Knowledge Fuel of the Technology World HR Strategy at Microsoft
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Preview Human Resources Department at any organization is a crucial and indispensable part of the operational strategy1. 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 nearǦexhausting set of scenarios for the organization to plan for. Elements of Effective HR Strategy Before3 selecting a strategy or transitioning into a new one, it is important to study the organisation's business goals and its competitiveness in the industry. Microsoft: Knowledge Fuel of the Technology World 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 leader in the market with regard to its compensation. With a total strength of about80,0004employees5 across the globe, and a total revenue exceeding $15 billion, it is one of the biggest and bestǦknown6tech nolog y companies in the world. Employees have access to the most current resources, from an intranet with source code libraries to periodical libraries to stateǦofǦtheǦart 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, snowǦcapped mountain vistas, basketball courts, and even shuttle buses for employees to make use of. Employees at Microsoft are recognized7 as the 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 employeeǦdriven8 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 Practices9 by many employers10. HR Strategy at Microsoft Microsoft Corporation has adopted11 the ³Performance Culture Model`` as the best12 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 leader13 in this regard across the industry. Some of the categories across which the surveys are done, analyzed, and the results published are mentioned below14. 1. Organisation: Organisation size, open positions, line HR ratios 2. Organisation Health: Workgroup Health Index, 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 4. Talent Management: Good attrition, bad attrition, YOY and QtrǦonǦQtr tracking, reasons for bad attrition, % retention of high positions, % of promotions, succession panning indicator, succession planning usage 5. Diversity: % 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 Diversity training programs, % of other diversity hiring 6. Manager Capability: Span of Control, Organisation Depth, % of Managers 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. Leadership Development: % of leadership hires, % of leadership attrition, succession planning index (% of successors in stages of readiness for a Leadership role) 9. Rewards: % of budget used on 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 the 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 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 talent issues before they impact the business and d) very importantly, help identify new17 business strategies. At Microsoft, the HR department is made accountable18 for maximizing the value of their people asset to drive19 business success. Core HR functions, processes and practices are divided among vertical tower structures for easier and more transparent flow of information. The relatively independent functions also enable the business needs to be more closely aligned and measured20 from a function unit perspective. 1. Talent Acquisition & Development 2. Management Development 3. Leadership Development 4. Management of the evolution of the Microsoft Culture At Microsoft, the organizational culture is often termed as facilitative by the management ± there are significant investments made in the development of employees, and most current support is provided for optimum career growth. The aim21 is to receive the best talent which is passionate, capable, and growthǦoriented. Recruitment and Selection: Attracting the Best and the Brightest Beginning from its initial days, Microsoft has believed in recruiting extremely intelligent staff, favouring intelligence over experience. CoǦfounders Bill Gates and Paul Allen shared a preference22 for hiring extremely intelligent, not23 necessarily experienced, new college graduates dated from Microsoft¶s startǦup 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, CarnegieǦMelon and Stanford. Microsoft recruiters would visit these universities ³in 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 thoughtǦprocess & composureǦtesting 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 µn 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 retains the same basic principles as they have expanded but had to change their methods when the number of new employees required could no longer be sourced only from universities. The recruiting practices continue to be active rather than passive, with Microsoft µhead hunting¶ the best staff. These staff are found, monitored and recruited from other companies by over 300 recruiting experts. These staffs actively recruit suitable employees and focus on the right type of person rather than the right type of skill level. In µHuman Resource Management: