Microsoft\'s Problem With Human Resources

Microsoft's Problem With Human Resources

Suggested Solutions

The current paper is the sequel of Part One, paper in which I elaborated on Microsoft's human resource problem: its characteristics, causes and implications for the company. This paper will focus on solving the crisis by proposing four alternatives, analyzing them and choosing the one that best meets the company's demands.

Solutions suggested for solving the problem

In a nutshell, the problem Microsoft is facing regards the great number of employees that leave the firm. Basing their decision of finding a new work place on the too long and stressful work hours or the low wages, fact remains that the international corporation is losing on weekly basis good employees. In an attempt to stop these resignations, or at least minimize their number, the managers asked the Human Resource Department to analyze the problem and come up with solutions.

In order to find solutions, the Human Resource Department had to look at the problem from the employees' point-of-view and then find ways to compensate for whatever it was the employees were lacking in.

First, the workers were unsatisfied with their salaries. It is known that the salaries at Microsoft are fair, but tend towards the low end of the average salaries in the software industry. To compensate for this, the marketing department thought of granting employees the right to buy shares and become shareholders.

Second, most employees complain about the long hours they have to put in and how this affects their social lives. To solve these complaints, the HR department suggested sponsorship of several extra curricular activities, such as free tickets to theater or cinema, gym or swimming pool subscriptions.

Third, another inconvenient was brought about by the long hours spend in the company and the fact that these meant more hours away from home, the spouse and the children. Aware of the fact that they could never replace this, the HR department suggested that both employees as well as their families receive full compensation for medical consultations and treatments.

Forth, another dissatisfaction brought about by the low salaries employees were receiving was referring to their rather limited possibility of purchasing a home or a property for their own use. In an attempt to solve this inconvenience, the marketing department suggested the implementation of financial plans within the company.

3. Analyzing the alternatives a) First alternative - granting employees the possibility of buying shares (ESPP)

Given Bill Gates policy of paying "reasonably low base salaries for all employees" (Cusumano and Selby, Microsoft Secretes, p. 116) and the workers' dissatisfaction with this measure, the HR department suggested that the employees be offered other incentives, such as bonuses or stock options. This measure proved highly successful in the past, as in March 1997, "workers realized an estimated 730 million dollars in profits from their Microsoft options. This computed to 32.000 $ per employee." (Justin Fox, Stock-Option Magic at Microsoft, Fortune 136, no. 1, July 7th 1997, p. 54) b) Second alternative - sponsorship of several social activities (SSA)

This method of improving the relationship between the company and its employees, meant to increase the satisfaction one would get from working at Microsoft would imply the following: "health club membership, 5.000$ for adoption assistance, paid maternity and paternity leave, charitable gifts program, tuition assistance, consultations for health, discounts for all Microsoft products and specialized assistance in personal crisis situations."(Microsoft Corporation, http://www.microsoft.com/jobs/benefits.htm, January 31st 1998) Above all these, the corporation could also prepare special programs during which employees would get to know each other better and bond. They could divide the workers in several groups in accordance with their interests: "group of the single parents, working parents, African-American, Attention Deficit Disorder, Korean etc." (Microsoft Corporation: (http://www.microsoft.com/corpinfo/fastfact.htm) c) Third alternative - health care (HC)

To motivate their employee, Microsoft could bare the full costs of medical consultations and treatments for both employee and their family (partner, spouse and children). The sponsored fields covered by the employer would be "medical, dental and vision coverage," with the possibility of signing a contract for "life insurance, short- and long-term disability insurance and a group legal plan." (Roger J. Bartin, Minique Emmanuel, Vicki Lockamy, Sue Lewkowitz and Eva Somaan, Microsoft Case Study, 1997) d) Forth alternative - financial plans (FP)

Aside from the employee stock purchase program (ESPP), Microsoft could offer their employees the possibility of savings. Say for example that a worker could be allowed to "defer up to 15% of salary, with Microsoft matching 50 cents of every dollar" (Microsoft Benefits, Microsoft Corporation, Recruiting Brochure, 0695 Part No. 098-60768). This measure would imply that an employee could "leave" part of their monthly wages within the company. Microsoft could use these finances for further investments and in exchange for them offer employees an interest rate. Employees could get their money back anytime with no consequences.

4. Choosing the most convenient alternative

Paired Comparison Analysis

The Paired Comparison Analysis method helps select from several options the one that is more important, the solution that will offer the most advantages. In applying this method, the Human Resource Department had to elaborate a table having for row and column headings the options available, assigned with letters from A to D. They blocked out the cells where an option is compared to itself and the duplicate cells and then started comparing the alternatives in order of importance, assigning them an importance ratio from 0 to 3.