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Analysis on the Microsoft based case study
Situation:
Microsoft which is a renowned American multinational corporation and a very popular organization in the international market has been known for its HR strategies since its inception. The company is known for its unprecedented growth and development in a much rapid pace. There has been a time when the company has lost its glory in maintaining the workforce motivated and retained. The work culture which has always received appreciation because of the risk taking capacities, acceptance of challenges and motivation of the employees has been disrupted because of some of the HR strategies and policies. The major issue in respect to the situation has been the policies which could not uplift the morale of the workforce. During the initial stages the company has been running successfully with its several strategies that have helped to encourage the workforce to remain retained and loyal with the organization. The compensation package, benefit programs, work culture and the encouragement provided to the employees so as to make them attracted towards the company. The new talents and skills got attracted towards the company. Lately it has been realized by HR expert that the elements that have been provided to make the work culture to be highly favorable for the employees have been lost with the pace the company continued to grow. There have been several law suits, racial discrimination and proceedings for anti-trust issues have become prominent and that adversely impacted the image of the company and there have been several cases where the employees have been observed to be highly demotivated.
The company has been observed to have taken some of the steps like cost-cutting measures where many employees have been terminated and the employee-benefit strategies have been introduced which further demotivated the employees. The then CEO of the company Steve Ballmer then appointed Lisa Brummel as the senior vice president of HR. Brummel thoroughly analyzed the situation and understood that there was a need for the retention and motivation of the employees. The employees have been suffering from lack of proper motivation and that made them to suffer from low employee morale. To raise their morale and to make them encouraged Brummel has introduced a plan which has been named as ‘myMicrosoft’. The main purpose behind this policy has been to enhance the communication between the workforce and the HR department personnel and to boost up their morale. The plan included the amendments in the existing performance review systems and also several employee benefit programs have been introduced. The intention has been to make changes in the existing workplace culture and to increase the retention and motivation of the employees. This has been one of the most crucial and needful steps taken by Brummel to make the situation favourable for both the employees and the organization.
The company introduced the plan of ‘myMicrosoft’ to analyze the areas where the employees have been facing issues in retaining in the organization and to come up with the needful workable strategies that can make the employees to remain loyal and retained with the company. The company needed some proactive steps to be initiated so that the employees must get the actual sense of belongingness with the company and must not leave the company for better options. The company has always been a reputed organization and it has initiated with the goodwill of taking ample care of its workforce. Retaining its brand image has also been important because the retention and motivation of the efficient employees is always better from the achievement of desired goals and objectives. The steps taken by the company and the changes in the practices and policies of the company have been proved to be beneficial for the company where the outcome has been observed to be highly positive. The employees’ morale has been boosted up, reduction in the rate of employee attrition and effective changes in the motivation of the employees. The attitudes and the conducts of Brummel have been highly appreciated and the ways she has dealt with the issues have been highly commendable. The major issues in the organization have been observed to have been eradicated. The employees gained motivation and they started to be as loyal as they have been initially. In the fiscal year of 2007 the amended performance review system of the company showed that 37% of the employees have received 58% which shows they have performing as desired by the organization and there has been 5% of employees who have been rated ‘underperformed’. From the employee opinion survey conducted in March 2007 it has been revealed that the amended performance review system has been highly accepted and appreciated by the employees.
In 2009 there has been another revolution in the HR practices and strategies where the company introduced new review system for the performances of the managers. The HR manager Aneta Jajkowska said that it is equally important for the company to develop the leadership proficiency of the managers. The managers have to be efficient and they must be able to make the company to compete in the international market with other giant players with efficiency. Hence there have been strategies for the review of the performances of the managers and along with the feedbacks of the employees. The compensations and other motivational aspects have also been taken well care of by the company.
Questions/Problems:
Microsoft has been suffering from several HR related issues. The growth of the company has been negative to its image as it has shifted its focus from product to customer and started to overlook the issues that employees have been facing. There has been high level of bureaucracy in the organization where the CEO and the managers have been the sole decision makers. The managers have been empowered to great extent to take any decision on behalf of the company and that affected the employees and the workplace as a whole. The rate of racial discrimination has increased. The African and American employees have been found to be highly discriminated and the managers have been found to be promoted the employees on the basis of their favoritism. The employees suit many cases against the noticeable racial discrimination as observed openly in the workplace. This issue affected the image of the company where the diversity has been supposed to be accepted and handled well. Microsoft is a multinational company where it has always been noticed that the diversity in the workplace is well managed which has attracted the employees since the initial days. The sudden report of cases of intentional racial discriminations and lawsuits against this issue has affected the image of the company in the eyes of the employees (Nasibov, 2015). The managers have been found to be biased and based on racial discriminations the termination or promotion of employees has been found. It is another important issue affecting the motivation of the employees which in turn affects their performance (Okechukwu, Souza, Davis, & Castro, 2013).
The anti-trust proceedings of the company which have resulted in lawsuits have affected the image of the company much adversely. The entire corporate culture of the company has been observed to have been affected by the unlawful and intentional termination of the employees. The loss in the profit margins of the company has compelled the management to terminate some of the employees and to be proactive towards cost-cutting. The employee benefit programs have been changed. The employees lost their motivation and intention to retain in the company (Wakida, 2015).
The company suffered from declining profit margins and that made it to take drastic step to cut short the workforce. The termination of employees has not able to enable the company to fetch the desired outcome. The employees’ were not heard properly. Their issues did nit reach the top management. The communication between the employees and the HR and the top management has grown poorer. The HR managers failed to communicate the issues that the company has been facing to the employees (Chimoriya, 2015). From the case study it has been clearly noticed that the drastic steps being taken by the company to fight back the declining profitability have affected the morale of the employees. The cost-cutting policies of the company have made the termination of the employees which in turn has affected the morale of the existing employees who either resulted in continuing with low employee morale or have left the company (RootIII, 2017). The employee turnover rate has been observed to have risen to 9.4% from 6.7% between the time periods of 2002-2004. The employee grievances have been observed to have increased to high level where they used to display their grudges in the blogs and open forum. It was unexpected for the HR managers. The cost-cutting measures of the company have been reflected even in trivial areas where the employees felt to be ignored and neglected. The employees’ agitation and agony have been found to have increased to high rate (Alliance , 2017).
Hypothesis:
The situation that Microsoft was facing was due to the name and fame gained as the leading company in its industry. The bureaucratic policies undertaken by the management left many of the employees frustrated. This is because, the managers were observing a bit of autocracy where they were imposing their decisions on the employees without adequate consideration of their perspectives and thoughts on several key decisions. The major decisions of the firm had to be approved by Gates or Ballmer and this even made the role of some of the managers less important in the organizational structure. This was a situation that led to the lack of motivation of the employees (George, 2017). This reveals that, it is extremely important for an organization to make the employees feel empowered or else they would start to feel demotivated and after a while many of them will feel reluctant to work. Finally, the employee productivity will fall and the management would either have to lay them off or the employees would resign by themselves. Thus, the essence of employee empowerment in an organization cannot be over-emphasized. It can be said that after the restructuring of the company from being product-centric to consumer-centric, many of the managers in the higher and middle levels had to be delegated more power and authority and it offered a challenging environment to them. Thus, it was a prudent move by the management to give employees more power and authority in decision-making for a better future of the organization (Shetrone, 2011).
Another major issue in case of Microsoft was the racial discrimination that was rampant in the organization. This is one of the major detriments to an organizational culture. For an organization of the stature of Microsoft, it was strictly undesirable and the employees were being highly affected by such discriminations. This led to the demotivation of the employees to a great extent and it became extremely difficult for Microsoft to retain many of its employees (Chartered Institute of Personnel and Development , 2016).
Another major issue in case of Microsoft was the racial discrimination that was rampant in the organization. This is one of the major detriments to an organizational culture. For an organization of the stature of Microsoft, it was strictly undesirable and the employees were being highly affected by such discriminations. This led to the demotivation of the employees to a great extent and it became extremely difficult for Microsoft to retain many of its employees (Chartered Institute of Personnel and Development , 2016).
Therefore, it is great evidence that racial discrimination is one of the most disgraceful HR issues to happen in a workplace. An organization needs to observe the policy of equity and equitability among all the employees irrespective of their gender, culture or religion. This should be embedded in the business code of ethics for every organization. Especially, in case of an organization as big as Microsoft, the HR should have been much effective and strong-willed not to entertain such cases within the organization to happen. But, the cases prove that the HR was not that much empowered to intervene immediately into the issues and try to eradicate them from the roots. This naturally, depicts the failure of Gates and Ballmer as they were so much focused behind the product related strategies and profitability of the organization that they were negligent in taking care of the human capital of the organization that was the main backbone of success for the organization. Therefore, it can be said that it is pivotal for an organization to achieve adequate employee motivation such that the employees stay motivated and always look forward to delivering their best for the organization. It cannot be denied that for enhancing the employee productivity an organization needs to have effective strategies such as an equitable work culture, lucrative rewards and recognition, training and development, employee appraisal and retention strategies. The motivated employees are strengths of an organization and therefore, the employees who are highly motivated at workplace deliver the best efficiency and this in turn reduces the employee attrition (Exchange, 2012).
Proof and Action:
In such a disastrous situation of Microsoft, Brummel after her appointment, took effective steps to alter the existing HR practices within the organization and making them more employee-centric rather than profit-centric. The existing HR strategies encompassed only a single framework for all the employees irrespective of their departments and designations. Brummel was prudent and diligent in understanding that in order to improve the ominous situation within the organization, there was requirement for individual attention for all the employees and belonging to different departments and hierarchy. The success of an HR system can never be achieved if only one line of action is observed for all the employees. This is not a logical system of conducting the HR functions and the one strategy for all policy was the major cause of lack of organizational effectiveness and productivity as the majority of the employees started to feel demotivated in their jobs. The employees were disappointed and many of them were losing the motivation to work in the organization (Informa Middle East, 2017).
This was a major cause of concern for Gates, Ballmer and the other top brasses in the management. They were only concerned about the satisfaction to the investors and customers and neglected the main contributors to success of the company those are its employees without whose contributions the organization would never have reached the size and fame that it has reached. Therefore, understanding the graveness of the scenario, Brummel identified four key areas where she needed to focus in order to bring the organization back on track. The four major areas where improvement and action was necessary were in the domains of communication strategies with the employees, compensation strategies and appraisal systems, effective employee benefits programs and restructuring the entire workplace. Brummel observed that the employees lacked adequate communication among themselves and also with the HR department. This was one of the major causes of lack of understanding between the employees and the HR personnel. The employees were not conveying their issues or grievances effectively to the HR due to lack of warmth and minimum mixing of the employees between departments. In order to enhance the level of communication of the employees with the HR department, she launched the program named ‘A Listening Tour’.
The program consisted of conducting various town hall meetings with the employees all across the globe. These events invited the employees to interact with one another and also with Brummel regarding the issues they were facing or any suggestions or ideas they wanted to share. The employees shared their dissatisfaction with the performance appraisal process and the compensation strategies. This made Brummel launch the ‘myMicrosoft’ program in May 2006. The program consisted of a much effective and logical employee performance appraisal and compensation system.
The program was directed to achieve improvements in other areas such as improving the management training and development so that the managers can be more accountable and they have the opportunity to enhance their skills. The career development paths were clearly integrated into the program for the future of the employees within the organization. The other features of the program included the On-Campus Services consisting of facilities for the employees such as laundry, dry cleaning, convenience stores and grocery delivery. The other amenities consisted of increasing the food menus in the company cafeteria and free towel services in the locker rooms for the employees.
The employees were also offered big discounts on various services like housekeeping, auto repairing, pet care, yard care, etc. The new strategies were analyzed by many analysts and the majority of them opined that the programs were extremely prudent moves to revamp the HR strategies of the enterprise. Since, retention of talent was the prime focus of the HR, therefore, the afore-discussed strategies could be considered as quite effective moves in the right direction towards achieving enhanced employee motivation and satisfaction that would ultimately contribute to employee retention.
Alternatives:
In the light of the analysis of Microsoft’s situation and the need for a renewed HR structure and policy, it can be said that Brummel’s strategies could be considered as quite efficient and prudent in getting the HR functions back on track. The main motive for the changed HR policies was the achievement of enhanced employee motivation and increase in the productivity. Regarding the strategies formulated by Brummel it can be said that they were quite logical in the context of the situation. She focused on the improvement of the employee appraisal, compensation, training and career development options. While these can be considered as extremely important factors for achieving employee motivation, yet Brummel did not consider the intrinsic factors to motivation such as recognition of employees. Though, employees are driven by the extrinsic factors of motivation such as compensation, etc. yet it has been observed that majority of the employees prefer recognition and admiration more than the compensation they are being offered (Tansel & Gazîo?lu, 2014).
The employees feel worthy when their performances are recognized in front of the others. This offers them even bigger motivation along with the extrinsic motivation. Thus, it can be suggested that along with the selected programs, a strategy to include some employee recognition programs would have been even more plausible to enhance the satisfaction of the Microsoft employees abruptly. Employees need salaries, perks, incentives to fulfill their personal and professional needs. But, they need the emotional stimulation also in the form of recognition for good performances. The acclaim makes them more dedicated to work harder with more sincerity and dedication. Thus, the concept of recognition strategies could have been recommended to achieve even fruitful outcomes and employee retention (Chartered Institute of Personnel and Development , 2016).
References:
Armstrong, M. (2002). Employee Reward.
Chartered Institute of Personnel and Development . (2016). Employee turnover and retention. Retrieved from https://www.cipd.co.uk/knowledge/strategy/resourcing/turnover-retention-factsheet
Exchange, E. (2012). The Real Cost of Employee Turnover. Retrieved from http://blog.experts-exchange.com/ee-blog/the-real-cost-of-employee-turnover/
George, N. R. (2017). Role of Communication in Employee Motivation. Retrieved from http://smallbusiness.chron.com/role-communication-employee-motivation-11914.html
Informa Middle East. (2017). Employee Performance Management Using KPIs. Retrieved from informa-mea: http://www.informa-mea.com/Training/mgmtkpis
Shetrone, A. (2011). 7 Ways to Improve Employee Satisfaction. Retrieved from inc: http://www.inc.com/guides/201105/7-ways-to-improve-employee-satisfaction.html
Tansel, A., & Gazîo?lu, ?. (2014). Management-employee relations,firm size and job satisfaction. International Journal of Manpower; Vol. 35, No. 8, , 1260-1275.
Chartered Institute of Personnel and Development . (2016). Employee turnover and retention. Retrieved from https://www.cipd.co.uk/knowledge/strategy/resourcing/turnover-retention-factsheet
Exchange, E. (2012). The Real Cost of Employee Turnover. Retrieved from http://blog.experts-exchange.com/ee-blog/the-real-cost-of-employee-turnover/
George, N. R. (2017). Role of Communication in Employee Motivation. Retrieved from http://smallbusiness.chron.com/role-communication-employee-motivation-11914.html
Informa Middle East. (2017). Employee Performance Management Using KPIs. Retrieved from informa-mea: http://www.informa-mea.com/Training/mgmtkpis
Shetrone, A. (2011). 7 Ways to Improve Employee Satisfaction. Retrieved from inc: http://www.inc.com/guides/201105/7-ways-to-improve-employee-satisfaction.html
Tansel, A., & Gazîo?lu, ?. (2014). Management-employee relations,firm size and job satisfaction. International Journal of Manpower; Vol. 35, No. 8, , 1260-1275.
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