interest will undermine the team’s effectiveness. “Team members who refuse to consider new processes and procedures will destroy the cohesiveness of a team”. The Microsoft people refuse to adhere to the new ideas proposed by their managers. They try to implement their own ideas to excel than the others.
RECOMMENDATIONS
360 Degree Feedback
- The Microsoft HR department should adopt 360 degree feedback method in which every employee’s suggestion is taken into consideration. This will prevent the employees from making random suggestions and will force them to propose good factual ideas by interacting with their team members that can be put into action.
Challenges to be faced:
- Power play being persistent among employees, the employees will find it hard to gel with each other and work in team.
- The Human Resource Department will have a hard time in implementing idea of teamwork among employees as they have a mindset of performing individually.
Compensation
- Compensation should be provided for the promising team of employees to highlight their skills, coordination and the contribution they have made for the company. It is a complex and specialized activity and entails both pay and benefits. The aim of compensation is to allow the organisation to establish and maintain a competent workforce at an affordable cost.
Challenges to be faced:
- Compensation system may demoralise the team which has not performed well or has not reached the target.
Comparison
- The MS human Resource Department should ensure that none of the employee’s work/contribution should be compared with the employees who have performed well. This will in turn bring down their morale. Instead of pointing an employee’s work as bad, he should be told why his work is not up to the mark and what can be done to improve it.
Challenges to be faced:
- If an employee is corrected by the manager then he/ she might take it as an act of partiality and thus it will have a negative impact on him.
Employee empowerment
- Employee empowerment is the power/authority given to the employees to do their job thus encouraging employee feedback or showing more trust on employees. The following must be carried out by the Human Resource Department:
- Employees/ team should be clearly informed about the priorities of the company and what is needed from them.
- Employees/team should be intimated about the areas they are free to make any decision.
- Achievable goals must be set for them so that they make good use of their knowledge and brains.
- Ensure that employees share their thoughts and doubts among them and also with the management
Challenges to be faced:
- Employee empowerment can be a huge responsibility for some employees as they cannot handle decision making, pressure and the increased power allotted to them. Some employees/teams may take decisions to reduce their personal workload. Some may not be knowledgeable enough to make the appropriate decisions.
RECRUITMENT AND SELECTION
The problem of recruiting new employees is an important human resource issues that is faced by Microsoft. They really had a great difficulty in recruiting people for the challenges they offered. For example- Patrick Nichols got job offers from both Microsoft and Trilogy software after he finished his graduation. Finally, he went for Trilogy because Microsoft couldn’t match Trilogy’s fun-loving culture.
The reason why the people are not going for Microsoft is because of the challenges involved. These challenges are solved by Microsoft in such a way that the organization is running successfully. Some of the issues in staff selection are:
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Universal approach to management: Work should be conveyed through transfer of ideas and practices. Microsoft doesn’t give importance to social background and they are not aware of the local labour policy.
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People cannot acquire multicultural adaptability and behaviours: Microsoft employees cannot adapt with multi-cultural behaviours but that need not happen in all current settings. It depends on every individual’s perception of cultural environment.
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Long selection process: Microsoft follows a long selection process which is hectic and time-consuming for the human resource managers and the applicants. It also involves a high cost factor.
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Impediments due to mobility: In Microsoft, there are impediments to mobility. Staff availability, time and cost constraints are impediments. Virtual assignment is an indicative of this constraint.
RECOMMENDATIONS
Outsourcing is accomplished by transferring many of the company’s employers responsibilities to a professional employment organization (PEO).The method of outsourcing will allow the company to streamline their business which will result in greater efficiency and productivity. Microsoft can make its work done by outsourcing, that is, they hire people for the work to be done in a more economical way.
There should be a good environment for people at work. They should be provided with a good working condition. Culture is created by the experiences of the employees. Microsoft should give importance to social background and they should be able to adapt with the multi-cultural behaviours of the organisation. The employees should be comfortable in working at the work culture environment.
- Shorten selection process:
Microsoft should try to reduce the stages of selection criteria, that is, relaxation of the criteria. If this is followed then Microsoft can certainly get people for the right job. As the selection process is difficult in Microsoft,
fresher’s especially graduates are not ready to make up for Microsoft. They say that they are not able to adjust with the work culture and environment. So in order to cope this, Microsoft can relax on their selection criteria and get rid of talent pool.
- Supervisors “good managers”:
Microsoft can hire human resource manager who is capable of doing things/job and take decisions in the right way at the right time. If the supervisors are not good managers then there will be many issues occurring. So in order to solve the problem Microsoft should adapt or hire managers who acquire multi-cultural behaviours. A good manager should be able to think from the employee’s level also. He should always remember the ‘human in human resources’.
Challenges to be faced
Talent pool is an important challenge else human resource professionals will run into recruitment issues. For example, if there are no sufficient Microsoft certified engineers then there will be a shortage of employees. There will be a problem in filling the staff.
Microsoft fills the position in their organization by looking at the geography, that is, they look to the local talent pool for qualified candidates. Having a lack of local qualified candidates can be a problem.
Selecting the right candidate for a position will be difficult if you have more people with same skills. Microsoft is one organisation that is facing this problem. So in order to solve this you will have to set criteria to make a
decision like the interview process which will have to be extended if you are not able to make the right decision.
Microsoft’s human resource professional duty is to select the employees that are best suited to fill a job. They should have all the qualities that they are looking for.
FORCED RANKING SYSTEM
According to Dunphy and Hackman (1988, p.23), performance appraisal is a vital part of an organization’s strategic planning and can be used as a means of achieving corporate objectives.
Microsoft followed forced ranking system as a tool of performance measurement system. Forced ranking is not conventional performance appraisal process. In this process, managers or superiors of a particular department are required to evaluate or appraise or assess one employee in relation to other. It is a process where people are assessed with the performance of others in the same job category. For instance, in a marketing department, sales manager is asked to compare his three sales executives 1, 2, and 3 in terms of their target with each other. Thereafter, rate or rank or yank them in A, B, C category. Employees of Microsoft were frustrated because of this process and hated it to a greatest extent. For managers it becomes difficult to provide honest feedback to his/her subordinates and especially when it is related to their pay, promotions or dismissal. Such a method has a possibility that the employees feel that it is a slap on their face when they are being compared in front of their colleagues. ‘Microsoft tries to force out the lowest performing 5 percent of its high screened talent each year’ (Quinn et al 1996 cited in Grote 2005, p.6). It is not necessary that these employees are very poor performers or not giving any output to the organization. Companies have to even consider the individual strength and weaknesses. They should understand that each personality is different.
A number of law suits have been filled against Microsoft, because of forced ranking on the basis of discrimination against caste and gender. Zoltners et al (p.317) found, employees made allegations of prejudice against African, Americans and women.
RECOMMENDATIONS
Absolute Ranking Method
Microsoft Human Resource department can adopt Absolute Ranking Method to evaluate their employees. Unlike forced ranking method, Absolute ranking method is a system where employees are evaluated in the context of what he/she has achieved as against his/her own target and the way he/she achieved it. It’s a person-to-standard comparison. For instance, employee A will be given a target. By the end of the project or time period he/she will be evaluated against the target that was set. Such an activity will overcome the issues which were faced in forced ranking method. Employees will work to achieve their targets and will be free from the fear of being humiliated. Such a practice will be fair. In this way management will fulfill its obligation of performance management as well as consider the human side. Adapting such a method will still provide for promotions, rewards, retention strategies and so on. Company will even know their pool of talent. The strength of the employees in the organization, good performers, average performers who need training can be even known in this method.
Challenges to be faced
- Managers may set standards for their employees which are attainable for them as they know everyone’s capabilities and weakness. For instance, sales executive A will be given target of 50 as he is an average performer and sale executive B will be given a target of say 70 as he is a good performer in the same job category.
- There is a possibility of unfair rating in this method. For instance, A is give target of 50 and achieves 55 and B had been given a target of 70
but was able to achieve 67, then in such a situation B will be rated as poor performers though in reality he is a good performer.
Mixed approach
Another option is that, the top performers can be rated according to the comparative ranking method and the average and poor performers can be rated on absolute rating basis. This method is logical as the top performers always want to compete and excel in their field as against their competitors. Such a system will concentrate on developing the good performers as well as provide training to the average performers. Also the employees who have got low ranks will not be able to prove that the system is producing discriminatory scores on the basis of caste, gender or age as they are being ranked on absolute basis.
Challenges to be faced
- The method is weighty. Human resource department will have to work a lot even to explain the process to the employees and to give justifications on this.
- Top performers may resist this on the basis of unfair approach.
RESIGNATION OF TOP LEVEL EXECUTIVES
The managerial developments at Microsoft adversely affected employee morale and their relations with the senior management. Frequent changes at the senior level management, especially the CEO changes, have had a negative impact on the employee‘s perception of the senior management. Employees have started questioning the credibility of the senior level management and its effectiveness.
Impact of Brain drain:
Events playback
- Paul Maritz resigned in 2000.
A lot of Microsoft insiders look back at the departure of Paul Maritz in 2000 as the beginning of Microsoft's brain drain over the last decade. Maritz was influential in Microsoft's early days, and at one point had control over nearly all Microsoft products, but his duties were gradually reduced after Steve Ballmer became President and later CEO.
2. Greg Maffei resigned in 2000.
Maffei worked in finance at Microsoft in the 1990s, and was the company's CFO from 1997 through 2000. He left to become CEO of John Malone's cable and media company Liberty Media, where he was reportedly the in 2009, earning $87.5 million.
3. Nathan Myhrvold(Microsoft CTO) resigned in 2000.
Microsoft CTO Nathan Myhrvold started at Microsoft in 1986, was one of the closest advisors to Bill Gates, and was instrumental in starting Microsoft Research. He left in 2000 to form IP holding company , which collects patents and then tries to capitalize on them by funding inventions or seeking licensing deals -- for instance, Samsung and HTC recently the entire Intellectual Ventures portfolio to help protect themselves from Android-related IP litigation. He is reportedly still close with Gates.
4. Vic Gundotra resigned in 2004.
Compared with most of the other execs on this list, Gundotra was in a relatively low-level position at Microsoft -- he was a general manager of developer evangelism, putting him two or three levels below CEO Steve Ballmer. But as vice president of engineering for Google, Gundotra has been a high-profile spokesperson for the company, and is one of Google's efforts to compete with Facebook in social networking
Impact on Microsoft:
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The impact on Microsoft in the future.
For a software kingdom, the software is his life, and each department is his vital organs. So the management manages the vital organs and updates this software in Microsoft. And now, a lot of top level resigned, some of them already have worked above 20 years in Microsoft. An employee in the Microsoft said: Loss of these executives will be a devastating blow in the future!
- Synchronization of the Organizational Members with new leaders:
This is a post-acquisition problem. As a result of the acquisition between previous leadership and new leadership, there were differences in the management art of firm. Thus it resulted into high turnover rates, the morale and the motivation of the employee went down and also affected the productivity levels of the employees.
- Provide more opportunities for competitor.
Google is the biggest competitor for Microsoft, but some top level leaved Microsoft to Google, this is a huge threat for Microsoft, and also is a huge loss. Brain drain, the loss of not only themselves, if you are as well as it loss the company's core technology.
RECOMMENDATIONS
Succession planning
Succession planning involves identifying key management positions that the organization cannot afford to have vacant. These are usually senior management positions that the organization has traditionally had a very difficult time filling. Succession planning serves two purposes. Firstly, it facilitates transition when an employee leaves. Secondly, succession planning identifies the development needs of high-potential employees and assists with their career planning.
Challenges to be faced
External Recruitment would involve training costs & employees may not be able to adjust to the new managers hired from outside the company. This might disturb the employee’s routine and work styles. Internal Recruitment involves challenges of bias to employees as they have an idea of the current employee status. Also internal recruitment restricts entry of new ideas and fresh minds.
HR focus
Microsoft should change the focus on HR from traditional to strategic. Traditional HR focuses its activities on employee relations, more sure that employee is motivated and productive and the organization follows all the necessary employment law. A strategic approach shifts the focus to partnerships with internal and external groups. Employees are only one part that needs to be considered. The focus on managing people is more systemic, with an understanding of the several factors that impact employees and the organization. And how to manage them to satisfy everyone. Critical partners in the process include employees, customers, stockholders, agencies, public groups etc.
Key investments
The traditional approach to HR sees an organization key investment as its capital, products, brand, and technology and investment strategy. Strategic HR sees the organization`s key investment as its people and their knowledge and abilities. In the long run, people are an organization`s only sustainable competitive advantage.
Accountability
In the traditional approach, HR activities consider functions, as cost centers and emphasis on monitoring expenses and charging overhead to fiscal unit. In the strategic HR approach considers investment returns as well as expenses with attention paid toward the “value added” by HR activities.
HR ISSUES RELATED TO MERGERS AND ACQUISITIONS
Major Merger and Acquisitions Company by Microsoft:
Microsoft’s Acquisition of Skype
On May 10, 2011 Microsoft will acquire Skype for up to $8.5 billion in its largest ever acquisition. After acquisition Skype will support some devices for Microsoft, such as Xbox and Kinect, at same time Microsoft will provide Lync, Outlook, Xbox Live.
Source:http://www.zimbio.com/pictures/ZygPtg5WSeD/Microsoft+Announces+Skype+Acquisition+8+5
Microsoft’s Acquisition of DATAllegro
On September 16, 2008 Microsoft acquires DATAllegro data warehouse Appliance Company. The major subjects are inlarge-volume, high-performance, data warehouse appliances in DATALLERGRO.
Source:http://startupmeme.com/wp-content/uploads/2008/07/microsoft-datallegro-logo.png&imgrefurl
Microsoft’s Acquisition of BigPark
On May 7, 2009 Microsoft announced news its intent to acquire BigPark Inc. BigPark is a interactive online gaming company located Vancouver, British Columbia. The acquisition will bring more BigPark’s talented designers into Microsoft Game Studios.
Source:http://cache.gawker.com/assets/images/kotaku/2009/05/bigpark.jpg&imgrefurl
M&A culture issues- cultural clash
In this case Microsoft CEO believe that culture plays an important role during mergers and acquisitions as the organizational practices, managerial styles and structures to a large extent are determined by the organizational culture. This difference in culture gave rise to many employee problems, at the same time it will affected their performance. Each organization has a different set of beliefs and value Systems, which may clash owing to the M&A activity.
Layoffs
Another main HR issues in mergers is layoffs problem. Most of employees will be affected and what time lines will be involved. After M&A many company may need to make some workers redundant, especially at management levels staffing. This will bring some effects on motivation. Employees are tense, if they losing their also will be affects their ability to provide their . HR employees need to remain businesslike and professional in their dealings with both companies.
Lack of employee engagement
In Microsoft M&A activity it will influence on the employees can be make different kinds of psychological trauma, for illustrate many employees worried after merger will increased workload, survivor guilt and stress .Lead to employee lack of engagement active their performances.
RECOMMENDATIONS
Action by Microsoft HR department before M&A
The HR leadership has an opportunity before the merger to ensure that both organizations have a strategy mapped out in advance. The HR should also pay attention and actions taken to handle to before the acquisition.
Need to Assimilation of New Employees and be a strategic partner
Microsoft HR should not only play the role of change agent and administrative expert but be a strategic partner in the merger and acquisition. HR department need to assimilate new employees. Employees coming into the acquired company may be feeling stress for the present employees. Careful planning is required to introduce the employees and facilitate teamwork. HR-planned activities involving all employees may be helpful to allow for introductions and socializing.
Challenges to be faced
- The new employees and the present ones may show unwillingness to be acquainted with each other.
- Even if the HR wants to be the strategic partner, top level management may side track the HR and let them handle only the administrative issues.
Developing communication plan
The communication aspect being very important should be handled carefully by the human resource department. The transition period can also be used to improve communication with the employees of acquired firm. Improved communication will help to better understand each other’s cultures and practices. In this case Microsoft HR department also can use this period to analyze the human capital of the acquired firm and define their possible roles in the new organizations.
Challenges to be faced
- While communicating, language can be a barrier and people have different connotations to specific words which can be interpreted in a erroneous way.
Aligning corporate cultures
The dissimilarity in the cultures can produce the feelings of hostility and significant uncomfortable, which impact on the commitment and cooperation on the part of employees. HR in Microsoft should tries to focus on the aligning corporate culture differences right from the acquisition period.
Challenges to be faced
The only challenge in this is that it is difficult to embed the existing culture or to come up with a new culture as this process take time and if a valuable employee is not contented then he/she might leave the job.
Creating transition team
The transition period also becomes crucial from communication point of view. During this transition period the employee stress will be increases, the best strategy in this period is to convince the employees that they are part of new organization and their concerns will be taken care of, especially these teams need force on ：
- Develop infrastructure for new organization
- Process and design systems
- Address cultural issues
- Provide training program
LIST OF REFERENCES
Books –
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Patrick, M. Wright, (2003). Human Resource Management. 4th ed. New York. McGraw- Hill/ Irwin
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Bernardin, H. J. (2003). Human Resource Management: An Experiential Approach. 3rd ed. New York: McGraw-Hill/Irwin.
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Schweiger, D. and Ivancevich, J., (1985). Human resources: The forgotten factor in mergers and acquisitions. Personnel Administrator 30(11): 47–48ff.
- Stross, R., 1997, The Microsoft Way: The Real Story of how the company outsmarts its competition, United States of America, Persus Publishing.
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Wong H., 2007. Human factors in project management: concepts, tools and techniques for inspiring teamwork and motivation.
- SL Brown, KM Eisenhardt; 1998; Competing on the Edge: Strategy as Structured Chaos
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Peter.j.dowling,denice e.welch;2004;international human resource mgt,4th edition
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Grote, D., 2005. Forced ranking: making performance management work. Boston: Harvard Business School Press.
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Stone, R., 1991. Human resource management. Australia: John Wiley and sons.
Internet –
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, (2011). Microsoft Acquires Skype: The Merger that might be worth $8.5 Billio, [Online].
Available at: [Assessed on 6 June 2011].
- Fast Facts about Microsoft
Available at: , Accessed 3 June, 2011.
- Silistre, H., Human Resource Management at Microsft, October 08, 2007.
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, J. (2007) What is forced ranking? [online]
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Anon 2006, Microsoft drops forced rank, increases perks [online]
Available at: [Accessed 26 May 2011]
EBooks-
- Human Resource management by Ronald R. Sims
Available at:
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Zoltners, A., Sinha, P. and Lorimer, S., 2009. Building a winning sales force: powerful strategies for driving high performance. New York: Library of Congress Cataloging- in-Publication data.
Available at: [ accessed 26 May 2011]
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deepshikha1 (student)
