Over the past year, Jassy has also enforced a strict return-to-office mandate, reduced management layers, and updated pay models to reward high performers. He has emphasized that Amazon’s unique culture—rooted in its Leadership Principles—drives innovation and customer value.

However, these changes have not been without controversy. Employees have voiced concerns about limited oversight and the potential for misuse of the evaluation system, with some describing it as “predatory and opaque.” Amazon’s approach, which involves categorizing employees into five performance tiers and setting fixed percentages for each, has drawn criticism for fostering a cutthroat, stack-ranking culture reminiscent of other tech giants.

Demanding environment

The broader context, as previously reported by Fortune, highlights that these cultural and performance management shifts are occurring amid ongoing employee dissatisfaction. Many Amazon workers have complained about the return-to-office mandate and the company’s demanding work culture, which some say prioritizes metrics and discipline over employee well-being. Despite these complaints, Jassy and Amazon leadership remain committed to reinforcing the company’s core values and maintaining high standards, even as the tech industry at large rethinks how it manages and rewards talent.

In summary, Amazon’s revamped performance review system formalizes its Leadership Principles as a key metric, aiming to create a more disciplined and high-performing workforce. While intended to strengthen culture and reward top talent, the changes could intensify concerns about transparency, fairness, and the company’s demanding environment.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.