The case examines the employee motivation and retention strategies of the US based Microsoft Corporation (Microsoft) Since its inception Microsoft was appreciated for its employee-friendly HR practices However during the late 1990s as the company was growing rapidly in size it lost the popular elements of its work culture Moreover several racial discrimination lawsuits and antitrust proceedings affected the companys corporate image and financial performance adversely In the early 2000s in order to improve its profit margins Microsoft started cutting several employee benefits which demotivated its employees To boost the employee morale in 2006 Steve Ballmer the then CEO of Microsoft appointed Lisa Brummel as the Senior Vice-president of HR

After taking charge Brummel announced a plan to significantly revamp some of the existing HR management practices at the company She announced a plan named myMicrosoft which included developing appropriate systems to enhance communication between the employees and the HR department making changes in the companys performance review system introducing several new employee benefits and designing new workplaces in an effort to attract and retain employees The case analyzes in detail the HR initiatives taken by Brummel It ends with a discussion on the benefits realized from the initiatives implemented by her

On May 18 2006 Microsoft Corporation (Microsoft) the US-based multinational computer technology corporation announced a plan to significantly revamp some of its Human Resource (HR) management practices

The plan named myMicrosoft was aimed at addressing employees concerns and at boosting their morale According to the plan the company intended to change its performance-review system increase allotment of stock options introduce new employee benefits etc

Commenting on the plan Lisa Brummel (Brummel) Senior Vice-president Human Resource Microsoft2 said [myMicrosoft] will help us continue to attract develop and retain great people drive success and stay competitive3

Since its inception Microsoft had been considered to be a great place to work for Because of its work culture generous compensation and benefit programs the company was able to attract and retain the best talent However as the company grew rapidly in size it lost the popular elements of its work culture according to HR experts

In addition several racial discrimination lawsuits and antitrust proceedings had affected the companys image severely and reportedly demotivated employees

The history of Microsoft can be traced back to April 1975 when William H Gates (Gates) and Paul Allen (Allen) founded the company at Albuquerque New Mexico US As its first project the company developed a programming language Altair BASIC an improved version of BASIC for the Altair 8800

During the late 1990s Microsoft grew rapidly in size Elements of its work culture which had been popular during its initial years of inception such as a challenging work environment culture of risk taking and innovation were no longer encouraged within the company

After assuming her new role at Microsoft Brummel changed the approach toward managing HR at Microsoft The previous HR approach was reportedly more like a one size fits all model in which all the employees had to follow the same system

With the changes in the HR management practices Microsoft was able to boost employees morale The employee attrition rate went down to 83 percent in 2007 from 10 percent in 2005 Some analysts attributed this success to Brummels attitude toward dealing with the problems

Issues

Study the corporate culture and HR practices at Microsoft

raquo Analyze the problems faced by Microsoft on HR front during the late 1990s and early 2000s

raquo Evaluate the measures taken by Brummel to motivate employees

raquo Discuss the benefits of the strategies implemented by Brummel

raquo Appreciate the importance of recruiting the right people for a particular job

• Issues