PreviewHuman Resources Department at any organization is a crucial and indispensable part of the operational strategy. It can directly affect the results of the organization, and make a very important difference between the success and failure of any organizational strategy or goal, both in the long and well as short term. An efficient HR department should be able to access, forecast, predict, design, and implement its strategies in direct 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 present economic cycle of recession2 at probably its worst for close to 15 years, it is all the more important for the HR department to act as a strategic partner of the business, so as to ensure that the long term and short terms visions and goals of the organization from the financial and human capital perspectives are perfectly aligned and harmonious. At the same time, an efficient HR department can also help in accurate environment scanning and forecasting, and use its knowledge and resources for near-exhausting set of scenarios for the organization to plan for.

Microsoft

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Microsoft: Knowledge Fuel of the Technology WorldMicrosoft 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 leader in the market with regard to its compensation. With a total strength of about 80,000 employees across the globe, and a total revenue exceeding $15 billion, it is one of the biggest and best-known technology companies in the world. Employees have access to the most current resources, from an intranet with source code libraries to periodical libraries to state-of-the-art research labs. Their work is personally challenging and on the cutting edge of technology. The organization believes in providing the employees whatever tools and technologies they need to achieve the best results possible; and the employees are expected to create software and entertainment products that could sell millions of copies worldwide. The office campuses at most locations are considered the benchmark of technology hubs, with fir trees, forested trails, snowcapped mountain vistas, basketball courts, and even shuttle buses for employees to make use of. Employees at Microsoft are recognized as the2

intellectual fuel and are provided with various benefit plans and 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 employee-driven organization. As an organization, Microsoft offers a lot of flexibility to employees - the flexible work arrangements and flexible benefit plans offered at Microsoft are often considered Best Practices by many employers .

HR Strategy at Microsoft

Microsoft Corporation has adopted theMicrosoft3

"Performance Culture Model" as the best approach to drive its success. 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 leader in this regard across the industry. Some of the categories across which the surveys are done, analyzed, and the results published are mentioned below. 1. Organisation: Organisation size, open positions, line HR ratios 2. Organisation Health: Workgroup Health Microsoft Pulse Index, Microsoft Culture Index

3.Staffing:

Hiring stats - types of hires, channel wise hiring stats, positions closed internally, hiring spends, lead time, % of hiring plan, net adds, offer acceptance rates, reasons for offer decline Management: Good attrition, bad attrition, YOY and Qtr-on-Qtr tracking, reasons for bad attrition, % retention of high positions, % of promotions, succession panning indicator, succession planning usage % of women (target vs. actual), % of women hired, % of women talent losses, reasons for bad attrition, % of women in leadership succession slate, % of Managers and employees completing MS Diversity4

4.Talent

5.Diversity:

training programs, % of other diversity hiring6.Manager

Capability: Span of Control, Organisation Depth7.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) Development: % of leadership hires, % of leadership attrition, succession planning index (% of successors in stages of readiness for a Leadership role) % of budget used on rewards

8.Leadership

9.Rewards:

Besides this, they periodically run market surveys to ensure their competitive positioning on compensation. While tracking the above metrics has shown more robust action planning to improve scores on each of them, there are two that that have made their People Review process much more meaningful ensuring both organisational readiness and talent management. These are the SPI and the SPU: The Succession Planning Indicator (SPI) that is designed to help measure how well theMicrosoft5

organisation is positioned with weightings assigned to Ready Now and One Move Away successors for leadership positions. The Succession Plan Usage (SPU) is an index designed to assess both the quality of the previous years' succession plans and whether an organisation is effectively leveraging its succession plans when filling open leadership positions. It indicates the percent of leadership team positions that were filled during the past year by someone who was on last year's succession slate. In present times of recession and organizational restructuring, what businesses seek of HR is to: a) understand the talent needs of the business b) help develop strategic plans regarding employees c) identify talent issues before they impact the business and d) very importantly, help identify new business strategies.

Recruitment and Selection: Attracting the Best and the BrightestBeginning from its initial days, Microsoft6

has believed in recruiting extremely intelligent staff, favouring intelligence over experience. Co-founders Bill Gates and Paul Allen shared a preference for hiring extremely intelligent, not necessarily experienced, new college graduates dated from Microsoft's start-up days. Microsoft's recruitment strategies reflect their philosophy - Microsoft is an aggressive recruiter and is often the first24 company to offer jobs to elite graduates at campuses and career fairs across the world. At the beginning, the recruitment strategies at Microsoft included sourcing people from the elite educational facilities such as Harvard, Yale, MIT, Carnegie-Melon 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 which was focussed more on problem solving and thought-process & composure-testing exercises rather than the actual technical interviews. This interviewing process was seen as one which would push the interviewees to the limit of their creative and analytic abilities rather than their familiarity with a computer programming language. The importance of hiring the right people is also shown in Microsoft's 'n minus 1' strategy which means less people are employed than are required. This policy reinforces that hiring the right people is more important than hiring just to fill a position.

Microsoft

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Taking advantage of Market ConditionsMicrosoft also took advantage of breaking opportunitie s such as company layoffs; one example is with the AO L down size. The CEO announced27 that when they hea rd AOL was downsizing Netscapes operations in the val ley, they assembled a team to identify the best talent a nd go knocking on doors.

Employee MotivationThe key to supporting the motivation of your employee is to understand what motivates each of them. While the recruitment and selection process at Microsoft aims to employ people who will be motivated by the environment they are provided, the HR department at Microsoft takes great care to understand such needs and try fulfilling them for the employees. Opportunity and environment to allow the employees to progress and self develop is a part of the work culture that the HR staff is expected to adhere to. The fit between employee and organization is important to motivation and this is what Microsoft ensures. A study reported in the Journal of Applied Psychology reports that employees working on projects are more efficient when their goals relate to the overall team goals rather than individual goals (KristofBrown). Microsoft ensures that the goals of the organization are understood via its8

strong culture and by employees being clearly aware of what is required of them.

Employee Satisfaction and Loyalty Microsoft attempts to cater to the needs of its employees by recognizing that the majority workforce comprises fresh graduates just out of college. This is the premise behind Microsoft setting up its offices as 'campuses' rather than plain workspace and parking space setting that was the norm before Microsoft. The environment it provides also includes every employee being free to decorate their office as they please; and the provision of subsidized food and drink. Employee satisfaction was also afforded by the opportunity for growth, development also occurred by encouraging horizontal transfers, and employees were encouraged to develop themselves by switching jobs. Top management is required to coach lower levels and assisting in their development.

Employee Rewards: The Options-driven EngineAs an organization, Microsoft still follows the firm belief of its followers in linking employee ownership with employee motivation and retention. Critical to this is the link between individual performance and reward, with semiMicrosoft9

annual performance reviews linked to pay increases, bonus awards and stock options. The formal review system also includes more common evaluations by managers to ensure no unexpected deviations. The system also includes the process of employees evaluating themselves, these self-evaluations then being sent to the manager who does their own evaluation. The employee and manager then meet to discuss the review.

Growth & AcquisitionsDuring its lifetime, Microsoft has pursued an aggressive policy of take-overs and acquisitions. This shows that as an organization, Microsoft is ready to adapt quickly to market conditions in order to appeal to its consumers. The company has carried out over 60 acquisitions in the last fifteen years. Its 1999 acquisition of Hotmail reflected its strong belief in the business and HR strategic need to deliver high quality services to its customers, even in the face of strong competition. The approach has allowed the company to acquire competencies it may have lacked if it had followed a strategy of internal development, and allowed it to bring high quality products to market within a relatively short timeframe.

SWOT Analysis

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Strengths Existing market position Strength of brand

Weaknesses Maturing markets Lack in credibility compared with some competitors

Network of Microsoft Certified Partners Opportunities Synergies Partnerships & alliances with PC producers Observed market changes

Threats Antitrust legal cases from rivals Threat from upcoming online brands Unauthorised/illegal trade in pirated goods

Reshaping Microsoft's HR AgendaLisa Brummel, who took over as the HR Director in 2005, started the process of leaning and reshaping the processes and demographics at Microsoft. While the primary reason was the slipping company stock prices due to development problems with its key product Vista, the secondary reason was to plan for the very probable scenario of a slowdown due to growing presence of competitors like Google and Yahoo!. As an HR Director, Lisa started surveying all of Microsoft's upward of 80,000 global employees for picking up trends about work culture andMicrosoft11

employee skills and competencies, and started mapping that with the business forecast for the next few years. Some of the changes that were introduced at Microsoft since that time have resulted in business machinery operating on leaner labour costs as compared to in most part of the last 20 years. 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 Microsoft achieve its strategy of becoming leaner and more efficient - a move that was started by Lisa and her team a few years back. It may be noted that the full time employees who are planned to be laid off only comprise 30% of this total cut, which about to about 2,400 coming into a phased plan spread over 2 years, this amounts to 300 employees per quarter. Most of the brunt will be felt by the elect-to-work, part-time, and vendorcontracted workers.

ConclusionAn effective HR department not only acts as a business partner of the organization, but also helps in shaping the business strategy. The way the business and HR strategy have been intertwined at Microsoft is an example of how the businesses that are run with common goals12

and vision make money for their investors and employees. The amount of investment that Microsoft has done for its employees and how well the HR Managers have been able to align the work culture to the business strategy is clear from the results the company has posted year after year. From being a geek's playhouse in 1980s to being a company that is a household name everywhere in the civilized world, Microsoft is a company which is admired and envied by even its most ardent rivals. Recent changes that have happened at Microsoft, sometimes attributed to recession, indicate a move that could change the way Microsoft is looked at. The results of such activities can only be seen once the economy is back 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 reputation is a parcel of any layoff exercise, but an organization which could stand and survive through such times must have doing something right which others did not.

Microsoft

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