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Microsoft Corporation is a company located in USA that manufactures, develops and supports a wide variety of products and services in the computing sector. The products and services of the company include computer software, consumer electronic, hardware, IT consulting, etc. The company established in 1975 by Bill Gates and Paul Allen, excelled in developing the operating systems for the computers. In 1984 they released the Microsoft windows version jointly with IBM. The company considers Human Resources as its asset and is keen on attracting and retaining talented manpower and managing them efficiently by making informed decisions. The company has around 93,000 employees and they manage the employees strategically.
Maintaining a sound performance appraisal system in the company is the most difficult and most important part of Human Resource Management in the company (Coutts and Schneider, 2004). The performance of the employs in the organization is tracked and their work is observed by the supervisors and effective feedback is given at appropriate times. The performance appraisal process in the company is carried out after the superiors and subordinates come together to discuss the goals, objectives, expectations of the company, targets to be achieved, evaluation criteria and methods. The supervisor of the company is responsible towards identifying the skills, competencies and knowledge of the employees and if they are capable enough to carry out their duties and work effectively. The superiors also need to ensure that they properly communicate and give the right idea regarding the performance expectations and the rewards for the performance (Newstrom and Davis, 1993). Some methods that companies usually follow for the purpose of performance evaluation are 360 degree feedback, critical incidence, rating scales etc.
Microsoft is a company that gives importance to its Human resources, thus has developed a web-based tool â€˜the performance toolâ€™ wherein the commitments, goals and employees and bosses are included and their roles defined. The employees in the company can log on using an ID and clearly understand the goals of the superior frame or change oneâ€™s own goal that way. This tool or model is flexible as the goals can be changed according to their requirement. Performance management system is managed with the help of this model in the company.
Microsoft follows certain steps in its performance evaluation process:
As a first step the employee and the manager carry out a face to face meeting twice a week. Then a meeting is done half yearly where the employees and the managers discuss and solve various issues concerned with behavior, performance and the expectations. Online tests are carried out to check the skill level of the employees and feedback is given according to the tests. Microsoft also provides an option for the employee to choose their superiors to be their mentors.
Performance appraisal structure in Microsoft is unique with 2 reviews being held in a year i.e. career compass held in January and Final performance appraisal held in August.
Career Compass is a review held in midyear wherein the employee development considered as an important thing. The mainly includes the development of their competencies, in which case the company involves two kinds of competencies:
Microsoft core competencies- involve collaboration and cross border cooperation, innovation, confidence and proper decision making
Functional competencies in Microsoft are the interpersonal skills, skills for project management, analytical skills, strategic decision making etc.
Final performance appraisal involves the proper reviewing of the total performance management carried out in the company and is used to rate all the performances and commitments.
The goals and targets that were set before as a benchmark will be reviewed and revised after the performance evaluation is done. The employee is also encouraged to do the self appraisals so that they themselves can understand the issues and lack of performance and reasons etc. in the final appraisal process the concerned managers of the department where the employee belongs and HR personnel of the company would sit together and discuss the details of the performance evaluation and appraisal process of the employees. They then rate the employees according to their level of performance achieved based on the standard set.
The rating system in the company is based upon commitments and the target achieved. The performance rating in the company is form 5 which is for exceptional performance to 1 unsatisfactory performance. The company also follows a contribution ranking against the coworkers depending on the factors like the readiness to work and potential to learn.
The performance appraisal and evaluation process in the company is highly essential in highlighting and communicating its goals and objectives to its employees and ensuring that they are properly achieved (Longenecker, 1997). Microsoft has been successful in maintaining the proper level of performance among the employees and achieves organizational goals. The employees in the company are aware of their roles and responsibilities thus working towards achieving the targets by framing their goals in the right direction (Grote, 1996). Microsoft is a company that provides certain important targets for each department by asking them to maintain a standard level performance rating for the employees, where in the standard of performance of the employees does not go below this level.
The environmental factors have a key role to play in the methods used by the company with respect to the various HR practices. Thus the performance evaluation process in Microsoft Corporation is formulated taking into consideration the factors of external environmental factors. The various political, economic, social and technological factors play a key role in defining the human resource activities of the company.
Political factors: The political environment in a country can be considered as an important factor that will affect the working of the company in a number of ways. One of the important political issues related to companies like Microsoft are the property protection measures and protection for investments. Many political parties helped the company gain tax benefits in a lot of ways.
Economic Factors: it is difficult to list out the key economic factors that affect the company, since the Information Technology market is highly dynamic and standardization is not possible (Rubini, 2010). The recent economic downturn has also adversely affected the company like any other as the economy of most of the countries was badly hit and the market had slowed down.
Social environmental factors: the social environment of the country in which they operate, act as important aspects in deciding the performance and operations of the company. A company that is socially responsible will be considered well by the customer. The employees will feel proud to work for such companies. Microsoft has been funding many CSR activities, but due to the economic recession the company has cut its budget in that area to invest in some its products. A company that is committed to the society will also possess employees who would work towards such a goal.
Technological environment: the technological factors like the technological innovations and creativity has lead to an entirely new and different kind of expansion in the information technology industry. There are many companies operating in the market providing software, IT and hardware services with innovative technology in every service. The growth of technology has been tremendous as a result of which the company has to recruit and acquire more skills and trained employees who have the knowledge of changing technology in this field. In order to increase the operational efficiency the company is expected to increase the performance level of the employees (Kurtz, 2009). Proper performance management system in the company will cater to providing the solution to this issue. Microsoft has developed various methods to perfectly understand the make clear evaluations of the employee performance and train them according to the need of the hour.
The study is thus concludes that the company Microsoft is highly specific on establishing a proper performance management system that meets their requirements and maintains their standard at all levels. The Human Resource Management and planning in the company is effective as they have a plan on how to make best use of their human resources asset. The various environmental factors and conditions play a key role deciding various aspects of HR practices in the company. The performance appraisal system is crucial in achieving the goals of the company.