Managing the Human Resource in Microsoft

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The history of Microsoft is not very long, just founded in 1975 but today it is one of the renowned companies in the world providing quality 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 birth of Microsoft Corporation ,Microsoft got worldwide fame due to employee friendly practices of Human resource department. But Microsoft lost some elements of its popular culture during 1990's when company was focusing on its growth and forgot his employees. Another issued that affects the Microsoft image and financial performance was due to anti-trust and racial law suits against Microsoft. 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. Lisa Brummel was selected as senior Vice-president of Human Resource by CEO of Microsoft in the year 2006 to boost up the spirits of Microsoft staff. Lisa brummel after taking charge decided to improve the damaged image of Microsoft. Therefore she announced some new HRM practices while at the same time keeping some old HRM practices too.

The suitable systems were developed by her to fill up the gap between employees and the HRM department.. This plan was named 'My Microsoft' that makes changes in the company's performance review system. She decided to make changes in the Microsoft environment to boost up the morale of current employees and at the same time attract new employees. Therefore she announced new employee benefits plans which were warmly welcomed her employees

The development in the Microsoft is solely due to his talented employees that made him one of recognized companies in the world. If we compare other companies in the world we found Microsoft different from other companies as other companies depend on latest technologies and look for new manufacturing techniques, while it is the employees of Microsoft who make him distinguished in the world by offering latest user friendly software for their customers. Due to these facts Microsoft has also began to give importance and value to his employees because Microsoft also know he is nothing without his employees

"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 0‐684‐85531‐3"

1.1Microsoft traditional Organization Culture

Microsoft's strategic development, and, consequently, its growth and scope have taken their cue from its culture. Despite its substantial growth, then, Microsoft's organization has remained competitive, fiercely loyal and dynamic because its employees-at corporate and in the field-are imbued with its cultural values. Of course, Microsoft's reading of market realities and opportunities have fostered its strategic growth. But, like other companies, Microsoft's interpretation of the market does not occur in cultural vacuum

A company's culture forms its interpretive context and guides its decision making. And, while strategic market and organizational change molds a company and refines its culture over time, Microsoft modus operandi remained consistent with its cultural values.

Microsoft is product-centric and an increasingly customer-focused, partner driven company. The company sells software products, not implementation services or PCs or servers. Microsoft culture has, by the age, remained constant and unchallenged because of its unprecedented success and growth, which both mirrors and reinforces. Microsoft culture itself. A cultural value of Microsoft is to preserve its culture


Corporate Culture in Microsoft Company:

Microsoft's culture has developed around the tension and complementarily of two internal forces: the corporate organization and field organization. The field, of course, refers to all other Microsoft offices, outside of Seattle, worldwide

These two internal forces are unified by a single goal: to sell as much Microsoft software as possible. This goal is pursued relentlessly at all levels of the organization, making it unique from competition that has mixed products and services businesses. Thus, the common goal binds Microsoft corporate has global purview over setting direction and specifying standards-from defining product specifications to launching go-to-market(GTM) campaigns-Microsoft field personnel exercise direction in refining products and pursuing GTM initiatives. In short, corporate has responsibility for products and growth; field has accountability for delivering on those sales objectives

But, to repeat, Microsoft corporate and field are united in realizing a common goal to sell as much as Microsoft software as possible-so any complications arising from their inter-relationship pertain to how to achieve the goal, not what the goal is

Microsoft's major corporate functions include:

Executive management;

Finance and administration;

Legal and investor relations;

Human resources;

Corporate strategy;

Research- and-development teams. Which include product development; and

Marketing and communications

There are five basic types of organizational culture, they can be defined thus:

Blame culture

Blame culture is thus variously interpreted as a way of passing the buck and as a modus operandi which results in people covering up their, or their team's mistakes- in other words, as a culture which abrogates responsibility-or alternatively, as a culture which encourages the taking of responsibility. Certainly, the different lines of management which have input into any operation seem to promote mutual blaming between units and fudging of issues of accountability and responsibility.

Taking blame for others is quite common within the company, although mediated by different levels. Top managers end up taking the rap for everything, though without necessarily having direct control over events

Multi-directional culture

This culture cultivates and minimizes cross-department communication and corporation. The task of corporation and 'multi-direction' is manifested in the organizations inefficiency. Employees are loyal to their particular departments. The various departments are often critical of each other which may develop a lot of gossip in the company. The lack of corporation and multi-direction is evident in the organization

Live and let live culture

This culture results in Stagnation and very low level of creativity. People are not very hopeful about their future and do not struggle too much about their future and have no or little vision about their future and they begin to give up their passions. The cooperation level is about average and things still work in this kind of environment but they do not grow. In this kind of environment like to stay away from each other and there is not much room left for learning

Brand Congruent Culture

People in this culture care and believe in their organizations service. They have good views about their organization and they are happy about what their company is trying to get and help their company to achieve their targets.People goals and the organizations goals match with each other. The people in this organization work hard for the attainment of company's goals and they are even ready to use their personal resources to help organization to solve their problems. The employees of the organization don't always help their management in their decisions: they think their job as important

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

The over confidence of IBM bureaucracy lead IBM reduce in their sales, creating conflicts, which results in IBM lost a big market share in the market. Initially IBM was very strong company having huge market share and there was no single company who can compete with IBM; But their bureaucratic structure and lack of solid organization culture resulted in losing a huge share of market. During late eighties IBM fell victim of their own weak organizational culture and Microsoft emerged as booming company and their culture had shown the world how the company should work


1.2 Climate:

Organizational climate is the total environmental quality within an organization. It may refer to the environment within a school department, a school building, or a school district. Organizational climate can be expressed by such adjectives as open, bustling, warm, easygoing, informal, cold, impersonal, hostile, rigid and closed. Theorists refer to the organizational culture and climate as overlapping concepts. Organization culture has its roots in sociology and anthropology, whereas organizational climate is rooted in psychology, recent attention to school effectiveness and organizational cultures has accomplished the importance of organizational climate. A great deal has been written about organizational culture in the popular literature, but our research-based knowledge of the concept is very limited. In contrast, organizational climate has been studied with a multitude of variables, methodologies, theories, and models, resulting in a substantial body of research."Study of organizational climate have been shown to contain elements of leadership, motivation and job satisfaction

Culture Vs climate:

Climate is more common assumption of culture where as culture denotes the complete idea at dissimilar stages of examination.

The culture of an organizational is observed on the basis of whole organization, on the other hand the climate is observed on the basis of behavior of individuals which includes the attitudes and feelings.

The origin of culture is anthropology and on other hand if we compare this with climate we notice that climate take shape under the umbrella of social psychology. To understand this we need to use special tools and procedure to get knowledge about these theories.

We can say that culture is stay moderately and limited against the normative and it is the fact that one set of assumption is good or bad as compare to others. Examination of different sets of culture and climate then we are able to find outcome in respect of other results such as betterment of growth.

The nature of culture is in the shape of qualitative type and when we compare this with the climate we found it as more resemble to quantitative type.

Leadership Enriched Culture

It is critical to understand that the performance of employees often depend on the culture which took the shape of enriched leadership qualities. Because in this kind of culture the employees consider the goals of organization as their own personal goals. On group basis, the organizations provide the personal requirement of employees and treated each other as family members. The groups strive to achieve what is expected from them and make available achievements in the shape of desired results. In this culture it is to be noted that this culture does not produce followers rather develop personalities to buildup leaderships qualities and ultimately leaders are developed. This is the best quality of this culture that every one is striving for the best of their potentials and bring desired results.

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"

Significance of Organizational Culture

There is only one reason that organization fails to implement the desired culture due to the fact of vigor approach, and we may further elaborates this point is that the old culture of the organization will remain the same. To produce the desire results it is necessary to implement change in culture. Without change in culture it is difficult to get desire results.

1.3 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 and they should act as it should be with the principles set out in the code of conduct. culture mainly influences the whole organization depending on the factors like values attitude, language & regional.

"M Sill, 'Running Head: Microsoft Corporation', Jan 29, 2009"

1.4 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 ethnic bias in its employment practices. 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 develops her professional career over there. 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 is how to motivate Microsoft employees and how to retain them to work with the company. In the early 2000's the overall profits of the company reduces round about 3 millions. In order to increase the overall profit of Microsoft, the human resource department decided to cut off the some of the workers benefits. The reductions of the employees benefits includes reduction in new employees vacation time for new employees, another cut of in the employees benefits includes the discount while purchase of the stocks of the company and the introduction of a co-payment for certain brand name prescription drugs. By cutting off these benefits the company was of the view that it will helps the company to save arount about ES$ 60 million in a financial 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. The cut off in the benefits leads to employee's dissent and they strongly criticized the human resource for cutting off these benefits. According to some of the company's employees the cutoff in the benefits is just a beginning and it is showing the signs of the things that are to be come in near future. The company tries to reduce its expenses so that the profits of the organization could be stable. Majority of human resource managers of different organizations strongly criticized the Microsoft's policy for cutting off the employees benefits programs. According to VP of compensation for, the changes in employees benefits programs will creates problems for the company to hired new peoples in the organization. According to him these changes will place more impact on the current employees more than the future workers, because for the future potential employees the compensation package is a darn good while the current employees it is a reduction in the compensation benefits.

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 comes 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:

Lisa Brummel, was promoted as human resource manager at Microsoft in the year 2005. After she got familiar with the problem of the employees she started to reshaping the organization culture and strategies. She introduced some reforms so that she can met the needs of the employees. In the world Microsoft is considered as one the most profit earning and successful organization. More importantly, from a human resource perspective, the fact that Microsoft is an employee-oriented organization. While if we looked at other companies perspective they considered the organizational success on better production techniques and improved R&D, Microsoft's success to the effectiveness of their employees. In concentrate, Microsoft realized value of their employees and the importance of their employees.

Brummel made main four changes at Microsoft i.e. Communication with employees, workplace design, employees benefits program, & appraisal compensation system,

Communication with employees

aAccording to her employees had no communication with the company. Brummel decided to introduces some new ways to communicate with the company employees rather than putting her more emphasis to the human resource rules, policies, benchmark & practices and forcing its employees to implement on them. According to her if you go running of campus then first you must know what is going on campus. In order to know that is going on in the campus she holds different meetings at different location of the world.

Brummel developed a blog to communicate with the Microsoft employees and she started communicating with them and also established a portal the Microsoft employees can give their suggestions regarding the shortcoming of Microsoft Human resource. 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 thinks it will helped the organization in changing the 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

The employees of the Microsoft considered the Human resource department as a black box and in order to get the feed back from the employees the Brummel had to open that black box. For instant the workers of the Microsoft hated the method of forced curve in their annual performance review. At Microsoft Brummel observed that the employees are not much clear about the compensation system, and they don't have proper guide line how to get promoted.

The Company also introduces some new policies in order to help the workers to grow their career and flourish their managerial capabilities. In the company the prevailing appraisal system and withdrawal of the employees compensation was the major issued that needs to be addressed, the appraisal rating system most of the time based on a controversial numerical rating scale. According to prevailing system appraisal system the numbers of employees that are to be promoted or given good scores were fixed and it also create a problem for the manager to forcefully rate an employee lower than other employee who had performed equitably with the other employee of the same level of the hierarchy. Human Resource manager Brummel abolished the previous rating system and introduced a new system called numerical system and its helps the manager to ranks its employee between 2.5 to 5.0. The new rating system is used to evaluate the performance of the employee that either he had achieved his goals during a year or missed ot he had achieved more than the target 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".

The Human resource department also increase the stock purchase budget to 15 % in order to justify the issued raised by the employee of Microsoft regarding the Microsoft compensation program.

"Todd Bishop, Microsoft Unveils New Worker Perks, May 19, 2006."

Employees Benefits

In order to make the employees benefits program more attractive the Human Resource Manager Brummel took some initiative. 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.

New Workplace

In September 2007, Brummel change the office design and introduces an innovative design. This step was taken to increase the interaction amongst employees working within the organization. The new design includes sliding doors, modular furniture and moveable walls. The new workplace was customized according to the specific needs of the employee.

Employees are categories into four workers types when the employees of the organization employees are categorized on the basis of specific needs i.e. providers, travelers, concentrators and orchestrators.


An effective Human Resource department in any organization not only performed its responsibilities in shaping the overall strategy of the company but also performed its rule as a partner of the company. 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 is of human resource policies that guided its employees to achieved the company goals and enabled the investors & employees to earn more money. |Results of the company clearly disclosed the company's investment made for the betterment for the organization employees and the part played by Brummel has really helped the Microsoft to align the culture of the company.

At Microsoft, resent changes made by human resource department had really changed the way the company is looked. The outcome of the changes made by the human resource department can more clearly be seen when the economy of the country is in recession.