4. Measurements made to determine when the problem is solved
To identify whether the human resource problem is solved within the company, the managers could request several studies. These studies could refer to the employee fluctuation adherent to the months since the ESPP was made available. Once the fluctuation ratio would be identified, it would be compared to the fluctuation ratio adherent to the same period of the previous year. The HR department would calculate a variation interval in which the fluctuation would be considered normal and then compare the current employee statistics with the previous ones and draw the conclusions.
Another method Microsoft could use to identify the results of the implemented solution would be to engage in conversations with the employees or send out questionnaires for them to fill in and then analyze the responses given. They could ask the workers if they purchased shares and if they did, in what amount, how has their income changed since they became shareholder and how did they see their future at Microsoft.
5. Contingency plan
In the eventuality that the implantation of the ESPP does not have the desired results, the human resource department needs to elaborate a second plan to solve the employee crisis in the company. Based on the results of the Paired Comparison Analysis (part two), the second best alternative to solve the human resource problem would be for Microsoft to elaborate financial plans for its workers. In this order of ideas, the company could offer their employees the possibility of "leaving" part of their monthly salaries in the company for further investments. In exchange for this short-term "loans," Microsoft would pay employees interest rates according to the amount of money left in the firm and employees could get their money back anytime they wished. Nonetheless, these amounts could not exceed 15% of each employee's pre-tax salary (Microsoft Benefits, Microsoft Corporation, Recruiting Brochure, 0695 Part No. 098-60768)
Another method to promote the financial plans for employees would be to offer them assistance with purchasing houses and other properties. Microsoft could help its employees contract bank loans by endorsing them or could even offer the employee the loan themselves, with interest rates lower then the banks'.
Having concluded, in the second part of the paper, that financial rewordings are the most motivating factor for an employee, I believe that, if the ESPP were to fail, the next best option Microsoft should implement, in order to solve their HR crisis, would be the elaboration of financial plans.
6. The criteria for measuring a successful outcome
Considering the initial problem, mass resignation of the employees, the solution implemented would be considered successful once the number of employees that leave the firm will decrease. Based on the statistics elaborated by the HR department, the outcome of the selected alternative will be considered to have achieved its goals when the employee fluctuation will be contained in the variation intervals adherent to the normal fluctuation.
7. Schedule and budget for the ESPP
The implementation of the ESPP would begin in the autumn of 2006, more precisely in September 1st 2006, with the necessary preparation: analyzing the data adherent to employees' interest in becoming shareholders, the approximate number of shares needed, their costs and the actual printing of the stock options.
From January 1st 2007, Microsoft employees would be able to buy shares at he price of 7$ per share, but will not be allowed to invest more than 15% of their pre-tax income.
Elaboration of the budget for 2007 would be based on the price of a share (7$), the number of employees interested in buying stocks and the profits and dividends adherent. I inserted in the following table the approximate numbers for the 4 trimesters of 2007.
No of Buyers
No of shares per employee
Money invested / employee
Total charged by comp.
Costs of shares
For example, an employee that invested in January 2007, 52.2$ to buy 7.5 shares, would register at the end of March earnings of 24$, more exactly he would earn 45.7% of what he initially invested in only three months.
8. SMART goals
Before setting out to take any measures, the company has to make sure their goals are S.M.A.R.T., meaning specific, measurable, attainable, realistic and tangible.
The specific side of Microsoft's goal implies not the outcome of the solution implemented, but the solution itself. The general goal is to motivate employees to work for the company, but the specific goal is to implement the ESPP in order to motivate them.
The possibility of measuring the outcome is another characteristic of the SMART goal. The implementation of the ESPP will be considered successful once the number of employees leaving the firm has considerably decreased.
Making a goal attainable means that the company seeks the means and opportunities of achieving that goal and after several intermediary stages they get closer to a successful outcome. In this case, Microsoft's goal becomes attainable as they successfully implement the ESPP and the personnel fluctuation decreases.
A goal is considered realistic if the company is aware of its existence, is willing to engage in various actions in order to achieve it and has the ability of conducting and implementing the actions necessary to achieving the mentioned goal.
A goal is tangible when it can be clearly stated and experienced. Stating a tangible goal gives the company better chances of understanding and achieving it.
To conclude, I will state the main ideas of the three papers: Microsoft is facing a severe personnel crisis, as many of their employees leave the firm. In order to prevent this from causing unmeasurable damage, the managers and the HR department decided upon implementing the ESPP to motivate their developers. Having compared and analyzed all the available alternatives, the company reached the conclusion that the best motivational factor is financial rewarding. Therefore, by implementing the employee stock purchase program, the workers would be financially motivated and would continue to work at Microsoft, and the firm, on the other hand, would reach its goal of keeping its valuable employees in the company and remain the first and most acknowledged software producer in the world.
Microsoft Benefits, Microsoft Corporation, Recruiting Brochure, 0695 Part No. 098-60768
Rob Landley, Why Microsoft Stock Options Scare Me, posted on February 17th 2000
http://www.fool.com/portfolios/rulemaker/2000/rulemaker000217.html. Ast accessed on July 10th 2006
Roger J. Bartin, Minique Emmanuel, Vicki Lockamy, Sue Lewkowitz and Eva Somaan, Microsoft Case Study
Microsoft Corporation, http://www.microsoft.com, posted January 31st, 1998, last Accessed July 5th 2006