Human Resource Can Affect The Profit And Standard Of The Organization Business Essay

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Human resource management is the most significant and extremely desirable department in the organization then it is most important part of the operational strategy. Human resource can affect the profit and standard of the organization directly and it can make organizational strategy as successful or failure. This literature review proposal I am going to discuss about human resource management in Microsoft Corporation. Microsoft is the employee driven organization, it success is based on the human resource management while other organization successes are based on their manufacturing techniques or better technology. In Microsoft corporation human resource department is playing vital role in the organizational strategy. Microsoft human resource management is having different types of operations like recruitment and selection - in beginning, recruitment and selection - in later stages, employee satisfaction and loyalty, employee motivation, employee rewards.

Research questions

Why organization needs human resource management?

How human resource management will affect the organizational strategy or goals?

How human resource management will affect the result of the organization?

Human resource department is how much important in an organization?

What are the qualities of successful human resource management?

How Microsoft human resource management is different from other organization's human resource management?

How Microsoft recruiting the employees and how they are retaining employees in long term?

How Microsoft managing their employees?

How Microsoft valued employees?

Research objectives

To get information on human resource practices at Microsoft

To analyses the effectiveness of the human resource practices at Microsoft

To analyses the recruitment strategies in Microsoft

To get information about employee rewards program in Microsoft

To get information about Microsoft employee motivation employee motivation program

To get information about Microsoft employee loyalty program

To analyses reshaping Microsoft hr agenda

Purpose of research in human resource management

Human resource management is the most important department in an organization. It can improve the growth of organization. The purpose of research is to obtain the operations, roles and responsibilities of the human resource management. Because Microsoft is the wealthiest employee driven organisation and it is top most IT organization in the world. In Microsoft human resource management is the most important factor for organizational growth. My research will be useful for small scale organisations or developing organisations. They can follow these HRM strategies and operations for their organisational growth and organisational goals achievements.

Scope of the research

Aim of this research is to critically review the human resource management in Microsoft Corporation. Analyzing the strength and weakness of the human resource management in Microsoft. To analyze how Microsoft is the top most employee driven organisation in the world. To analyze how human resource management functions affect the performance of the business. Data collection for this research is secondary data collection and the data will be collected from the internet.

Literature review


Research method has two types of approaches. These are deductive approach and inductive approach. Deductive approach involves the development of a theory. It is the dominant approach in the natural sciences. It is testing the theory. It is the basic of explanation. It is a highly structured methodology. It is the collection of quantitative data. Inductive approach building the theory. In this approach we need to collect information from the corresponding person through interviews and surveys. It is gaining an understanding of the meanings humans attach to events. It is the collection of qualitative data. My research is based on the deductive methodology. Data collection of this research is quantitative.


Brainstorming is a technique for helping to develop research question and it helps to generate keywords for research search. My research topic is human resource management in Microsoft Corporation. According to brainstorming I have collected some key words like, management, human resource, information, management strategy, Microsoft information.

Relevance tree

It provides a useful method of bringing some form of structure to literature review and guiding research process. This is hierarchical graph like arrangements and includes headings, sub heading. Figure 1 shows the hierarchical representation for the research topic human resource management at Microsoft.


Human resource management

Human resource management is the system that encourages, motivates, strengthens, and attracts employees. These employees are responsible for the organizations successful functioning and survival of the organization. The main functions and components of the human resource management are recruitment, Retention, Disciplinary procedures, Grievance procedures, Absenteeism, Motivation, and incentives, Persons specifications, Job descriptions, Work place culture, Teams, Contract of employment, Functions, Health and safety in the work place, Authority and accountability.


In recruitment process is used to match the most appropriate resources according to the job needs.


Disciplinary procedures

Human resource needs to maintain some set of disciplinary procedures for work place. These procedures may vary depends on the organization. Disciplinary procedure makes work environment more discipline and perfect.

Job descriptions

HRM is responsible for job description to each employee. According to the job description they are recruiting peoples. They will describe the job position to the recruited candidates.


HRM monitoring the employee attendance. They are maintaining time sheets and other technology for monitoring employee attendance. If the employee in absence they need to replace some other person to that work. If the absenteeism is more the work will be affected according to that they need to give days off to the employees. This is the important factor they should monitor in the organisation


To motivate employees each organisation has some programs or some techniques. They may use some theories for motivation. If the employee is motivated only they can give effort to their job and organisational goals. Giving good work environment, giving some self relaxation programs, giving rewards to their work, conducting some interaction programs within the employees these are some examples for employee motivation.


According to the employees year of experience human resource department allocate incentives. Some organisation have yearly salary increment, some organisations have six months' salary increment. Employees are doing over time work they need to give incentives for that.

Work place culture

One organisation's work place culture is fully depends on the human resource department. Different organisations have different work place culture. Employees' activities are different for different work place culture. This is known as organisational or corporate culture and it is the organisation's system of values and processes. It is the very powerful tool for every organisation. It has four types like, best your company culture this is slow feedback and high risk, work hard play hard culture this is fast feedback and low risk, tough guy macho culture this is fast feedback and high risk, process culture this is slow feedback and low risk.

Contract of employee

Most of the organisations make contract with employees; this contract will be one year or two years like that. Employment contract is beneficial for the organisation because they do not want to spend money for employee selection within that contract period. Most of the company makes set of rules and conditions for the contract form.

Health and safety in work place

This is the aspect of human resource management. They need to identify hazards and risks within work process and they need to take some actions to reduce or remove those risks from the working process. Health and safety laws are more important for industrials.

Authority and accountability

Human resource department is the authority for employee salary. They are the accountant and authority person in the organisation.

HRM Theories and Models

Human resource management theories are fit or contingency theory, guest theory, Harvard model, matching model, Harvard frame work, and linear strategic model

Fit or contingency theory

Theory provides the frame work for selection, reward, appraisal and development can be mutually geared to produce the required employee performance. It is simplistic response to the organization, dependence on a rational strategy formulation, has one way organizational strategy relationship, and has unitarist assumptions.

Guest theory

It is the perspective model based on human resource policy goals like strategic integration, flexibility, quality and commitment.

Harvard model

This is analytic rather than perspective, recognizing various stakeholder interests impacting on employee behavior and performance. It has potential for international or comparative analysis, places greater emphasis on environmental factors that shape HR strategic choices.

Matching model

It showed that organization and HR systems managing way is congruent with organizational strategy. According to matching model HRM has four generic processes like, selection, reward, appraisal and development.

Harvard framework

This framework is based on the belief that the problems of historical personnel management can only be solved. In this general managers develop the view points for how the employees can involved in the development of organizational goals. This model also having four policy goals like, strategic integration, flexibility, high quality and high commitment.

Linear strategic model

According to linear strategic model "Human resource policies should be integrated with strategic business planning and used to reinforce an appropriate organizational culture, that human resources are valuable and source of competitive advantage that they may be tapped most effectively by mutually consistent policies that promote commitment and which as a consequence foster to willingness in employees to act flexibly in the interest of the adaptive organization's pursuit of excellence".

Analysis of human resource management in Microsoft

Microsoft human resource management having different types of operations. Microsoft mainly focusing the employees than technology. HRM operations in Microsoft like, recruitment and selection in the beginning stage, recruitment and selection in the later stage, employee satisfaction and loyalty, employee motivation, employee rewards.

Recruitment and selection- beginning stage

Microsoft founder of Bill gates is the driving force to the organization from the beginning. He preferred to hire extremely intelligent people compared than experienced people. They are recruited new college graduates from some particular universities. While the beginning of the Microsoft Bill Gates and his co founder Paul Allen recruited known brightest people. They are their smart friends. From the beginning of Microsoft Bill Gates realized that the employees are the greatest asset in the organization. Bill Gates quotes about this like, "it's effectiveness of our development that determines our success and takes our 20 best people away from Microsoft, and I will tell you that Microsoft will become an unimportant company" (BillGates).

Microsoft has smart and most driven employee in their organization. Its recruitment strategies are different from other organizations and it reflects their philosophy. In beginning of the recruitment strategy they are recruiting graduates from elite educational institute such as Yale, Harvard, MIT, Stanford and Carnegie-Melon. Recruiters of the Microsoft visit the universities and choose extremely brilliant and most driven candidates from the universities. They preferred fresh candidate without work experience. The selected candidates had to undergo through the selection process. In selection process Microsoft was conducting interviews for 3 stages or it may up to 10 stages by the Microsoft employers. These interviews are not testing their knowledge it was only for the selection. To test their knowledge Microsoft conducting thought processes like problem solving abilities, and work habits. Second stage is the technical interview in that interviewer created problem scenarios and they focused how the candidates are solving the problems. Sometimes interviewers asked unrelated questions also these are not related to the technical skills like, "how many times the person using 'the' word in a day and describe the perfect TV remote control". In interviewing process the interviewee pushed their limits and interviewer checked whether interviewee thrived and survived that situation depends on that they can survive Microsoft work environment also. After finishing this interview the interviewer send mail to the candidate they have been hire or no hire and they comment the reason for the rejection.

After these stages the interviewee would meet the manager and this manager would make decision for hire or no hire. But all interviewers are expecting the interviewee would meet the manager. Microsoft following the 'n minus 1' strategy for recruiting people. This means, "Right peoples are recruited by the team, less peoples are employed than required people. This policy reinforces that hiring the right people is more important than just hiring the people to fill the positions"

Recruitment and selection - later stage

In later stage of recruitment Microsoft recruit experienced people who are more suitable for the organization. Sometimes Microsoft focusing the other company employers if some companies are downsizing the organization Microsoft try to recruit those employees. One example with AOL, AOL downsize the Netscape operation in valley, Microsoft assembled the team and found talented employees from AOL.

Employee motivation

To motivate the employees, the organization should understand what motivates each of them. The important thing about Microsoft is that they are recruiting the people who specifically will be motivated by the environment. They do not focus skilled people and they do not expect skilled people to be motivated. They recruit intelligent and driven people and give them the environment to develop themselves. This type of activities the employee will be motivated themselves by the environment. Microsoft has good relation with employees so that it can motivate employees. This relationship is important for motivating the employees. That's why Microsoft is the top most organization in the world. Journal of Applied psychology said that, "employees working project more efficient when their goals related to the team goals rather than individual goals (Kristof-Brown)". Microsoft ensures that the goal of the organization should be understand and make awareness to the employees. Motivation can be described as employees satisfied with work environment and they will provide effort for organizational objectives. Microsoft achieved employee motivation by implementing set of goals in the human resource management programs.

Maslow's needs theory can explain the employee motivation. Needs theory describes employee motivation as a self-actualization. The person feels self fulfilled he will be motivated by himself. Microsoft provides opportunities for growth, creative, achievements and advancements to their employees in work environment. Microsoft hiring intelligent and self-actualization people and they provide greater opportunity for achievements.

Employee satisfaction and loyalty

From the beginning Microsoft gathering information about the employees needs. Most of the employees are just come out from the college. So Microsoft working likes campus to employees. It making more comfortable environment to the employees and it is making more familiar and sense of social belonging work environment to the employees. This environment giving own office for each employees they can decorate themselves and provision of subsidized food and drink. Employee satisfaction also the opportunity for the organisation growth and they are encouraged to switch jobs themselves and they are providing horizontal transfers also. Microsoft is empowering employees this is new thing compared than other organisation.

Job satisfaction affected by the three aspects of tasks these are job complexity, degree of physical strain and perceived value of the task. Microsoft manages these aspects by providing high complexity, high achievers and high for perceived value. This high perceived value is handled by high achieving culture.

Employee rewards

This is the optional driven engine. Microsoft follows to analyse individual performance, semi-annual performance and formal review system. Formal review system is used for the manger evaluation. Depends on the formal review system employees evaluating themselves then this evaluation result will be sent to the manager and manager evaluating these result then they arrange some meeting to discuss and review about the evaluation. Depends on these performance review and formal review system organisation provides rewards to the employees such as salary increment, bonus awards, and stock options. Who all are consider for long term asset of the company they are giving stock options to them. Giving high reward to high performance with the focus on a partnership. There are two reward paths are available, one is technical path this is for those peoples are following the technical skill. Another one is management path this is for those peoples are following the management path. Employees' skills are divided in to three parts these are conceptual skills, technical skills and human skills. One moves up to corporate ladder they required more conceptual skills and less technical skills.

Microsoft valuing technical skills rather than conceptual skills because due to the nature of the product. However Microsoft offers two advancement paths for employees those are having good technical skills it allows them to grow as a technical experts and those are having good conceptual skills it allows them to grow as a manager. Reward system is the important part of the organisation. Both set of skills are valued by Microsoft. This is indicates the Microsoft consistency in the business world.

HR strategy at Microsoft

Microsoft Corporation following three human resource strategies, first one is performance culture model and other one is succession plan usage the third type is succession planning indicator. These two approaches are used for its organisational success. Growth pyramid used for categorise and measure all the critical people metrics. To analyse performance culture strategy Microsoft made amount of investment for internal and external surveys. Succession plan usage strategy is designed to assess the quality of the previous year succession plan. According to this strategy they can identify whose leadership is better for organisational growth. Succession planning indicator used to measure the position of the organisation.


Strategic HR

Reactive HR


Elements of effective HR strategy

Effective elements of HR strategy at Microsoft are organisational strategy, HR strategy, HR functions. Organisational strategy is having vision, mission, competitive advantages, external assessments, internal assessments, objectives, initiatives, and goals. Human resource strategy is having practices to attract, motivate and retain employees to achieve goals, strategic integration, employee commitment, workforce flexibility, quality of goods and services. An hr function is having practices to ensure compliance and efficiency goals, related and aligned efforts organised to produce intended results.

Reshaping HR Agenda

Lisa Brummel, who is the HR director of Microsoft in 2005, started the process of reshaping HR department at Microsoft. Because of two reasons they reshaping the hr agenda first was the company stock price was slipping due to the development problems with the product of windows vista operating system. Second reason was because of the high competitors like Google and yahoo, Microsoft does not want to slow down their growth. As an hr director Lisa started to collect up trend information about the organisation, so she started surveying 80,000 global employees of Microsoft. This survey collected work culture, employee skills and competencies. She mapped and forecasted this information with next few years. According to this some changes had made in the organisation. They reduce labour cost and they downsizing the organisation 10%. They reduce the part time and temporary employees but they give importance for full time employees. Microsoft moved 30% of vendors of owned location and that not be renewing its leases in worldwide over 70 locations.

Microsoft Dynamic AX- HRM

According to this new technology of dynamic AX, Microsoft is providing ERP software to automate human resource functions. Microsoft introduced this dynamic AX on 2009. It is automating the following functions of the HRM

Employees data are shared between the companies by this technology

It gives ability to track and report on illness and injury incidents

Support for employees self service goal settings

Ability to track and manage employee benefits

Ability to manage contingent staffing and sourcing

Employee recruiting process.

Payroll process

Accurate and easy payroll tax verification with an integrated tax engine.

HRM theories in Microsoft

To improve HRM functions and strategies Microsoft is following matching model for their organisation and to motivate employees they are using Maslow's needs theory.

Difference between HRM at Microsoft and other organisation

Microsoft work environment and work place culture is different from other organisation and it provides comfortable, self motivated own office for employees. Whereas other organisations do not provide these type of facilities to the employees. Microsoft mostly focusing on fresh graduates they were just come out from the universities and it recruited self motivated and self actualization people. Then it is following n minus 1 policy for recruitment they do not want to just fill the positions they want less number of intelligent employee to achieve their organisational goals. These are all the things Microsoft differs from the other organisations.

Previous research strengths and weakness

Pervious research about human resource management in Microsoft was showing secondary data collection. It was not used primary data. But this research report is giving information about human resource management strategy in Microsoft. It was not discussed in depth of research topic.

Microsoft HRM justification and recommendation

Microsoft is the good employee driven organisation in the world. Human resource department is the important part of the organisational strategy achievement and organisational growth. Microsoft HRM mainly focuses the employee satisfaction and employee motivation, now a days Microsoft using ERP software for some HRM activities. But Microsoft recruitments mainly fresh employee for their organisation they not focusing experienced peoples this is one of the drawbacks of Microsoft. Some situation the organisation needs more experienced people for it growth. They can focus the experienced people also for their recruitment.

Recommendation for further research

In this research I am going to use only secondary data like books, internet, journals, and news papers. In future research they can use primary data collection like interviews, surveys, company reports, conference proceedings, emails etc. Then they can also do specifically research in changes of HRM in Microsoft.


HR department is not only the partner of the organisation it is reshaping the organisational goals and growth. Microsoft had spent lot of investment for the employee, so HR managers built the work culture very well. In recession time also Microsoft can survive because of the human resource management. Microsoft is the best organisation for human resource management.