For example, in 1988, Microsoft hired 2221 employees and registered a growth with 122% (a total of 4037 employees), but the following year 31% left the company, remaining only 2793 (Cusumano and Selby, Microsoft Secrets, p. 3) After having analyzed the statistics, the managers conducted several studies within the company to try and identify the reasons why so many people were leaving Microsoft. Those who participated in the studies responded that "the pace was too frenetic," they felt obliged to work more hours than they were comfortable with, new employees did not receive the proper training and the salaries were not equitable (Cusumano and Selby, Microsoft Secrets, p. 465-467)

7. Effects of the problem on the organization

If the personnel crisis were to continue at Microsoft, the consequences would be severe for the company. They could lose their best employees, diminishing the quality and quantity of their products and damage their reputation as the best and largest software producer in the world. These would eventually lead to the deceasing number of Microsoft consumers and unavoidable bankruptcy.

8. The extent to which the problem can be solved

It is very difficult, if not impossible, to foresee the exact extent to which the human resource problem could be solved, but it most definitely can be adjusted and kept between the limits considered normal by the personnel fluctuation standards.

9. Causes and forces that influence the problem

Based on the studies conducted within the company, the main internal causes stated were the alert rhythm of work and the relatively low salaries. The external force that aggravated the crisis was the general lack of specialized IT developers. In 1997, Michael Murray, Microsoft's vice-president for HR, told the Senate Judiciary Committee "The entire industry's continued growth and success has been threatened by a severe and very real skills shortage" (Patricia Wilson, "Tech Firms Seek Foreign Employees to Fill Void," Reuters Service, February 26th, 1998)

10. The applicable components of Critical Thinking

Conceptualizing the problem

Given the great importance and implications...

The great number of employees leaving the firm and the reduced number of IT specialist in the workforce would eventually cause several difficulties: loss of customers due to the decrease in the quality and quantity of the products and reduction of the company's revenues.
Analyzing the problem

In order to better understand the crisis of human resources, the company had to pay close attention to all details regarding it: the causes that had brought it about, the way in which it was manifesting and the consequences it had on the company as a whole.

The hard working long hours and stressful environment at Microsoft, combined with the reduced number of specialized IT developers on the market, and the continually growing demand of such workers were the main causes that led to the human resource problem in the company. The poor management of the personnel led to complaints and dissatisfactions among employees, which eventually materialized in many resignations.

It is easy to imagine that the consequences of mass resignation would have been disastrous for Microsoft: loss of employees, damage of reputation, loss of clients and decrease in revenues, which could have brought the company to bankruptcy.

Evaluating the information gathered

Based on the information gathered throughout various channels (communications with the employees, studies on the workforce field), the managers realized the gravity of the problem and decided to compensate for the long hours, the stressful environment and the low wages with several incentives: bonuses, sponsorship of social activities and possibility of becoming shareholder.

Bibliography

M.A. Cusumano and R.W. Selby. Microsoft secrets. Free Press, 1995

Microsoft Corporation, http://www.microsoft.com, posted January 31st, 1998, last Accessed July 5th 2006

Patricia Wilson, "Tech Firms Seek Foreign Employees to Fill Void," Reuters Service, February 26th, 1998

Roger J. Bartin, Minique Emmanuel, Vicki Lockamy, Sue Lewkowitz and Eva Somaan, Microsoft Case Study