Microsofts Human Resource Strategies - Case Study Example

Microsoft’s Human Resource Strategies Based on Annual Report Microsoft’s Human Resource Strategies Based on 2013Annual Report Microsoft Use of Human Resource Management Strategy to Support Its Business Strategy Microsoft is among the richest and most successful organizations globally partly due to its human resource management strategy. The company is a worker driven organization besides the advanced technology and efficiency of the machines. Microsoft prides itself in the efficiency of workers to achieve its set business and corporate strategies. The working force is boosted every year through a variety of methods that enhance efficiency. According to the 2013 annual report it adopted a new organization structure that involved workers handling projects in teams. The human resource department strategized on using teams organized around function other than product development. The company used the strategy to boost the effort of engineering, marketing, sales and finance departments to increase efficiency, capability and efficiency (Microsoft.com, 2014). The chief executive officer also identified prompt communication and utmost attention to workers as the only way to achieve to business strategy dubbed One Microsoft. The company was focusing on creating a family of devices, products and services for both businesses and individuals. Subsequently, it intended to reach out to customers at workstations, on the go and at home globally on a high-value platform (Edward, 2012). The company depended on its workforce that had been organized in teams to achieve its goal starting July 2013. The human resource department at Microsoft strategizes to retain, recruit and deploy talented workforce. It has expanded its high-value workforce around the world to include 93000 employees around the world. Every departmental leader is supposed to take control of a small amount of projects that are spread across 100 countries. The leaders are required by the Microsoft Human Resources to live up to the strategy to take command of the project portfolio. The projects are further broken down into small projects to allow human resource department to coordinate and assign proper time for the tasks. The 2013 annual report reveals that the human resource strategy has enabled Microsoft to unveil advanced projects such as 2010 Project Server, improved consumer services such as Bing and Skype and advancements to Microsoft Dynamics, Office 365, Windows Server, Azure and Xbox (Microsoft.com, 2014). The strategies have resulted to a business platform that provides better devices and services faster and efficiently. The human resource management strategy of Microsoft enhances accountability and transparency. The strategy has influenced Microsoft’s departmental workers to fast-track their assignments by means of project website application. Workers take collaborate and undertake their projects with transparency. The achievement has seen the success of prime products and services such as Windows 8 operating system. The company has received positive responses from users worldwide. The success of the operating is an indication that Microsoft Human Resource Management strategies have a profound effect on the business plans that the company sets forth ever year. Microsoft Leverage on Human Capital to Boost the Financial Performance Managing a workforce of at least 93,000 has been a significant challenge for Microsoft given the geographical disparity between its centers. The growth and success of any well-to-do company depend on how well it can contend with the human capital challenges (Edward, 2012). Leveraging human capital becomes the easy way out in order to attain the financial goals that have been set by the company management. The task rests with the human resource department that must ensure that workers are performing duties efficiently and timely. Microsoft has re-aligned the workers with development responsibilities other than develop many products without compelling quality. Microsoft’s 2013 annual report revealed that the company would only retain, and a large, talented and motivated workforce spread across the world. Further, it has foreseen a remarkable improvement in its overall financial performance if it leveraged its workers by encouraging them to work with functions rather than dealing with individual products. June 2013 saw the company employing workers on a full-time basis to meet the financial goals set by each department. Microsoft employed 99000 people from United States and international centers (Microsoft.com, 2014). Microsoft distributed the workforce across all the departments that generate revenue for the company. Out of the old and new employees, 37,000 employees in the human resource departments have been charged with product research and development to increase reception of the products and services it has unleashed on an annual basis. Moreover, the departments of support and consulting services and general administration are manned with the most qualified employees who can retain and attract new customers. According to 2013 annual report, Microsoft has generated significant revenues from developments, licenses, and support for a myriad of software products such as Microsoft Pro and Xbox. Cloud-based services for businesses and consumers have been identified as an important cash cow for Microsoft (Microsoft.com, 2014). The company has seen it wise to invest in human capital by compensating employees for competitive salaries. The company admitted in 2013 to have made a significant expense of retaining employees who have been the leading contributors to the success of designing, sales, manufacturing, and marketing. The company announced a major realignment in July 2013 to become more competitive compared to other technology-based firms. The development of competing cloud-based technologies and operating systems has offset significant investment opportunities for the company. Microsoft realigned itself with a workforce that can work in teams and with competing salaries. It has relied on the talented workers to keep a check on the operating costs and operating margins. The company owes its success on the qualified employees it recruits on an annual basis. Microsoft ensures that it has used the knowledge of university graduates with computer technology worldwide. The company has continued to employ resources and competitive compensation to offset the cost of hiring incompetent employees. With the revenue of the company fluctuating quarterly, the company hopes to bounce back by adjusting the current employee compensation program. Impact of Legal and Regulatory Environment on Microsoft’s Human Capital Management Every organization has to keep up to date with legal and regulatory measures in order to remain compliant and evade penalties (Pankl, 2010). Microsoft operates in a legal and regulatory environment that affects how it manages human capital. States require the company to have a transparent process of compensating employees. Microsoft’s success depends on the employees who have organized in teams since 2013. The company employs talented and competent employees from United States and across international boundaries. In each state, the company is expected to provide fair compensation package, safety and security, wage for the time worked and family and medical leave. Microsoft also deals with unique expertise in its human activities. The expertise must be protected by state privacy, copyright and contract rights to give the employees a fair chance in the organization. Expansion oversea requires a company to comply with global laws in a foreign environment. The practices of Microsoft are different from country to another. It has managed to spread its wing to 100 countries, and each has its unique set of business laws that Microsoft should take note of to avoid conflicts with the employee being managed. The local laws in each foreign country dictate how human resource managers in each will manage the employees. Microsoft ensures that it has hired employees locally to avoid any travel or international assignment hitch (Microsoft.com, 2014). The company’s manpower has been directed to the creation of cloud computing services to compete with other established platforms. The company admits in the 2013 Annual Report that it has become challenging to regulate cloud computing in different countries. The cloud platform is set to harness a large pool of data that contains confidential information. Microsoft intends to train its employees in order to comply with data protection laws stipulated by the European Union Data Protection Directive (Microsoft.com, 2014). The company also collaborates with the government agencies to resolve data protection issues that may arise in the workforce. The Company’s Hiring and Employee Retention Strategies Microsoft has stayed ahead of the park by unveiling hiring and retention strategies that favor its team of employees. The company as transformed into a global empire due to the recognition of unique efforts among its employees. The 2013 annual report shows a company that has not relented to look back even to prevailing financial crisis to solidify its dominant position in the computer hardware and software industry. The company has continued to preach the adherence to company’s missions, values and visions in a bid to strength an organizational culture of the company (Mondy, Noe & Gowan, 2005). Bill Gates has been on a relentless campaign to adopt and develop the capabilities and skills of the employees instead of concentrating too much in profit maximization. The company establishes a strong relationship between the management and the employees for efficient cooperation during execution of major project plans. Microsoft announced its intention to undertake One Microsoft strategy, but not without organizing its employees in teams. The employees interacted with project leaders to realize the objectives of the company by the end of 2013. The company has restructured several times in all departments to boost employee confidence in addressing the needs and demands of the clients all over the world (Pankl, 2010). The reorganization seeks to help employees deal with problems that were getting out of hand in the company because some of the employees had thought of quitting. The acknowledgment of corporate leaders and establishment of new departments increased the enthusiasm of the workers. Employees get an opportunity to make excellent decisions through their team leaders and supervisors to create a decentralized working system at Microsoft. Microsoft has improved the performance appraisal and compensation system to encourage commitment among employees. All employees get equal opportunities when seeking incentives. The company manages stocks by giving employees incentives depending on their level of performance. The company rewards excellent employees to ensure that they persevere through the daily responsibilities they get from their supervisors. Employees work hard to secure long-term work stability at Microsoft (Microsoft.com, 2014). Moreover, the compensation programs include health benefits, food availability, transportation and child care benefits. The company offers the benefits alongside competitive salaries to encourage employee commitment and subsequently their retention in the company. Training And Development Program That Would Be Fit for the Microsoft’s Management Team Training and development programs are entrusted to the human resource department as a way of developing the skills and experience of employees. An appropriate program helps an organization to stay consistent with upcoming trends, keep competition in check and contest for its financial position as well as market share. The following training and development program can help Microsoft manage its team of employees better. The company should boost team spirit environment so that workers will hardly work in isolation (Peng, 2014). The company realized a successful period by encouraging workers to work in teams to manage particular functions and achieve objectives set in One Microsoft business strategy. The training and development program that enhances team spirit assists organizations in building cohesion. Microsoft teams can learn from each other given that they deal with hardware and software products and services that require quality input. The program should also provide a platform where innovation and creativity policies are enhanced. The training and development program that improves technical expertise and hands-on skills would form an appropriate strategy for Microsoft. The company bought Nokia’s array of devices and services business that deals with smartphone and mobile technology. Employees in the engineering and design departments would not only benefit from teamwork but also from a program that boosts their technical and hands-on expertise (Sims, 2007). The company is working on a landmark transformation geared towards accelerating the growth of Windows phone and reinforcing the overall device ecosystem. Customer communication should form an excellent component or Microsoft’s training and development program. The Chief Executive Officer revealed in 2013 Annual Report that the company is set on unveiling a segment reporting framework. Employees should be trained accordingly to help them meet the needs of the framework that is targeted to create a communication link between the company and the customers. Customers will communicate issues with their devices and the employees will sprint into action and given long-term solutions (Microsoft.com, 2014). The Company’s Compensation Strategy Microsoft is among the companies in the hardware and software that pays employees fair and competitive salaries as a way of retaining them for the long-term (Careers.microsoft.com, 2014). However, the company would benefit more from employees if the compensation is structured to include a compensation committee. The committee would come up with compensation packages and incentive programs. The programs would be reviewed on a regular basis to empower the employees. The committee would also address any counseling from internal and external sources to help the employee handle the pressure of work within the company. The existing executive compensation program should be restructured so that it is used to attract and retain talented employees at Microsoft. The employees will become the potential sources of the company’s succession team. The company should unveil a special program that should boost the executive program in order to create a leadership that can handle dynamic, competitive and fast-changing hardware and software market. The executive compensation should be put under the authority of the compensation committee to take note of the instrumental employees. The employees will help the company achieve a stronger financial performance foothold (Mondy, Noe & Gowan, 2005). The compensation strategy of Microsoft for executive officers and average employees does not seem to deviate much in terms of payment structures. The compensation program for the employees is justifiable given the magnitude of the compensation already in place for the other employees. The financial numbers of the company indicate that the company’s compensation program is fit to encourage a high performance from all its sales centers. The compensation strategy adopts a philosophy that enhances the abilities of individual employees to reduce the risk when the working force is treated as a whole. Competitive Advantage by Adopting a Diversified Employee Base Strategy Microsoft can gain a competitive edge by adopting a diversified employee base. A diversified employee base will benefit Microsoft in the following ways; Microsoft diversified workforce would help it to go beyond the legal obligations that entail equal and non-discrimination legislation for all employees. Microsoft will be a reflection of a society that operates without considering the gender, race, physical and mental ability or sexual orientation of the employees. However, the company should ensure that there is a culture that does not have room for conflicting opinions to promote respect and dignity among employees (Mondy, Noe & Gowan, 2005). The move will provide the company with different perspectives that will promote interdepartmental learning. Employees will have alternative perspectives to solve the problems that arise from customers. It will encourage creativity Fast solutions and timely learning will translate to high sales, better customer reception and bigger profits for the company. Racial diversity will improve market share of the company considering Microsoft is a multi-national organization. The needs of the customers from different geographical, racial or social status areas will be understood better by the company and encourage appropriate course of action. The buying power of the customers will be boosted if Microsoft adopts a strategy that does not shut any race from accessing its products and services. A diversified workforce in Microsoft will encourage motivation and innovation. Motivation will be a key determinant of the overall productivity of the company (Careers.microsoft.com, 2014). The innovativeness among employees will enhance flexible and favorable environment for creating competitive hardware and software products and services. Recommendations for Human Capital Strategy in the Company The industry of information technology, hardware and software development is calling for a changing workforce to keep the company fit for confronting global competition. The human capital strategy of Microsoft will benefit more from new knowledge and sustainable performance to meet the needs of the workforce as the world heals from a recent global recession. There should be corporate leaders to conduct a thorough examination and re-evaluation of strategies that can enhance better employee management and operation. The need to utilize new technologies and changing organization structures to align the company with prevailing demands in the industry will require appropriate strategies (Pankl, 2010). The workforce can be relocated, work on redesigned tasks and improved work processes. The change will allow Microsoft to change how human capital is managed and how the human resource functions should be operated. The human resource management team will deal with a workforce that is trained and developed to meet the demands of the hardware and software market. Microsoft’s annual report of 2013 reveals that human capital and undeniable intellectual property are the most vital assets of the company besides financial prominence. However, the company must be ready to meet a compensation cost that amounts to at least half of the business costs in the service industry. The responsibility of the human resource department will be to come up with relevant strategies to control human capital expenditure and keep the profit portion alive. The company should also address talent management issues by unveiling knowledge and capability building training programs. Microsoft should arise to the occasion and check the cost and challenge human resource professionals to become more responsible than before. References Careers.microsoft.com,. (2014). Microsoft Careers: Diversity & Inclusion. Retrieved 14 December 2014, from http://careers.microsoft.com/careers/en/ie/diversity.aspx Edward, I. (2012). Corporate Strategy: How HR Can Become a Player. Forbes. Retrieved 13 December 2014, from http://www.forbes.com/sites/edwardlawler/2012/08/15/corporate-strategy-how-hr-can-become-a-player/ Microsoft.com,. (2014). Microsoft 2013 Annual Report. Retrieved 14 December 2014, from http://www.microsoft.com/investor/reports/ar13/index.html Microsoft.com,. (2014). Microsoft Case Study: Microsoft Project Server 2010 - Microsoft Human Resources. Retrieved 13 December 2014, from http://www.microsoft.com/casestudies/Microsoft-Project-Server-2010/Microsoft-Human-Resources/Microsoft-Human-Resources-Reduces-Project-Portfolio-to-Improve-Effectiveness/4000007231 Mondy, R., Noe, R., & Gowan, M. (2005). Human resource management. Upper Saddle River, N.J.: Pearson Prentice Hall. Pankl, E. (2010). Recruitment, development and retention of information professionals. Hershey, PA: Business Science Reference. Peng, M. (2014). Global strategy. Mason, Ohio: South-Western. Sims, R. (2007). Human resource management. Charlotte, N.C.: Information Age Pub. Read More