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Microsoft was founded in 1975, and today Microsoft is the worldwide leader in software services & solutions. Microsoft consider his employees as intellectual fuel, so in order to retain them Microsoft benefit them with various benefit plans and resources Since the date of its corporation Microsoft was known for its employee-friendly HR practices. During the late 1990s when the company was growing enlarges in size; Microsoft lost the popular element of its work culture. Another issued that affects the Microsoft image and financial performance was racial discrimination lawsuits and anti-trust proceedings. The company started to cut off the employee's benefits to increase the profit margin in early year 2000, which result in employee de-motivation. In year 2006 CEO of Microsoft, appointed Lisa Brummel as the Senior Vice-president of Human Resource in order to boost the morale of Microsoft employees. Lisa Brummel after taking charge, she announced a plan to restore some of the existing Human resource management practices at Microsoft. She developed suitable systems to enhance the communication between human resource department and the employees. This plan was named 'My Microsoft' that makes changes in the company's performance review system. This plan includes designing new workplaces in an effort to attract and retain employees and other several new employee benefits,
Microsoft is considered as one of the most richest and successful companies in the world. If we look from human resource prospective, it is a fact that Microsoft is considered as employee-driven organization. If we considered other companies their main focus is on manufacturing techniques or better technology while in case of Microsoft success is based on the effectiveness of its employees, Microsoft value its employees and realize the importance of its staff.
"Michael A. Cusumano & Richard W. Selby (1995), 'Microsoft Secrets: How the World's Most Powerful Software Company Creates Technology, Shapes Markets and Manages People', Free Press ISBN 0â€684â€85531â€3"
Organizational culture is a combination of the values, beliefs, experiences and attitudes which make up the personality or shape of the organization as an entity. It could be defined as a specific set of norms and values that are generally shared by individuals and working groups within an organization, these influences will control the way in which the representative of an organization will interact with each other and with external stakeholders. The values and beliefs of an organization are a manifestation of the kinds of goal that its members should strive to meet, as well as ideas about the standard of behavior members should utilize in achieving these goals. From these organizational values will develop guidelines and expectations, prescribing the kinds of behavior deemed appropriate for employees to demonstrate in particular situations, thus guiding and controlling the interaction of all members of the organization. The effect of this will be to give an overall corporate "feel" to all internal and external interactions.
Corporate Culture in an Evolving Company:
Organizational culture can have a negative and positive effect upon a company, certain forms of corporate culture would definitely be seen as detrimental if adopted by members of the organization carte blanche, and other forms will be seen as entirely beneficial due to the high level of standards it would instill upon members of the organization. The top level management should be able to communicate properly with the new staff more effectively & efficiently regarding the regulation of the company. The culture of the organization should be included in the minds of the employees working within the organization
There are five basic types of organizational culture, they can be defined thus:
As the name implies, this form of culture is based upon fear and distrust. People will be unwilling to shoulder responsibility and will be very quick to place the blame upon others. The individual will be committed to themselves; loyalty is to the self, not the company. Innovation will be stifled in such a cultural climate; due to the fact people will be unwilling to take the risk of introducing new ideas.
A culture of this form will encourage very minimal inter-departmental interaction and cooperation. Loyalty will be to the individuals working group or department. Departments in turn will become segregated, often with a clique like nature, antagonistic in its approach to other departments. This almost confrontational interaction between departments is extremely detrimental to productivity and efficiency, as loyalty is to the individual and their immediate peer group.
Live and let live culture
The key word of this form of culture is complacency; this produces a very low output of creativity. The members of a live and let live culture have given up their passion for their work; they exhibit very little vision and are unwilling to stir themselves into any form of proactive advancement. Entities will cooperate, both on an individual and departmental level and the company will function, but it will seldom evolve new ideas and plans. Loyalty here is divided between the individual and their group. Individual and level of Group.
Brand Congruent Culture
Brand congruency is a form of organizational culture in which its members have a firm belief in the service or product of the organization. Individuals and working groups will feel good about the goals the organization is striving to achieve and will cooperate freely to help achieve them. People will work passionately, utilizing personal skills and knowledge to proactively solve problems. They may not always agree with the views and actions of the management team, but they accept them. Members of such a culture will place their loyalty at group level.
Example of Microsoft & IBM
We can easily understand the organization culture by comparing the two best know companies in the world (IBM & Microsoft).These two big companies escaped from every trap that make them dormant
Long away from now Microsoft was earning revenues in the tens of millions and was one of the best companies in the word. At that time IBM possess healthiest share of about 80% of the market share.IBM spent very huge amount of money and time in exploring the system soft ware. At that time it was thought that IBM will hold strong control in the market with the launch of operating system OS/2,but it did not happen. Because 80% of market was using their customized software
In 1980's Microsoft did the same thing. There was a problem with operating system OS/1 it takes too much memory and the memory was very expensive .Therefore this system OS/1 was not fully functional as it should have been..Bill gates took over a large share of the market by taking advantage of IBM weakness. But according to IBM employees they were doing everything right at that time, so IBM corporate culture did not allow IBM to make changes in the OS/2 operating system..IBM just tried to solve some minor problems, internal issues and goals.IBM programmers could not perform efficient programming to solve the memory problem, whereas Microsoft focused on getting the things done quickly and did not aim on the bureaucracy. Microsoft was ruling over the market by focusing on his customers. Meanwhile IBM was writing heavy programming which consumes a lot of memory and require very heavy hardware to run the computer which consumers could not afford at that time so they shifted towards Microsoft. Thus IBM was entangled with high bureaucracy and could not take advantage of market potetntial.IBM also had other drawbacks due to strong bureaucratic structure which results in delay customer services and production and so .At the end they re-organized their company and hire outsiders to run their business
In this case IBM was very overconfident leading to dangers of bureaucracy, goals, internal conflicts causing the company to lose its major share in the market. Initially it was in a position where no other company was in a position to compete with IBM, but due to lack of organizational culture.
Microsoft is a role organizational culture that reflects the way that a company should work, while IBM recovered into a large company, the late eighties to early nineties show the cost of falling into the trap of a very organizational culture.
Climate is defined as a presentation attitude and beliefs that portray in the organizations. Climates deals with intrapersonal perception form of beliefs, views and opinions of the staff and this idea is called work climate. Climate can be felt at the low level area and altering area. The culture and climate differences can be interchangeable as per transformation and efficient change in the organization.
Culture Vs climate:
Climate is more common assumption of culture where as culture is a comprehensive concept at different stages of examination.
Culture can be observed by the whole portion of an organization but whereas climate can be observed by only individual shared behavior, feelings and attitudes.
Culture comes under the region of anthropology but whereas climate comes under social psychology. Different tools and procedures are used to know about these theories.
Culture remain comparatively exclusive against normative and they feel that one set of assumptions are better or bad than others. Climate is regularly added normative commonly for nature and that are not same, but feel better for some definite things. Examine different types of climate and calculate the outcome against the other results such as improvement and growth.
Culture is more of qualitative type but whereas climate is more of quantitative type.
Leadership Enriched Culture
Within a leadership enriched culture, individuals will often feel the organization as a whole is an extension of them. They will be extremely well aligned with business goals, and will feel happy about their personal achievements within the organization. Often quoted as being a family, the organization as a whole will proved fulfillment to its members, whilst attempting to rise above ego and encourage people to support and nurture each other, thus producing the best results. Leadership of this culture will not develop followers, they will instead,
help to develop other leaders. IN this form of culture, everyone will be loyal to the organization and working actively towards common goals. The directors of the company must set up certain standards, rules & regulations for the new employees. It is very important for the company to identify and select those candidates who fits in with the Microsoft culture
"Stephen P Robbins & Nancy, 'Organizational behavior', 3rd edition"
Importance of Organizational Culture
The major reason of failure of so many efforts to improve the organizational effectiveness is that, whereas the techniques and tools may be present and the strategy to change is implement with vigor, most of the time failure occurs because the fundamental culture of the organization remains the same. In order to increase the effectiveness of the organization, change in the culture is the key.
Analysis of Microsoft Culture
Bill Gates was a brilliant technologist at the time when he cofounded the company Microsoft. With the passage of time as he guided it to greatness in both historical consequence and size, he took wrong steps. He threatened other newly companies with his temper and parcels out admire like Scrooge gave to charity. Microsoft is often considered as a company with aggressive culture. Microsoft and rivals companies are claiming antitrust lawsuits and disputes against each other.
People may use aggressive language in companies where aggressive culture is being followed. This aggressive culture is the main reason that put companies into new legal troubles before solving the old ones
Microsoft is known for having a policy of casual dressing code and giving its employees a huge amount of lee way in how they spend their day at Microsoft.
In an organization culture and climate should behave properly with the basic principles of responsibility, innovation, risk, rewards, leadership skill, decision making etc. culture mainly influences the whole organization depending on the factors like values attitude, language & regional.
"M Sill, 'Running Head: Microsoft Corporation', Jan 29, 2009"
Problem & its Analysis
Two years ago, when the prices of Microsoft stocks in a funk and Microsoft was launching its key product window Vista, bogged down in development, morale at Microsoft (MSFT) withered. In early 2000 seven employees of Microsoft filled a suit against the company for practicing racial discrimination in its employment practices, they also seeking a certificate as a class action on behalf of all the current and former Microsoft black employees. In 1998 the government also bought antitrust charges again the Microsoft. At that time barraged by negative media coverage, much of its inspired by Gates's own proud way of dealing, Gates' public image went from the Edison of his age to greedy robber baron who had whipped his company into a monopolistic frenzy.
At that time Microsoft needed a new Human Resource director and Chief Executive Steven Ballmer selected Lisa Brummel, who was currently working as a general manager of consumer productivity business at Microsoft. When she was hired as Human Resource Executive, she had no Human resource management experience. The major reason that justifies her selection was that she joined the Microsoft giant in the year 1989 and she could relate to employees because she grew up professionally at Microsoft. At that time Microsoft was facing problem of low stock prices and cutoff in employees benefits lead towards employee dissatisfaction & de-motivation Analysis of the benefit provided to the employees at Microsoft & recommendations are as under:
Reduction in employee's benefits
In early 2000, when Ballmer became the CEO of the company, the major challenge he faces at that time was motivating and retaining the employees at Microsoft. During the year 2000 the company profit reduces from US $ 9,421 million to US$ 5,355 million. In order to increase the profit the company decided to cut off some employee benefits less vacation time for new employees, a smaller discount for employees on the company stocks. According to the company this cutoff will leads to save US $ 60 Million a year.
The cutoff program didn't go off as planned by the company. Thousands of employees expressed their displeasure in cutting off their benefits and it became a public manner. Employees express an unusual display of dissent, and they strongly criticized the cutting off the benefits. However some of the employees showed their worry regarding the cutbacks are the sign things to come as Microsoft tries to reduce expenses in a broader effort to improve profit due to slow revenue growth. Majority of human resource criticize the Microsoft's planned benefits changes will likely to diminish its ability to recruit new employees. Senior vice president of compensation for salary.com says that it will put a huge impact on the current employees than on future employees or potential future employees. According to him for current employees it is a cutback and for prospective workers will just see it as a darn good total compensation package.
Another cutoff in expense was stop providing the towels to its employees. These towels were provided in the locker rooms adjacent to the garages of the Microsoft where the employees who cames to their office by cycle. The HR manager Anna thought it was a small change which wouldn't even be a blip. But this cutoff leads towards employee's irritation & employee mobbed blogs & message boards
Measures take up to resolve issues:
In the year 2005, Lisa Brummel, who joined as the chief of human resources at Microsoft, ,started reshaping the company's HR strategies. She began to change the HR system and tailored it to meet the needs of individual employees. Microsoft is one of the richest and most successful companies in the world. More importantly, Microsoft is an employee-oriented organization. From a human resource perspective Microsoft gives credit to his employees for his success while other companies base their success on better production techniques and better technology. In essence, Microsoft realized value of their employees and the importance of their employees.
Brummel made main four changes at Microsoft i.e. Communication with employees appraisal & Compensation system, employees benefits program, & workplace design.
Communication with employees
According to her employees had little communication with the HRM department. Brummel decided not to follow the usual human resource script, benchmark, practices & imposing them on the company. According to her if you go running of compaus then first you must know what is going on campus. For that she launched a listening tour holding town hall meetings at different locations.
Brummel started an internal blog to get the employees talking and she created a portal on the internet where employees could give suggestion regarding the shortcoming of Microsoft Human resource shortcoming. From the employees feedback she identified the area in which employees wanted change. Most of the employees wants the changes in the area of compensation & benefits program, performance appraisal,
In the may 2006, Brummel dubbed my Microsoft 1.0 and developed a new software that she hoped would keep pace with the changing workplace. According to her improved feedback would leads toward more improvements.
With the initiative of "my Microsoft" will help to attract, develop & retain great people having potential. The main feature of the 'my Microsoft' program would improve training for manager, increase child care and tuition benefits, clarify internal career paths. The new service provided at Redmond campus includes dry cleaning; convince stores, updated dining options grocery delivery.
"Lisa Brummel on Channel 9-She Reads Mini, January 26, 2006."
Performance Appraisal & compensation system
For employees human resource was a black box and she had to open it up and try to get employee input. Employee loathed the forced curve in their performance reviews. At Microsoft employees wants the clarity on compensation, they need direction how to get promoted and better managers
Microsoft also laid out efforts to help its employees to plan their careers and develop management talent. The existing performance appraisal & compensation system doles out bonuses and promotions based were largely on a controversial numerical rating scale. According to prevailing system number of employees who can receive a top score in the appraisal is fixed, and it often forces managers to give a lower score to an employee even though he or she have performed at the same level as a peer. Brummel replaced that numerical system that ranges from 2.5 to 5 with a "Commitment Rating" that was used to evaluate whether employees met, missed or exceeded their goals. A three-tiered ranking was introduced. According to three tiered ranking 20% of the employees are considered as "outstanding" 70% of the employees are considered as "strong" and 10% are to be " Limited".
She also changed the stock option plan so as to address the employees concern about their compensation system. She increased the budget for the stock optioned to 15 percent.
"Todd Bishop, Microsoft Unveils New Worker Perks, May 19, 2006."
Brummel took initiated to make the Microsoft employees benefits more attractive. Most of the changes made by her were based on the feedback provided by the employees of Microsoft. She introduce the Mobile Medicine. According to this benefit the company sent the doctor to the employee house in case of medical emergency. Increase child care and tuition benefits, clarify internal career paths. The new service provided at Redmond campus includes dry cleaning; convince stores, updated dining options grocery delivery & restoring free towel service which the Microsoft ended in year 2004. In year 2007 a transportation service was launched to took employees from their houses to the Microsoft offices.
In September 2007, Brummel change the office design and introduces an innovative design. The new design includes sliding doors, modular furniture and moveable walls. The new workplace was customized according to the specific needs of the employee. This imitative was taken to foster face to face collaboration.
Employees are categories into four workers types. That includes providers, travelers, concentrators and orchestrators. These designs were made according to the specific needs to each of the groups.
An effective Human Resource department in any organization not only acts as a business partner of the farm, but it also guilds in shaping the business strategy of the Company. The human Resource strategies have been intertwined at Microsoft and it enabled the company to run with the common goals and vision to make money for their employees and for its investors. The results of the company clearly disclosed the company's investment done for its employees and how well the human resource Manager Brummel has been able to align the work culture to the Microsoft strategy.
The resent changes made by Human Resource department at Microsoft, indicates a move that could change the way the company is looked at. The result of such activities can only be seen at the time when the economy is back to upward motion. However, for a time being, all those changes in practices and principles that the company stands by can acknowledge and admired in a true earnest.