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At Microsoft, the Human Resource department is made accountable for maximising the value of their people asset to drive business success. Employees at Microsoft are recognised as the intellectual fuel and are provided with an assortment of benefit plans and resources that are designed to retain them. Recent changes that have happened at Microsoft, sometimes attributed to recession, indicate a move that could change the way Microsoft is looked at.
The loss of public face and reputation is a parcel of any layoff exercise, but an organization which could stand and survive through such times must have doing something right which others did not.
(The Telegraph, 2009) Microsoft blamed the "deterioration of global economic conditions" for cuts, which left shares in Microsoft down by 6.4% in early trading in Ney York. "Economic activity and IT spend slowed beyond our expectations in the quarter, and we acted quickly to reduce our cost structure and mitigate its impact," said chief financial officer Chris Liddell, adding that the company expects the difficult trading environment to persist until at least the end of June.
In addition to the staff costs, Microsoft is also planning to reduce its spending elsewhere in the business. Chief executive Steve Ballmer had also informed its 91,000 employees in year 2009 through letters that the company will cut its travel cost by 20%, and will reduce expenses on vendors and what he called "contingent staff."
Microsoft adopted the retrenchment strategy during the year 2009 and had also scaled backed the expansion of its Puget Sound site in Washington state, and had also reduced its marketing spending.
Invest in leadership development
Microsoft's success is based on the effectiveness of their employees. (Forbes, 2012) "Whether you believe leaders are born or made, companies still need to invest in their best employees to develop and sustain leadership qualities. Real leadership training involves exposing your best employees to an immersive leadership environment." It all involves a huge investment and a long-term planning by the Human Resource department to build a best team and to invest in them to make them better.
(Kulbir Bora, 2012) "Microsoft posted a net loss of $492 million announced during its financial results quarter ending June 30, 2012, despite posting record revenue of $18.06 billion. The Redmond Company confronted the loss due to the write-down it took because of its failed aQuantive acquisition, an advertising business Microsoft acquired in an effort to catch up with Google's ad business." For the first time ever in its history as a public company, Microsoft is reporting a loss per share.
Challenges in Red Cross
The HR challenges for ICRC included,
1. Clarifying roles and responsibilities
2. Putting in place a result-based management system
3. Increasing the number of staff available for rapid deployment
4. Reinforcing the geographical and hierarchical mobility for staff membersÂ
5. To provide management development and career planning to align individual interests and competencies (with organizational needs and priorities)
6. The HR challenge was also to take into account the growing diversity, particularly with regard to promoting women to top management positions
The ICRC operations success depends upon the appropriate use of human resources. The skills required by the ICRC employees are quite different from that of Microsoft employees. Employee security is also an issue related with people working in the ICRC. The environment in which these employees have to work is dangerous and unpredictable. There is therefore always a shortage of qualified workers both in local and global market who are ready to work for ICRC. The human resource scarcity thus results delays in recruiting suitable candidates. The tendency is to fill some positions on the basis of who is available, rather than who is appropriate for the task.
Delegates in Red Cross are required for long-terms. High turnover of the employees in the fields leads to continuous problems and delays in programme implementation.
"The ICRC is appealing for urgent financial support," said Mr Kellenberger. Funding has been now a major issue for ICRC as several main donors States have been hit by the world economic crisis. ICRC is forced to reduce their initial field budget for 2011 by 80 million Swiss francs, a reduction of 7.6 per cent from the originally budgeted amount of 1.046 billion francs. These budgetary challenges lead to staff reductions and left human resource department under tremendous pressure, putting its existing way of functioning under severe strain.
(Annual Report, 2011) Human Resource department at ICRC has to address two main challenges:
to continue to respond to human resource needs in the field, taking into account the trend towards an increasingly specialized and diverse workforce, while ensuring the rapid deployment of staff in four crises (Cote d'Ivoire, Egypt, Libya, Syrian Arab Republic); this prompted the department to enlarge the pool of Arabic-speaking delegates by 30%, allowing it to approach the target of 120 new recruits in 2011 and to fill all positions opened in Egypt and Libya.
to work on human resource processes and structure to better support operations, in line with People Management strategy.
Human Resources Department is a key and indispensable part of the operational strategy at any organization. It can make or break the organization and also directly affect the results of the organization, both in the long and as well as in short-term. In the current times of economic recession, Human Resource department must act as a strategic partner of the organization in order to ensure that the long-term and short-term visions and goals of the organization from the financial and human capital perspectives are perfectly allied.
In Conclusion, it is essential that organizations develop their people-based strategies in order to achieve long-term economic performance. Downsizing has not been able to remedy problems with products or services. Cost cutting must be avoided and should not to be repeated over and over again. It creates low employee morale and motivation and such things are after all a one shot deal. Microsoft and Red Cross will face several challenges of Human Resource in the coming millennium. How well they manage in an increasingly global and local market will impact how well their organization does in the marketplace.