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Microsoft: Competin on Talent CASE STUDY
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Microsoft: Competing on Talent (A) Christopoher A Bartlett
Summary of Case In summer 1999, a front page article on Wall Street Journal reported that: “Tired
of grueling deadlines, frustrated by the bureaucracy that has accomp Microsof t’s explosive growth, or lured away by the boom in high tech start ups, d of the company’s most capable leaders, all around 40, have opted out – temporarily….” Foundations of Microsoft s human resources philosophies, policies and practices ’
Recruitment: attracting the best and the brightest
Bill Gates had long recognized that it took exceptional people to write outstanding softwa the initial stages, they recruited You're friends”a Preview extremely intelligent but not neces “smartReading experienced, new college graduates. Unlock full access with a free trial.
In 1992, Gates acknowledged that “Take our 20 best people away, and I will tell you Download With Trial Microsoft will become an unimportant company He considered helping his managers hi ”. Free best of all possible candidates as his greatest accomplishment.
For Gates, acquired knowledge was less important than “smar ts” – the ability to think creat and experience was less important than ambition – the drive to get things done. And, to rai bar continually. Sign up to vote on this title
Not1980 usefulas assistant t in One of the prime responsibility of Steve Ballmer, since he Useful was hired President was recruiting coordinator. Steve’s mantra was:
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Interview followed “drill down” approach; subsequent interviews will concentrate on area the first set found to be weak.
The purpose of interviews was to push the candidates until they failed, to get a full understa of both their strengths and their limitations. Only, “hire” or “no hire” recommendations.
Prospective manager interviewed in the end. But, also, a so called “as appropriate” intervi was also involved so that only good gets in, and not just good people for specific jobs. Tight control on head count; always n-1 philosophy is followed for staffing requirements.
Steve Ballmer preached that the default decision on a candidate is “no hir e”; unless on identify a clear reason why the person should be hired. This helped to keep the bar high, very low selection ratio.
A person who is just OK is blocking the seat for some one exceptional; a poor performe weeded out, a mediocre might continue to occupy the place. Work environment: the caffeine culture
You're Reading a Preview Hot house of innovation and hard work. Software developers dominated theUnlock company. cubicle, that can be done full accessSeparate with a free office trial. individual tastes. Creating a college like atmosphere. Provide a sense of social belonging.
Download With Free Trial Values of frugality: salaries were modest. Travel was coach class. No ob vious status symbo The vision was “a computer on every desk in every home, running on Microsoft software”
Gates worked hard to keep the “small company” feel. He continually restructure Sign up – tofurther vote on dividing this title these into organization into small units – typically with 30 to 200 people groups with responsibility for a product, project or program. So, conscious attempt was to h Useful Not useful collection of small groups rather than an integrated entity.
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People could grow as individual contributors (say as technical gurus) or advance o management track (as a product manager) but obtain same recognition, compensation promotion opportunities.
Vertical growth, as well as horizontal growth. For the latter, employees were encourag develop themselves by switching jobs, typically ever y 2 or 2.5 years.
Experiential learning: Microsoft had a long tradition of promoting people who were in char failed projects – “if you fire the person who failed, you are throwing away the learning.
Mentoring: New hires understood that it was their responsibility to learn from a whole ran experienced people including team leads, experts, and particularly their formally app mentors, often equally young but more experienced colleagues who took on the primary tea responsibility in addition to doing their work. Review and Reward: the Options driven Engine
Gates believed that employee ownership raised motivation and retention. Key employees given equity in lieu of high salaries; a strate gy that conserved cash for growth. You're Reading a Preview A well established linkage between individual performance and reward. Gate’s style of prov Unlock full access with a free trial. brutal, honest feedback got institutionalized in a process of direct, clear semi annual perform reviews tied to pay increases, bonus awards, and stock option grants. Setting specific quanti Download With Free Trial objectives every six months was the norm. Eventually, the acronym SMART was appl performance objectives – SPECIFIC, MEASURABLE, ATTAINABLE, RESULTS BA TIME BOUND. Learning from mistakes, during semi annual reviews. “the disease model of management” Sign up to vote on this title
Performance review interactions were soon recognized as one of its best employee develop Useful Not useful forums. 1 to 5 performance scale: 25% received 3.0 or lower, 40% received 3.5, and 35% received
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Reward: Merit increases were awarded on the basis of one’s present skills while rewarded achievements in the immediate past period. Options were awarded on the future value to and potential at Microsoft.
Public recognition and awards were not widely employed, at least at the higher levels. “We to be very parsimonious with praise around here”.
Microsoft through the 1990s
From small personal start up, it was now a big company, but there was still a desire to hold the underlying people philosophies that many felt were at the heart of the company’s success Recruitment: Still viewed as a prime responsibility of ever yone in the organization. “The
person being interviewed has to be smarter than half of your group.” n-1 rule for staffing the projects remained.
By mid 1990s, the campus recruitment vs selection ratio was 50:1. Out of all computer sc You're Reading a Preview graduates of USA (25000), 8000 were shortlisted, and after review, 2600 were targete campus interview, and 800 were invited final interview and 500 were chosen. Unlockfor full access with a free trial.
Experienced recruits: Needed managers to fuel the growth. Download With Free Trial A team of 300 recruiting ex whose job was to identify the industry’s most talented people, build a relationship with them eventually attract them to Microsoft. Stalking the talent.
Performance of recruiters: number of “contacts” they maintained (that is, potential recru percentage of conversion to staff, and their performance once they joined the company. Sign up to vote on this title
Managing culture in the 1990s.
20000 employee level.
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So, in 1997, internal experts developed “Organisational Health Index (OHI). “With
control over compensation largely outsourced to NASDAQ, the work environ became the biggest retention tool we had to manage…… It is about keeping aliv entrepreneurial spirit, ability for individual action, and the opportunity to ma difference”.
Steve Ballmer was appointed the President in 1998. Staff strength was then 30000. He cond one to one interviews with a cross section of 100 employees. And concluded that the com needed two things:
A greater sense of clarity and excitement about the company’s direction, and More freedom to act without bureaucracy or red tape.
Accordingly, he proposed and the company changed its vision: “to empower people to do any they want, any place they want, and on any device”. His second priority was to develop le capable of clearing the obstacles, making decisions quickly, and defining clear goals conclusion was that top management have to push authority down and replace it’s traditional on control with coaching – what he termed “turning over the keys”.
You're Reading a Preview OHI measures, using 19 carefully selected employee survey questions designed to cor directly to a person’s intent to stay at Microsoft, in the fall of 1998. The Unlock full accesswas with aimplemented free trial. data was tabulated and index created for each VP. Ballmer insisted that all VPs make OHI foc their first slide in their annual businessDownload review meeting. With Free Trial Development in the 1990s.
One of the constraints being faced: lack of sufficient capable mana gers and leaders.
Sign upmanagement to vote on this title So, the company decided to put on more effort on leadership and development.
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From “Darwinian approach to leadership development (happen chance) to formal leade development programmes.
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is not interested in HR. He is interested in “Do I have the right people in the right p making the right decisions for the compan y?” Review and Reward in 1990s “Microsofties “Sometimes
wear golden handcuffs. They are the stock options that vest each year ”.
I feel like I am running a volunteer organization”. Said one VP.
As the company grew, one major concern was the noticeable decrease in the understanding of it took to succeed at Microsoft. As a result, around 1994, the company set out to identify skills, capabilities and values that were dear to old timers and those at the top, but less visi new comers or those deeper in the organization.
To develop the “competency model” HR specialists asked 50 old timers to describe what Microsoft successful. About 110 value ideas were identified, from which six “success fa were freezed: taking a long term approach to people and technology; getting res individual excellence; a passion for products and technology; customer feedback; teamwork. Some were widely understood; but the last two were more recently emphasized v You're Reading a Preview and tended to be more aspirational. For successful implementation of these six core values, a s 29 individual competencies were developed; with each one described behaviorally at four dif Unlock full access with a free trial. levels of performance. These competencies, printed on cards, became the tool kit for perform review process, recruitment interviews, career development sessions, etc. There is a cont demand for the cards by managers. Download With Free Trial th
th
Salary was moved from 50 percentile of the industry to 65 percentile. The number executive ladder levels were increased from 12 to 22 to reward high performers more freq with promotions. Protecting the Past, Building the Future
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Work life balance: Ballmer is advocating this. People who were hired for their drive and passion didn’t easily rebalance their lives.
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Requirements: 1. Case should be presented in Analytical way; positive aspects as well as negative as as per the students understanding. 2. Student should make Power Point Presentation along with the documented repor group of two. 3. Student should focus on the learning from course (Talent Acquisition) after solvin case. It includes extension of Assignment B. a. Vacancy Positing (choosing the proper channel) b. Collection of CVs, Short listing c. Interview Plan d. Selection of best candidates e. Induction Program Students should prepare elaborative and analytical aspects of Talent Acquisition based on no. 3.
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Overview
Microsoft greatly impacted the way people around the world used computers, and creat goal for every desk in every home to have a computer. A large part of their plan to acc this goal was through hiring the smartest and most motivated employees.
Steve Ballm
company’s COO, was quoted as saying “We want smart people, who work hard, and wh
things done.#” To get the best employees, you have to offer the candidate something ent
Microsoft saw their benefit as giving employees the opportunity to change the way peop
and do business, and in turn, change the world. They recruited from the top schools, and
they saw a candidate they liked, they got them. Microsoft was an intense culture, who p
their employees to be the best. However, as Microsoft matured and experience changes i
company due to explosive growth, they found it increasingly hard to and retain and motiva extraordinary people that had worked their way up to senior levels within the company.
In Microsoft’s early days, they experienced the benefits of being one of the leaders in techn
advancement. One of their best attributes was their reputation that made it appealing new developer candidates.
Microsoft preferred creative, smart and motivated individu
You're Reading experienced and knowledgeable candidates whena Preview recruiting for new hires.
They the
recruited the top talent of top universities like Harvard, MIT and Yale. They looked for indi Unlock full access with a free trial.
that were not afraid of working long hours and under demanding constraints. They pushe
1” philosophy an example of this by having on employees to the limit. Their “n minus Download With Freewas Trial
employee than the work really required. Developers were also given stretch assignmen
tested their ability to “sink or swim” in situations that were beyond what they may have
ready to handle at the current stage in their career. Recruitment and Selection
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Beginning from its initial days, Microsoft has believed in recruiting extremely intelligent
favouring intelligence over experience. Co‐founders Bill Gates and Paul Allen shared a prefe
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minus 1’ strategy which means less people are employed than are required. This policy rein
that hiring the right people is more important than hiring just to fill a position.
Microsoft retains the same basic principles as they have expanded but had to change
methods when the number of new employees required could no longer be sourced only
universities. The recruiting practices continue to be active rather than passive, with Mic ‘head hunting’ the best staff. These staff are found, monitored and recruited from
companies by over 300 recruiting experts. These staffs actively recruit suitable employee
focus on the right type of person rather than the right type of skill level Microsoft uses h resources for competitive advantage, basing its success on having the very best people
industry and inspiring them to be the best. It is this that lea ds to Microsoft’s unique recrui practices.
What is most crucial here is that Microsoft’s recruitment practices meet its human res
needs. It is an important sign of the focused approach of Microsoft, with its actions always l
towards its ultimate goals. Some important factors to be considered in recruiting staff in You're Reading a Preview that the recruiter should be from the same functional area and that candidates should n
Unlock full access with a free trial. deceived about the negative elements of a job. The interview process at Microsoft reflec
with the new employee being interviewed by the manager. The recruitment process also Download With Free Trial further than just informing the employee about the negative aspects, instead the recrui
process actually tests the employee on the negative aspects, putting them under the same t pressure they would be put under on the job. Sign up to vote on this title
Motivation
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The key to supporting the motivation of your employee is to understand what motivates e
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Employee motivation can also be related to Maslow’s hierarchy of needs theory. This theo
the top level of the needs theory as self‐actualization28 needs, which is a person`s need
self‐fulfilled. Maslow describes that the way to achieve this is to “provide people
opportunities to grow, be creative, and acquire training for challenging assignment
advancement”. This is exactly what Microsoft provides for its staff and also exactly w
expects, for them to be the very best they can be. The link can also be seen here betwee
type of people that are employed and what is expected. Microsoft hires the very best peop
these people to achieve self‐actualization they need to be pushed harder than most and
greater opportunity to achieve than most. Satisfaction and Loyalty
Microsoft attempts to cater to the needs of its employees by recognizing that the m
workforce comprises fresh graduates just out of college. This is the premise behind Mic
setting up its offices as ‘campuses’ rather than pla in workspace and parking space settin
was the norm before Microsoft. The environment it provides also includes every employee free to decorate their office as they please; and the provision of subsidized food and drink.
You're Reading a Preview Employee satisfaction was also afforded by the opportunity for growth, developmen
Unlock full access with a free trial. occurred by encouraging horizontal transfers, and employees were encouraged to de
themselves by switching jobs. Top management is required to coach lower levels and assis Download With Free Trial their development. These practices are designed to increase employee satisfaction commitment to the organization, while maintaining the same spirit the small company with.
This program, which was initiated during the early 1990s during the recession,also be Sign up to vote on this title
known as ‘turning over the keys’. The premise at that time was to retain the talented empl
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and keep them motivated by offering them new areas of learning and self development.
hindsight, however, this was a unique exercise of employee empowerment and succ
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This issue can also be looked at in terms of an employee’s role. There are three factors asso
with roles – role ambiguity, role conflict and role overload. Role ambiguity is kept l Microsoft because of the consistency in the culture and in what is required; role conflict
kept low due to clear goals and objectives; Role overload is kept high, with employees pus
their limits. In most organizations this would be a concern, but Microsoft’s awareness o
means that they specifically seek employees who will react well with role overload. jobs an
like they were changing the world. It also created natural work units consisting of 30 t
people, which again were divided into work groups. This clarified the task identity an
significance for the employees. Microsoft gave autonomy to these work groups, so tha
could decide when to start to work or when to play volleyball. Horizontal transfers h
personal growth through job switching. Key people were allocated from one project to an
which accelerated training and development process by increasing skill variety. The emp were not discouraged by the fear of failure since in the organizational culture of Microsoft,
was considered as a part of learning curve. Even the brutal criticisms by Bill Gates bec source of motivation... Rewards:
You're Reading a Preview
As an organization, Microsoft still Unlock follows the firm belief of its followers in linking em full access with a free trial. ownership with employee motivation and retention. Critical to this is the link between indi performance and reward, with semi‐annual performance reviews linked to pay increases, Download With Free Trial
awards and stock options. The formal review system also includes more common evaluatio
managers to ensure no unexpected deviations. The system also includes the proce
employees evaluating themselves, these self‐evaluations then being sent to the manage
does their own evaluation. The employee and manager then meet to discuss the review. Sign up to vote on this title
In terms of performance, employees are measured against specific measurable goals, u useful Useful Not
termed as SMART goalsunder Organizational Behaviour Terminology ‐ Specific, Measu Attainable, Results‐based, and Time‐bound.
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Important to the reward system is also the fact that there are two reward paths available, o
those following the technical path and one for those following the management path. The s
employees can be divided into three areas: conceptual skills, human skills and technical Typically, conceptual skills become more required and technical skills less required as one
up the corporate ladder. Microsoft is a company valuing technical skills, due to the nature
product. In most organizations, employees with conceptual skills would be rewarded by m
up the corporate ladder, while those with technical skills would not advance. Microsoft, ho
offers two advancement paths – allowing those with technical skills to advance as tec experts, just as those with conceptual skills advance as managers.
Reward systems are an important part of organizational culture; they communicate to emp
what is valued by the organization. By having these two reward systems, Microsoft effe
communicates that both sets of skills are valued. This is also an important sign of Micro
consistency. They recruit people for technical ability and so not rewarding for it wou dissatisfying to employees.
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Advantages
Disadvantages
Recruitment
Open opportunities to new talent.
Opens door for new and creative ideas.
Require high supervision.
Lack of experience in satisfying customer and solving problems. New and innovative ideas.
Ignores the experienced people fro the industry. Ignores the dependable and loyal group of people. Ignores the group who need little supervision and motivation to do th task.
Ignores the manpower who have ye of experience in satisfying custome and solving problems. More recruitment and retention co
takes long time, energy and money
Selection:
Only best candidate gets selected.
Work environment:
Easy control over small groupYou're of Reading aPreview High cost people. Unlock full access with a free trial. Easy correspondence within the team. Highly depended on team member.
Review and Reward Helps to motivate the team.
Download With Free Trial
Individual focus more on personal g than that of the company. Sign up to vote on this title
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a. Vacancy Posting (choosing the proper channel): Arrangement in which a firm posts a
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