MicrosoftsHRStrategyAnAnalysis

HRPlanningReport
JyotiPriyadarshini
805803145

Preview___________________________________________________________________________ 1
ElementsofEffectiveHRStrategy_____________________________________________________________2

Microsoft:KnowledgeFueloftheTechnologyWorld_______________________________________ 2
HRStrategyatMicrosoft_____________________________________________________________ 3
RecruitmentandSelection:AttractingtheBestandtheBrightest___________________________________5
TakingadvantageofMarketConditions________________________________________________________6
EmployeeMotivation_______________________________________________________________________6
EmployeeSatisfactionandLoyalty____________________________________________________________7
EmployeeRewards:TheOptionsdrivenEngine _________________________________________________8
Growth&Acquisitions______________________________________________________________________9
SWOTAnalysis ____________________________________________________________________________9

ReshapingMicrosoftsHRAgenda _____________________________________________________ 9
Conclusion________________________________________________________________________ 10

Preview
Human Resources Department at any organization is a crucial and indispensable part of the operational
strategy1.Itcandirectlyaffecttheresultsoftheorganization,andmakeaveryimportantdifferencebetween
the success and failure of any organizational strategy or goal, both in the long and well as short term. An
efficientHRdepartmentshouldbeabletoaccess,forecast,predict,design,andimplementitsstrategiesindirect
sync with the business goals and strategies of the organization for a mutual and coherent environment, or
completely fail at one or more steps to create imbalance and instability within the organization. With the

1
EELawlerIIIAsiaPacificJournalofHumanResources,2005;Creatinghighperformanceorganizations;1214

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presenteconomiccycleofrecession2atprobablyitsworstforcloseto15years,itisallthemoreimportantfor
theHRdepartmenttoactasastrategicpartnerofthebusiness,soastoensurethatthelongtermandshort
terms visions and goals of the organization from the financial and human capital perspectives are perfectly
alignedandharmonious.Atthesametime,anefficientHRdepartmentcanalsohelpinaccurateenvironment
scanning and forecasting, and use its knowledge and resources for nearexhausting set of scenarios for the
organizationtoplanfor.

ElementsofEffectiveHRStrategy
OrganizationalStrategy
Vision,Mission,
Competitive
Advantage
ExternalAssessment
InternalAssessment
Objectives,Initiatives
andGoals

HRStrategy

HRFunctions

PracticestoAttract,
MotivateandRetain
employeestoachieve
goals
StrategicIntegration,
Employee
Committment,
WorkforceFlexibility,
andQualityofGoods
andServices

Practicestoensure
complianceand
efiiciencygoals
Relatedandaligned
effortsoganizedto
produceintended
results

Results

Before3selectingastrategyortransitioningintoanewone,itisimportanttostudytheorganisation'sbusiness
goalsanditscompetitivenessintheindustry.

Microsoft:KnowledgeFueloftheTechnologyWorld
Microsoft is considered by many to be an ideal place to work. The company has won several awards for
innovation, for their commitment to diversity, and for their flexible work arrangements. It has always been a
leaderinthemarketwithregardtoitscompensation.Withatotalstrengthofabout80,000 4employees5across
the globe, and a total revenue exceeding $15 billion, it is one of the biggest and bestknown6 technology
companiesintheworld.
Employeeshaveaccesstothemostcurrentresources,fromanintranetwithsourcecodelibrariestoperiodical
libraries to stateoftheart research labs. Their work is personally challenging and on the cutting edge of
technology.Theorganizationbelievesinprovidingtheemployeeswhatevertoolsandtechnologiestheyneedto
achieve the best results possible; and the employees are expected to create software and entertainment
productsthatcouldsellmillionsofcopiesworldwide.Theofficecampusesatmostlocationsareconsideredthe

Personneltoday.com;HumanResourcesinputiskeytomanagingRecessionRisk;29January2008
ItisveryimportanttokeepinmindthatbeingstrategicinHRmeanshavingadirectimpactonbusinessproblemsand
results.So,thestrategywhichislikelytohavethemostsignificantimpactonworkforceproductivityandprofitsshouldbe
selected.
4
BenjaminJRomano;TheSeattleTimes;Microsoftheadcountwayupinlast11months,nearing90,000;June20,2008
5
Microsoftsplantolayoff8,000workersisaphasedlayoffplan,withabout1,500employeesbeingletgoeveryquarter.
(Source:MicrosoftPressRelease;DatedJan22,2009)
6
Microsoftalsoemployeessomeofthemostfamoustechnicalmindsonearth,andownsmorethan15,000Intellectual
PropertyRightsandPatentsforitsproductsacrosstheglobe
3

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benchmarkoftechnologyhubs,withfirtrees,forestedtrails,snowcappedmountainvistas,basketballcourts,
andevenshuttlebusesforemployeestomakeuseof.
EmployeesatMicrosoftarerecognized7astheintellectualfuelandareprovidedwithvariousbenefitplansand
resources, which are designed to retain them. Lisa Brummel, who joined as the Chief of Human Resources at
Microsoft, in 2005, started reshaping the company's HR strategies to make them more innovative and
customized to individual employee needs. The focus was to project Microsoft, from an HR perspective, as an
employeedriven8organization.Asanorganization,Microsoftoffersalotofflexibilitytoemployeestheflexible
workarrangementsandflexiblebenefitplansofferedatMicrosoftareoftenconsideredBestPractices9bymany
employers10.

HRStrategyatMicrosoft
Microsoft Corporation has adopted11 the Performance
CultureModel``asthebest12approachtodriveitssuccess.
All the critical people metrics are categorized and
measured as per the Growth Pyramid shown in Figure 1.
The amount of investment made in external and internal
surveys is very substantial and projects Microsoft as a
leader13inthisregardacrosstheindustry.
Someofthecategoriesacrosswhichthesurveysaredone,
analyzed,andtheresultspublishedarementioned
below14.

Figure1:MicrosoftHRGrowthModel

1. Organisation:Organisationsize,openpositions,
lineHRratios
2. OrganisationHealth:WorkgroupHealthIndex,
MicrosoftPulseIndex,MicrosoftCultureIndex

MichaelA.Cusumano;RichardW.Selby(1995);MicrosoftSecrets:HowtheWorld'sMostPowerfulSoftwareCompany
CreatesTechnology,ShapesMarketsandManagesPeople;FreePressISBN0684855313
8
Microsoftwantedtoprojectitssuccessonbasisofitsemployeeseffectivenessasopposedtobettermanufacturing
techniquesorbettertechnology.(Source:BinitJha,HROperations,MicrosoftVancouver,ResponsedatedFeb02,2009)
9
HRDepartmentatMicrosoftconductsquarterly'bestcompany'days,whenmorethan100companiesvisitMicrosoftto
viewitsHR'bestpractices'.
10
Source:BestPractices,2008;BestPlacestoWorkInstituteInc.
11
ThereareavarietyofHRstrategicmodelswhichareusedacrosstheindustry.However,themostcommonlyusedmodels
arePersonnel,Generalist,BusinessPartner,CallCentre,Outsourced,CentresofExcellence,SelfService,Factbased
decisionmaking,eHR,PerformanceCulture,and,StrategyModels.
12
BChakravarthy;1997;SloanManagementReview;ANewStrategyFrameworkforCopingwithTurbulence
13

SomeoftheinternalemployeesurveysthatMicrosofthasdoneinthelastquarter,andtheirresults,areavailableat
http://www.vault.com.Thesurveysaredoneacrossdifferentdepartments,andthesurveyresultsareanalyzedforvarious
departmentwise,jobclasswise,locationwiseandperformancewiseparameters.
14
Source:BinitJha,HROperations,MicrosoftVancouver,ResponsedatedFeb04,2009

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3. Staffing:Hiringstatstypesofhires,channelwisehiringstats,positionsclosedinternally,hiringspends,
leadtime,%ofhiringplan,netadds,offeracceptancerates,reasonsforofferdecline
4. Talent Management: Good attrition, bad attrition, YOY and QtronQtr tracking, reasons for bad
attrition, % retention of high positions, % of promotions, succession panning indicator, succession
planningusage
5. Diversity:%ofwomen(targetvs.actual),%ofwomenhired,%ofwomentalentlosses,reasonsforbad
attrition, % of women in leadership succession slate, % of Managers and employees completing MS
Diversitytrainingprograms,%ofotherdiversityhiring
6. ManagerCapability:SpanofControl,OrganisationDepth,%ofManagers
7. Learning & Development: Field Readiness Index, number of employees trained on employee
development programmes, number of managers trained through management excellence framework
(that provides for management development through career events, continuous learning and building
connections)
8. LeadershipDevelopment:%ofleadershiphires,%ofleadershipattrition,successionplanningindex(%
ofsuccessorsinstagesofreadinessforaLeadershiprole)
9. Rewards:%ofbudgetusedonrewards
Besidesthis,theyperiodicallyrunmarketsurveystoensuretheircompetitivepositioningoncompensation.
Whiletrackingtheabovemetricshasshownmorerobustactionplanningtoimprovescoresoneachofthem,
there are two that that have made their People Review process much more meaningful ensuring both
organisationalreadinessandtalentmanagement.ThesearetheSPIandtheSPU:
TheSuccessionPlanningIndicator(SPI)thatisdesignedtohelpmeasurehowwelltheorganisationispositioned
withweightingsassignedtoReadyNowandOneMoveAwaysuccessorsforleadershippositions.
TheSuccessionPlanUsage(SPU)isanindexdesignedtoassessboththequalityofthepreviousyearssuccession
plans and whether an organisation is effectively leveraging its succession plans when filling open leadership
positions.Itindicatesthepercentofleadershipteampositionsthatwerefilledduringthepastyearbysomeone
whowasonlastyearssuccessionslate.
In present times of recession15 and organizational restructuring16, what businesses seek of HR is to: a)
understand the talent needs of the business b) help develop strategic plans regarding employees c) identify
talentissuesbeforetheyimpactthebusinessandd)veryimportantly,helpidentifynew17businessstrategies.
AtMicrosoft,theHRdepartmentismadeaccountable18formaximizingthevalueoftheirpeopleassettodrive19
business success. Core HR functions, processes and practices are divided among vertical tower structures for

15

PerthLeadershipInstitute;ARecessionsRoleinLeadershipDevelopment;Feb2008;49
CWLHill,GRJones;2006;StrategicManagement:AnIntegratedApproach;2732
17
Itisimportanttoenvisageandreliablypredictanychangesthatmightoccurinshortandlongrunwhichmightaffectthe
businessstrategyandgoalsoftheorganization.HRdepartmentisexpectedtoforeseesuchchanges,andaccurately
prophesizeanychangesinthepresentorplannedstrategythatthebusinessislookingtooperateunder.Thisisthe
premisedofHRbeingastrategicpartnerofthebusinesswhenitcomestostrategyplanning,designing,and
implementation.
16

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easierandmoretransparentflowofinformation.Therelativelyindependentfunctionsalsoenablethebusiness
needstobemorecloselyalignedandmeasured20fromafunctionunitperspective.
1.
2.
3.
4.

TalentAcquisition&Development
ManagementDevelopment
LeadershipDevelopment
ManagementoftheevolutionoftheMicrosoftCulture

AtMicrosoft,theorganizationalcultureisoftentermedasfacilitativebythemanagementtherearesignificant
investmentsmadeinthedevelopmentofemployees,andmostcurrentsupportisprovidedforoptimumcareer
growth.Theaim21istoreceivethebesttalentwhichispassionate,capable,andgrowthoriented.

RecruitmentandSelection:AttractingtheBestandtheBrightest
Beginning from its initial days, Microsoft has believed in recruiting extremely intelligent staff, favouring
intelligence over experience. Cofounders Bill Gates and Paul Allen shared a preference22 for hiring extremely
intelligent, not23 necessarily experienced, new college graduates dated from Microsofts startup days.
MicrosoftsrecruitmentstrategiesreflecttheirphilosophyMicrosoftisanaggressiverecruiterandisoftenthe
first24companytoofferjobstoelitegraduatesatcampusesandcareerfairsacrosstheworld.
At the beginning, the recruitment strategies at Microsoft included sourcing people from the elite educational
facilities such as Harvard, Yale, MIT, CarnegieMelon and Stanford. Microsoft recruiters would visit these
universities in search of the most brilliant, driven students. Experience was not required and it was in fact,
preferred that new employees had no experience. The selected recruits would undergo a selection process
whichwasfocussedmoreonproblemsolvingandthoughtprocess&composuretestingexercisesratherthan
theactualtechnicalinterviews.Thisinterviewingprocesswasseenasonewhichwouldpushtheintervieweesto
the limit of their creative and analytic abilities rather than their familiarity with a computer programming

18

ThedepthofaccountabilitythatMicrosoftexpectsfromtheHRdepartmentisclearfromthedepartmentwiselistingsof
thelastmonthslayoffsfromMicrosoft.Outof8,000employeeswhoselayoffwasannounced,nearly1,400werefromHR
department,includingShallySteckerl,thenRecruitingDirectoratMicrosoft.InMicrosoftsPressReleasedatedJan22,
2009,HRwasspecificallymentionedintheannouncementaboutlayoffs.(Source:JohnZappe,HRGettingCutinMicrosoft
Layoff;Jan22,2009)
19
DUlrich,WBrockbank,AKYeung,DGLake;2006;Humanresourcecompetencies:Anempiricalassessment;274279
20

InvestmentinHRneedstobedrivenstronglybybusinessneeds.MeasurementoftheimpactofHRpracticesisessential
tokeepreevaluatingtheareasofinvestmentandaligningthemwithbusinessneeds.
21
ConsideringthesheerdiversityofareasthatMicrosoftworksin,itisveryimportantforHRtofetchthebesttalent.The
skillrequirementsatMicrosoftaretraditionallyunique,andcallfordiversebackgrounds.(Source:AnkurGupta,Talent
AcquisitionManager,LiveSearch,Redmond,Responsedated12Feb,2009)
22
FromthebeginningGatesrealizedthathisemployeeswerehisgreatestassets,shownbyhisquotesincludingitsthe
effectivenessofourdevelopersthatdeterminesoursuccessandtakeour20bestpeopleaway,andMicrosoftwillbecome
anunimportantcompany.
23
SLBrown,KMEisenhardt;1998;CompetingontheEdge:StrategyasStructuredChaos
24

Source:PlacementOfferData,2006,2007and2008IndianInstituteofTechnology(IIT).IITengineeringgraduatesare
regularlyconsideredamongthebestintheworld,beingofferedsimilarpayingpositionsastheircontemporariesatMIT,
BerkeleyandHarvard.

JyotiPriyadarshini

language. The importance of hiring the right people is also shown in Microsofts n minus 1 strategy which
meanslesspeopleare employedthan arerequired.This policyreinforcesthathiring theright peopleismore
importantthanhiringjusttofillaposition.
Microsoftretainsthesamebasicprinciplesastheyhaveexpandedbuthadtochangetheirmethodswhenthe
number of new employees required could no longer be sourced only from universities.
Therecruitingpracticescontinuetobeactiveratherthanpassive,withMicrosoftheadhuntingthebeststaff.
Thesestaffarefound,monitoredandrecruitedfromothercompaniesbyover300recruitingexperts.
Thesestaffsactivelyrecruitsuitableemployeesandfocusontherighttypeofpersonratherthantherighttype
of skill level. In Human Resource Management: An Experiential Approach (Bernadin & Russell) human
resourcesaredescribedasanimportantsourceofcompetitiveadvantage.Microsoftuseshumanresourcesfor
competitiveadvantage,basingitssuccessonhavingtheverybest25peopleintheindustryandinspiringthemto
bethebest.ItisthisthatleadstoMicrosoftsuniquerecruitmentpractices.
What is most crucial here is that Microsofts recruitment practices meet its human resource needs. It is an
importantsignofthefocusedapproachofMicrosoft,withitsactionsalwaysleadingtowardsitsultimategoals.
Someimportantfactorstobeconsideredinrecruitingstaffincludethattherecruitershouldbefromthesame
functionalareaandthatcandidatesshouldnotbedeceivedaboutthenegativeelementsofajob.Theinterview
processat Microsoftreflectsthiswith the new employeebeinginterviewedbythemanager.Therecruitment
processalsogoesfurtherthanjustinformingtheemployeeaboutthenegativeaspects,insteadtherecruitment
processactuallyteststheemployeeonthenegative26aspects, puttingthem underthesametypeofpressure
theywouldbeputunderonthejob.

TakingadvantageofMarketConditions
Microsoftalsotookadvantageofbreakingopportunitiessuchascompanylayoffs;oneexampleiswiththeAOL
downsize.TheCEOannounced27thatwhentheyheardAOLwasdownsizingNetscapesoperationsinthevalley,
theyassembledateamtoidentifythebesttalentandgoknockingondoors.

EmployeeMotivation
Thekeytosupportingthemotivationofyouremployeeistounderstandwhatmotivateseachofthem.While
the recruitment and selection process at Microsoft aims to employ people who will be motivated by the
environmenttheyareprovided,theHRdepartmentatMicrosofttakesgreatcaretounderstandsuchneedsand
tryfulfillingthemfortheemployees.Opportunityandenvironmenttoallowtheemployeestoprogressandself
developisapartoftheworkculturethattheHRstaffisexpectedtoadhereto.Thefitbetweenemployeeand
ensures.
organization
is
important
to
motivation
and
this
is
what
Microsoft
A study reported in the Journal of Applied Psychology reports that employees working on projects are more

25

Basedontheimportanceplacedonhavingthebestpeopleintheindustry,theiraggressiveheadhuntingtechniquescan
bejustified.
26
Thisisaneffectivemethod,asitcanbeascertained,thatiftheemployeeissuccessfulintheselectionprocess,theywill
besuccessfulwithintheorganization.
27
AOLLayoffsEndanEra;Oct16,2007;http://www.microsoft
watch.com/content/web_services_browser/aol_layoffs_end_an_era.html

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efficientwhentheirgoalsrelatetotheoverallteamgoalsratherthanindividualgoals(KristofBrown).Microsoft
ensuresthatthegoalsoftheorganizationareunderstoodviaitsstrongcultureandbyemployeesbeingclearly
awareofwhatisrequiredofthem.
Motivation can be described as providing a work environment in which individual needs become satisfied
througheffortsthatalsoserveorganizationalobjectives.Microsoftachievesthisbyincorporatingtheirgoalsinto
theirhumanresourcemanagementprograms.Thepeoplerecruitedandthesystemswithintheorganizationall
servetomotivatethetypeofpeoplethatMicrosoftvalues.
EmployeemotivationcanalsoberelatedtoMaslowshierarchyofneedstheory.Thistheoryhasthetoplevelof
theneedstheoryasselfactualization28needs,whichisaperson`sneedtobeselffulfilled.Thisisexactlywhat
Microsoftprovidesforitsstaffandalsoexactlywhatitexpects,forthemtobetheverybesttheycanbe.The
linkcanalsobeseenherebetweenthetypeofpeoplethatareemployedandwhatisexpected.Microsofthires
theverybestpeople,forthesepeopletoachieveselfactualizationtheyneedtobepushedharderthanmost
andgivengreateropportunitytoachievethanmost.

EmployeeSatisfactionandLoyalty
Microsoftattemptstocatertotheneedsofitsemployeesbyrecognizingthatthemajorityworkforcecomprises
fresh graduates just out of college. This is the premise29 behind Microsoft setting up its offices as campuses
ratherthanplainworkspaceandparkingspacesettingthatwasthenormbeforeMicrosoft.Theenvironmentit
providesalsoincludeseveryemployeebeingfreetodecoratetheirofficeastheyplease;andtheprovisionof
subsidizedfoodanddrink.
Employee satisfaction was also afforded by the opportunity for growth, development also occurred by
encouraginghorizontaltransfers,andemployeeswereencouragedtodevelopthemselvesbyswitchingjobs.Top
managementisrequiredtocoach30lowerlevelsandassistingintheirdevelopment.Thesepracticesaredesigned
to increase employee satisfaction and commitment to the organization, while maintaining the same spirit the
smallcompanybeganwith.
Formanyorganizations,empoweringemployeesisseenasarelativelynewapproachtohandlingandmotivating
employeesonewhichrequiresgradualchangestothecorporategovernmentandtheworkculture.However,
incaseofMicrosoft,itcanbeseenasaninvertedviewwhereintheideaofemployeeempowermentwasan
inherentlyintrinsicpartoftheworkculturesinceitsinception.

28

Maslowdescribesthatthewaytoachievethisistoprovidepeoplewithopportunitiestogrow,becreative,andacquire
trainingforchallengingassignmentsandadvancement.
29
ChristopherABartlett;Microsoft:CompetingonTalent;HarvardBusinessSchool;9300001RevJuly25,2001
30
Thisprogram,whichwasinitiatedduringtheearly1990sduringtherecession,alsobecameknownasturningoverthe
keys.Thepremiseatthattimewastoretainthetalentedemployeesandkeepthemmotivatedbyofferingthemnewareas
oflearningandselfdevelopment.Inthehindsight,however,thiswasauniqueexerciseofemployeeempowermentand
successionplanning,wherethementorwouldteachtheprotgtheskillsandfineriesofapositionbeforemovingontothe
nextpositionandleavingaworthysuccessor.

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Three aspects of tasks that affect job satisfaction are job complexity, degree of physical strain and perceived
value of the task. Microsoft manages31 this by providing the high complexity high achievers require and by
ensuringtheperceivedvalueofthetaskishigh.Thishighvalueiscommunicatedviathehighachievingculture
thecompanymaintains.

EmployeeRewards:TheOptionsdrivenEngine
As an organization, Microsoft still follows the firm belief of its followers in linking employee ownership with
employeemotivationandretention.Criticaltothisisthelinkbetweenindividualperformanceandreward,with
semiannualperformancereviewslinkedtopayincreases,bonusawardsandstockoptions.Theformal32review
systemalsoincludesmorecommonevaluationsbymanagerstoensurenounexpecteddeviations.Thesystem
also includes the process of employees evaluating themselves, these selfevaluations then being sent to the
managerwhodoestheirownevaluation.Theemployeeandmanagerthenmeettodiscussthereview.
Stockoptionsawardsarebasedonwhethertheemployeeisconsideredalongtermassetofthecompanyand
awardedonthisbasis.ThisisanimportantsymbolofMicrosoftscommitmenttoretaininggoodemployees.In
IdeasThatWillShapetheFutureofManagementPractice(Bohl,Luthans,Hodgetts&Slocum)humanresources
isdescribedasbeingthewayofthefuturewithitbeingarguedthatwewillseeamorematurearticulationof
theimportanceofpeopleasafirmsonlysustainablecompetitiveadvantage.Thechangeisdescribedasgiving
highrewardforhighperformancewiththefocusonapartnership.Microsoftrecognizestheimportanceofits
people and this is reflected in the reward systems, in the sense that not only current achievements are
rewarded but also rewarded are stocks to those employees that are seen as valuable future assets of the
company.ThiscanbeseenasaprimeexampleofthefocusonapartnershipthatMicrosoftaimstofosterwith
itsemployees.
Important to the reward system is also the fact that there are two reward paths available, one for those
followingthetechnicalpathandoneforthosefollowingthemanagementpath.Theskillsofemployeescanbe
dividedintothreeareas:conceptualskills,humanskillsandtechnicalskills.Typically,conceptualskillsbecome
morerequiredandtechnicalskillslessrequiredasonemovesupthecorporateladder.Microsoftisacompany
valuingtechnicalskills,duetothenatureofitsproduct.Inmostorganizations,employeeswithconceptualskills
would be rewarded by moving up the corporate ladder, while those with technical skills would not advance.
Microsoft,however,offerstwoadvancementpathsallowingthosewithtechnicalskillstoadvanceastechnical
experts,justasthosewithconceptualskillsadvanceasmanagers.
Rewardsystemsareanimportantpartoforganizationalculture;theycommunicatetoemployeeswhatisvalued
bytheorganization(Robbins,Bergman&Stagg84).Byhavingthesetworewardsystems,Microsofteffectively

Thisissuecanalsobelookedatintermsofanemployeesrole.Therearethreefactorsassociatedwithrolesrole

31

ambiguity,roleconflictandroleoverload.RoleambiguityiskeptlowbyMicrosoftbecauseoftheconsistencyintheculture
andinwhatisrequired;roleconflictisalsokeptlowduetocleargoalsandobjectives;Roleoverloadiskepthigh,with
employeespushedtotheirlimits.Inmostorganizationsthiswouldbeaconcern,butMicrosoftsawarenessofthismeans
thattheyspecificallyseekemployeeswhowillreactwellwithroleoverload.
32

Intermsofperformance,employeesaremeasuredagainstspecificmeasurablegoals,usuallytermedasSMARTgoals
underOrganizationalBehaviourTerminologySpecific,Measurable,Attainable,Resultsbased,andTimebound.

JyotiPriyadarshini

communicatesthatbothsetsofskillsarevalued.ThisisalsoanimportantsignofMicrosoftsconsistency.They
recruitpeoplefortechnicalabilityandsonotrewardingforitwouldbedissatisfyingtoemployees.

Growth&Acquisitions
Duringitslifetime,Microsofthaspursuedanaggressivepolicyoftakeoversandacquisitions.Thisshowsthatas
anorganization,Microsoftisreadytoadaptquickly tomarket conditionsinordertoappealtoitsconsumers.
The company has carried out over 60 acquisitions in the last fifteen years. Its 1999 acquisition of Hotmail
reflecteditsstrongbeliefinthebusinessandHRstrategicneedtodeliverhighqualityservicestoitscustomers,
eveninthefaceofstrongcompetition.Theapproachhasallowedthecompanytoacquirecompetenciesitmay
havelackedifithadfollowedastrategyofinternaldevelopment,andallowedittobringhighqualityproductsto
marketwithinarelativelyshorttimeframe.
Concurrently,Microsofthasstronglypursuedapolicyofinternaldevelopment,placingahighlevelofemphasis
on research and development. The company state in its January 2009 quarterly report that the concept of
serviceoriented,customized,andintegratedinnovationwaskeytostrategy,whichaimstodeliverevengreater
valuetocustomers.Hence,Microsofthasinvestedagreatdealinproductandservicedevelopment.

SWOTAnalysis
Strengths
Existingmarketposition
Strengthofbrand
Financeavailable($60bn+)
NetworkofMicrosoftCertifiedPartners
Opportunities
Synergies
Partnerships&allianceswithPCproducers
Observedmarketchanges

Weaknesses
Maturingmarkets
Lackincredibilitycomparedwithsomecompetitors

Threats
Antitrustlegalcasesfromrivals
Threatfromupcomingonlinebrands
Unauthorised/illegaltradeinpiratedgoods

ReshapingMicrosoftsHRAgenda
Lisa Brummel, who took over as the HR Director in 2005, started the process of leaning and reshaping the
processesanddemographicsatMicrosoft.Whiletheprimaryreasonwastheslippingcompanystockpricesdue
to development problems with its key product Vista, the secondary reason was to plan for the very probable
scenarioofaslowdownduetogrowingpresenceofcompetitorslikeGoogleandYahoo!.
AsanHRDirector,Lisastartedsurveying33allofMicrosoftsupwardof80,000globalemployeesforpickingup
trendsaboutworkcultureandemployeeskillsandcompetencies,andstartedmappingthatwiththebusiness
forecastforthenextfewyears.Someofthechanges34thatwereintroducedatMicrosoftsincethattimehave
resulted in business machinery operating on leaner labour costs as compared to in most part of the last 20
years.

33

Source:Source:AnkurGupta,TalentAcquisitionManager,LiveSearch,Redmond,Responsedated12Feb,2009(Actual
figuresdisguised)
34
MSill;Jan29,2009;RunningHead:MicrosoftCorporation

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One of the recent headlines about Microsoft downsizing by 10% its global workforce generated a strong
response from various quarters. However, in terms of HR strategy, this is an environment which is helping
MicrosoftachieveitsstrategyofbecomingleanerandmoreefficientamovethatwasstartedbyLisaandher
team a few years back. It may be noted that the full time employees who are planned to be laid off only
comprise3530%ofthistotalcut,whichabouttoabout2,400comingintoaphasedplanspreadover2years,
thisamountsto300employeesperquarter.Mostofthebruntwillbefeltbytheelecttowork,parttime,and
vendorcontractedworkers.IntermsofHRstrategy,thiscanactuallyworkinfavourofHRdepartmentsincethe
fulltimeemployeesatMicrosoftwouldgettheunderlyingmessagethatthecompanyvaluestheirfulltimestaff,
andevenindifficulttimesofrecession,almostallofthemwereleftuntouched.Anotherunderlyingadvantageis
thatallthoseemployeeswhowerenotbeingseenasavaluepropositionwiththefuturebusinessstrategycould
belaidoffinthenameofrecession.
What was not noted by the media from the announcements that came from Microsoft same week helps to
affirmmybelieftherewasanannouncementthatMicrosoftwouldbemoving30%ofitsvendorsoffMicrosoft
ownedlocation,andthatMicrosoftwouldnotberenewingitsleasesinover70locationsworldwideamove,
whichinmyopinion,showsthatMicrosoftislookingforwardtobecomemostcostvigilantandcostconscious
organizationthanitistraditionallybeingseenas.

Conclusion
AneffectiveHRdepartmentnotonlyactsasabusinesspartneroftheorganization,butalsohelpsinshapingthe
businessstrategy.ThewaythebusinessandHRstrategyhavebeenintertwinedatMicrosoftisanexampleof
howthebusinessesthatarerunwithcommongoalsandvisionmakemoneyfortheirinvestorsandemployees.
TheamountofinvestmentthatMicrosofthasdoneforitsemployeesandhowwelltheHRManagershavebeen
able to align the work culture to the business strategy is clear from the results the company has posted year
afteryear.Frombeingageeksplayhousein1980stobeingacompanythatisahouseholdnameeverywherein
thecivilizedworld,Microsoftisacompanywhichisadmiredandenviedbyevenitsmostardentrivals.
RecentchangesthathavehappenedatMicrosoft,sometimesattributedtorecession,indicateamovethatcould
changethewayMicrosoftislookedat.Theresultsofsuchactivitiescanonlybeseenoncetheeconomyisback
to upward motion. However, for the time being, the practices and principles that Microsoft stands by can be
admired and acknowledged in true earnest. The loss of public face and reputation36 is a parcel of any layoff
exercise, but an organization which could stand and survive through such times must have doing something
rightwhichothersdidnot.

35

GChallenger,CInc;2009;EEssofarEscapetheRisingTideofLayoffs;3
DJFlanagan,KCO'ShaughnessyJournalofManagement,2005;TheEffectofLayoffsonFirmReputation;74

36

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