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Microsoft corporation A case analysis

Introduction

Microsoft Corporation is a one of the leading computer software corporations in the world today. It enjoys its success from the fast-rising developments in technology and the further developments of their employees in coping with the rapidly changing environment of the computer software market. Being the envy of most corporations, the company attributes its success in their recruitment process and the picking of the so-called cream of the crop. These top individuals have been distilled into the finest individuals with whom the company built the software empire. The prospect of Microsoft being one of their options is such an honor that it is almost impossible to let go of the offer.

The company claims that their success roots from their policies of accepting only the best of the best employees in the world of software; meaning they only try to get the attention of the top students in every university. The classification of the individuals based on their job experience is also a minute detail in which Microsoft takes pride on. They stated that it is more important to them that a person is “smart” rather than if the person is “experienced”, citing the fact that “smart” people are “once in

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a life time treasures” that should be recruited immediately.

Furthermore, the company also boasts of very good employee benefits. Bill Gates stresses the point of employee care under his wing in the field of his company. Benefits ranged from the cafeteria subsidy in his company location (called “campus”) to the stock options that are offered to certain employees that are valued as assets to the company in the long-run

            The company also stresses the practice of “learning from mistakes.” A leader of a failed project is appointed to be a leader of another project, hoping that the employee has learned his or her lesson and would avoid the occurrence of that mistake to happen again. Bill Gates firmly believes that mistakes that would earn a “fired” decision in other firms should earn another chance in such a way that the employee would still think highly of himself and the morale intact.

Through the years, the growth of the company was accompanied by the growth of the number of employees. The “smart” person being watched was expanded and now reaches not only to neighboring country Canada, but all the way to Japan. Thanks to the company expansion, other universities are also given the chance to raise a “smart” person that would be part of the world’s biggest software producing company.

The company also believes in a more involved approach in dealing with his recruits. Fresh recruits are being called by Gates personally, informing them of the company’s intention of hiring them. This makes the recruit feel that the company is indeed interested in their skills and talents. Bill Gates also plays a major role in promotions of employees that are placed at the lower levels of the organization.

The human capital management of Microsoft Corporation is one of the finest human capital management in the industry today. However, the company adjusts to the rapid changes that accompany the change in the industry. With this, new policies are made and seem to test the companies’ successful policy before. A closer look would seem appropriate to study the effects of these changes to the human capital management of the corporation.

II.                Analysis

1.         The components that comprise the human capital strategies of Microsoft are the “learning process” principle, the multiple ladder promotions, improvement of workplace, the stock option bonus, the preference of the “smart” from the “experienced”, and the “welcoming hand” for ex-employees. The “learning process” principle is the fact that when an employee makes a mistake, he has the task of finding out want went wrong and what things he should consider to be a learning experience for him. A special session is made for employees devoting their time in realizing the lessons they learned from failed projects and unaccomplished goals. The employee is also appointed to another task and applies the learning experience he had. If the project fails again, he would then be appointed to another. The ultimate goal is for the employee to learn.

The multiple ladder promotions tends that the employees in all levels of the organization get promotions. It gives the employees a sense of self-worth and is a good motivation on the part of the company to make that kind of move. The employees felt that the company has trusted them and that they thought that in turn, they would give their very best for the company; in hopes of having them promoted again. It also helps sustain the motivation in every employee since the prospect of a promotion is on every employee’s mind.

The improvement of the workplace constitutes providing employees with office spaces that are encouraged to be decorated to the taste of the employee; caffeine products are free of charge at the cafeteria; food subsidy on other cafeteria products; and the whole headquarters was designed to look like a university campus (hence the name “campus” for their headquarters). This was all designed to make the employee feel like at home while working. This also gives the employee the feeling of not leaving college; imagine having to work in a headquarters that looks like their university.

The stock options bonus was opted as another reward scheme in which, instead of cash incentives, employees are made “partners” of the company by giving the employees stocks of the corporation. In this way, the employees are motivated to work harder for the benefit of the company, in which they are part-owners. By doing so, the motivation of the employee would be diverted from cash to the actual development of the firm’s operations.

The recruitment process also makes use of the preference of the “smart” from the “experienced”. Bill Gates argues that some people are really smart and these come “once in a lifetime”. Also, in the world of constant development such as the software industry, the valued people are those people capable of innovation. These people are the smart people, according to the company.

The “welcoming hand” for the former employees, who went to other companies and eventually returned, is a good measure of Microsoft’s care for their employees. This makes the employee feel that he belongs to another family and that’s exactly how Microsoft makes them feel.

These actions are diverted towards specific human capital management like the avoiding of dissatisfaction on the part of the management. Dissatisfaction would lower the morale of the employees causing the productivity and creative ideas to go downhill. Avoiding such would ensure the company that the productivity is in a continued pace.

In addition to that, the effective human capital management of the company allowed not only operational success and customer satisfaction but also the ultimate endpoint of financial growth. The rise in the value of the firm in the latter years of the 1990’s was due to the insisting effectiveness of the human capital management of the firm.

The main idea pointed out is that everything would boil down to the good leadership that the company exhibits. Once they view an act as something out of the culture of the company, employees would not care and would not bother if it amuses them or not; the only factor that would be important to them is that the company exhibits its culture that way and that it is not something out of bad governance.

Since one of the best ways in which the company would have to manage is through its people, one of the key decisions would be choosing the right people for the job. A job cannot be accomplished well and be explored to its full extent without the fully competitive worker in which the job should be assigned. However, assigning the right person for the job does not only denote the idea that they have to see past experiences like when Microsoft originated its idea. The main argument in the creative industries of software production is that the person should be a visionary; and his educational quality is one of the main reasons in which the company would think that the person is capable of the twists of the company’s needs.

However, Microsoft is not the same as the other companies that also seek the brightest of the youth. But what sets them apart is that the overall image of the company is that it proves to belong in the creative industry, where companies cannot dwell well when they only imitate and copy other strategies. Microsoft did not seek to imitate; they sought to set the trend.

Another fact is that the company makes one another feel like family. Coaching and teaching of other workers have deeply penetrated the culture of the company that it has become a trait of the employees to feel responsible towards the other less capable employees, or the employees that cannot cope with the pressures of the workplace. However, the factor of this would also be dependent on how the workers feel about change. Some people think that they do not want to change the working capacity and the load; to remain the same which makes change a hard thing. Another reason for the resistance of change would be if they think that they are happy or satisfied with their jobs that they do not want to destroy the routine they have. The retention rate may well be explained by these factors that it is near impossible to change the way people have become attached to their work routines.

The coping mechanisms employed by the company somehow did well as the employees of Microsoft before that went to other companies wanted to return due to the fact that they wanted to be a part of the organization again and that they can manage the change with apparent ease since they have worked with the company for some time.

The company also took note that although the human capital is a scarce resource, it can be allocated in such a way that it would be possible to have a zero-sum, in which the number of employees needed across a specified ladder is zero.

2.         In all of these things, Bill Gates was right for a fact that the management of human capital is their competitive advantage since they recruit the “smart”, filter them accordingly and in the end, make them stay when they were hired. This is a competitive advantage in the software industry since the employee would feel that they have made the right choice, especially when it comes to the “learning process” principle. The employees in the company of Microsoft were highly motivated and geared towards a goal. And in addition to that, the employees are given the performance guidelines acronym SMART, which means Smart, Measurable, Attainable, Results-based and Time-bound. This acronym would make the learning process easier for the employees since this would help them analyze in which step of the way was a discrepancy present; resulting to the mistake. Furthermore, this makes the company of Microsoft more employee-oriented, making the employees motivated in giving their best to attain the company goals and adhere to the main principle of Microsoft.

            The processes by which the company handles its employees is also startling in a way that Bill Gates actually found a way in which the employee would be very much comfortable with the working environment. This proves to be of benefits to the employee as they would tend to let out their creative influences by which the company thrives in: creativity.

            Furthermore, the company recognizes the fact that the employees need ties to each other in a more personal note in order for them to work in sync. It would also help them be more comfortable with each other and lessening the barriers that alienate one another. The development of which helps fully on the marketing strategies indirectly, by influencing the workers to work harmoniously and creatively with one another. For a company that works in a creative industry, the positive marketing effects of the policies surrounding the employees have a great impact on their development of the product and the allowance of a more personal touch into each of the software manufactured.

3.         Microsoft’s strategy is good in the part that they choose the brightest of the students in colleges and non-colleges, but giving them the opportunity to work in a working environment that mimics their student life. A good working place, in combination with the benefits that the company offers, is a good offer that the job-seekers cannot resist. They also hold on to contacts like those of interns who have not yet finished college. In doing so, they would be able to monitor the developments of these students and in the end, choose the best. They also lure prospects with the tempting promotions that employees undergo. A promotion is enough motivation for a prospect to grab the chance and be guaranteed promotion in just two years; provided that he works hard for it. The drawback however, in this strategy is that, the offers of Microsoft are lower than those of its competitors. Although the benefits are good, the higher price of other corporations may prove lucrative as this is a certain measure of the value of an employee to a company. This may serve as one loophole in which one of the brightest prospects that Microsoft wants would be opting for a corporation with higher wages. Another drawback is that the company opts rookies from experienced people that may contribute to the company’s development. Although the company develops under the rookies, it also pays to hire experienced people that can bring innovation to the firm. And lastly, there is still no assurance that once a bright rookie gets in the company, he would work for the company all his life. The company would still have to adjust to some facts that the employees may not find that amusing to their level of skill.

            The main points regarding the recruitment process of Microsoft is that they make their recruits understand the values that Bill Gates is trying to point out. With the filtering of the individuals, the company is assured of not only the very best, but the people that are needed by the company. Furthermore, the new employees are instructed and taught to comprehend the fact that they have to work cohesively in order for them to bring out the creative drive in which lay inside them. They are also given the choice on whether to take part in a company that is not only time-consuming in nature but also very stressful: work-related stress is very common in the midst of the old employees and yet they seem to cope, making Microsoft realize the need for people of such caliber.

            But what Microsoft really took advantage of is the fact that the well-being of the individual is pursued. For one, college students may never be over the fact that they tend to be alcoholic; making Bill Gates decide on making products with caffeine free in his working area. The improvement of the office of the individuals encourages workers that they can work in whatever possible type of office they want. And lastly, the lure of the high stock options is really lucrative in the sense that the employee may have the chance to be a part-owner of the company in which he has worked for diligently. These factors make offers of Microsoft very much attractive despite of the fact that they are offering lower salaries than the competition.

            And as a final note, the company also took advantage of the fact that inertly, people would want to exceed the expectations reposed in them. If however, that the employee cannot keep up, it would only prove that he should not be part of the company. The highly grueling screening process of the company ensures that the individuals that they take in are highly capable of themselves and to recover from stress and pressures.

With this strategy, Microsoft has a good way in managing their personnel since they try to give the comforts of life to the personnel, at the same time, trying to give them the normal pressures of work. This gives them the idea that they still have to work hard to attain larger responsibilities in which, they would still have to explore their real limits. This also entails them to want to achieve higher positions and when they do, work even harder to attain more. People work hard when they come on board to Microsoft because they are highly motivated. The motivation schemes of Microsoft are so good that the personnel would want to prove that they were really meant to be an employee of Microsoft. Furthermore, the lucrative offers of promotion are also hard to resist, making them work hard to be promoted to positions that they would work even harder for. The limitation of this, however, is that the strategy cannot guarantee retention of personnel. Whether the company wants it or not, people would still leave the company for a variety of reasons.

            On the technical note, the management somehow practices a certain resistance to change since the company has been adamant to change the strategy that has worked for them through the years. In accordance to that, the resistance made by the management also meant that the company would want to take the strategies that were made by their founder Bill Gates. Thinking that it was the best way to managem human resource, some people did not want the idea of changing the company policy. The resistance they put up was significant to drive the management to change only years later.

4.         The record on retention for Microsoft, on the other hand, is a very good reason in which it strengthens the fact that Microsoft has a good way of managing its personnel. It is also an indication that more employees of Microsoft are happier in the company rather than working elsewhere. Personnel who have turned to millionaires continue to work for the company because the value of loyalty is instilled in the employee that they still work for the firm although they know that they can now afford not to work. In addition to that, the motivation of the company is still good at that level of the organization that you’ve grown to love the pressure that the work entails and the benefits of the company has grown into you, making it hard for you to leave.

            Furthermore, the empowerment of the individuals and the reinforcement of their thinking make the company even stronger. Personnel are trained to think that they work not only for Bill Gates’ company, but also their company. It is cohesive to the rewards of stock that make it a prospect for individuals to work hard for the company. They reinforce the feeling of responsibility to the employees in an effort to make them care that whatever they may be doing, it is very important to the company.

5.         Microsoft adapted its strategies very well in its growth stage that the company’s sight has turned not only in the universities and colleges of the United States, but also of neighboring country Canada, and even the technologically advanced country of Japan. It made sure that the company would have enough people that would still cope with the growing market of the company and that they would not lag behind any company. The problems in the case however, start with the rate of their retention that they wanted to increase further, accompanied by the change of the environment that they wanted to adjust to. The upper management decides that the company is in need of change to accommodate the rapid change that the company is going through. The change was also good in a sense that, the personnel are still motivated in accomplishing their goals. However, the change in some strategies of the firm deviates from the main principle of Bill Gates especially that of not having to hire those with experience but that of the brilliance.  The company decided to hire someone of experienced background, like Robert Herbold. Although the company was in a point successful, it still does not negate the fact that the company has been deviating from the previous ideology of Gates. However, as the company goes to the development of its environment, the company itself is undergoing growth. But the main problem of the company rooted in the fact that uncertainty hit them in 1999, which resulted to a lower morale for the employees. To add more problems, their COO, Chief Operating Officer, was a “non-techie” and he was relatively a newcomer. The uncertainty level was not lowered with this, but on the move that Gates became the Chief Software Architect. With this, the employees seemed to lighten up and take the challenge offered by the times.

            The growth stages of Microsoft also adapted the strategies since the employees then were more inclined to the idea that they have to change some strategies in order for the company to really survive. CEO Balmer was the first to realize that the change was necessary even before, but did not materials due to the prospect that the employees do not want to change their routine: status quo. Furthermore, other classifications of resistance have been present especially the prospect of personal losses. Since the company made their employees part-owners, the self-interest of each would want to be at the front, causing Microsoft to rethink its strategies.

6.         The moves and actions made by CEO Steve Ballmer were of significant natures. Addressing the strengths, He made his own team of experts in finding ways in which the retention of employees would rise. With this, he began studying and implementing steps in which the employees may be more willing to stay than go out and try to find another company of their liking. Another good move was the making of executives as partners of the firm. With this, the company would be given assurance that the right decisions would be made and the position of the experts would be addressed. This was a smart move in dealing with low-morale employees, with respect for their feelings of uncertainty. The appointing of the new vice-presidents was a also a good move as it raises the morale of other workers with the impression that although there is uncertainty in the external environment, the company is doing its best to cope with the growing changes.

The move is also directed to the goal of harnessing more talent in the organization other than those present. The harnessing of talent is a good move because the company would therefore be able to identify new ideas other than those mentioned during the meetings. This would also ensure that the other branches of the firm are still operating at its best. The creation of new job titles is also a good move because the employees would have another goal in which they can put their mind into. With this, the employees would not only vie for the attainment of the title, but also the level of responsibility that the title offers. The title “Distinguished Engineer” entitles a technical expert to be of the same level as the other vice presidents. Explaining further, the technical people of the company would work harder in order for them to attain such title. And the last strength was the welcoming of ex-employees, in which the company treats as family. More employees went back to Microsoft because of the loyalties instilled in them.

This somehow would lessen the uncertainty from the new workers since this means that the company has taken care of the ex-employees so much that the employees opted to return rather than remain in the company they served. The weakness however of the management, is that they have turned to changing the previous ideals that the company has been known for. Although it was made for the changes in the environment, especially of the uncertainty that went on, the ideals that made them recruit bright rookies was changed in order for them to harness other ideas and talents in the organization itself. They also treated the departure of the employees as a form of cleansing, in which they should not, because this may entail more sense of insecurity among workers that the company would not value them and would not care if they leave the company or not.

            The new CEO also managed the problem of having people that lack the necessary management skills by training more people in which the prospect of being a manager is highly attractive. The main goal is to pick out the people in which the management skills are very evident and assign them to the necessary management process that the company then, lacked.

III.      Conclusion

Microsoft Corporation has to remain in the competitive edge of the market despite the fact that there is still high attrition rate according to them. They also need to raise the morale of their personnel further in order for them to be further motivated in working their best towards the goal and objectives of the firm. And lastly, the firm has to continue the values that were taught to them by Gates because this were the values that built the corporation, and should retain it as a guiding principle or a motivational tool for old and new employees alike.

The changes and the coping mechanisms of the employees and the management of Microsoft blended with each other to commit the common goal of the achievement of the increase in productivity and the forwarding of each of their interests.

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