An Analysis of Employee Motivation and Retention at Microsoft

This report provides an in-depth analysis of employee motivation and retention strategies, using Microsoft as a case study. It begins with an executive summary highlighting the significance of these strategies for organizational success, especially in a globalized context. The report delves into Microsoft's HRM practices, organizational culture, and the issues it faced, including discrimination, hiring challenges, strict leadership, high attrition rates, lack of competition, and bureaucracy. It then outlines the solutions implemented by Microsoft, such as improvements in communication. The report concludes with recommendations, emphasizing the importance of a motivated workforce for productivity and profitability. The analysis covers the evolution of Microsoft's approach to employee management, from an initial focus on innovation to addressing human resource challenges. It highlights how factors like workplace environment, employee compensation, and team building influence employee motivation and retention. The report underscores the need for organizations to adapt and prioritize employee satisfaction to maintain a competitive edge.

Running head: Employee motivation and retention strategies at Microsoft 1
Employee motivation and retention strategies at Microsoft

Employee motivation and retention strategies at Microsoft 2
Executive Summary
The aim of this paper is to understand the importance of retention strategise and motivation
strategies for any organisation. There is a lot more which an organisation can gain from a
motivated workforce in terms of higher productivity s well as profitability. In such a globalized
word, organisations are keeping their high focus upon the retention and motivation of the
employees for acquiring increased level of competitive benefits. The report will present the case
of Microsoft and the issues it faced in the motivation and retention of its workforce and the
particular strategise it used to overcome those issues.

Employee motivation and retention strategies at Microsoft 3
Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................2
HRM and Organisational culture at Microsoft................................................................................2
Issues related to retention and motivation of the workforce at Microsoft.......................................3
Solution to the issues of employee retention and motivation..........................................................6
Conclusion and Recommendations..................................................................................................8
References......................................................................................................................................10

Employee motivation and retention strategies at Microsoft 4
Introduction
Retention and motivation of the employees are the two most vital aspects of any organisational
human resource management as it only reflects the organisational productivity and the efficiency
of the employees. The organisations are required to have those strategies that can build the
morale and motivation of the workforce and help in retaining them in the organisation. Increased
level ofmotivation influences an employee to work in a positive and efficient manner and rapidly
attain the desired goals of the organisation. the organisation oppose to this have ineffective
strategies regarding the motivation and retention of the employee face number of challenges as
well as financial issues in the market too. It also make challenging for the organisations to retain
the competent and skilled workforce (ALDamoe, Yazam and Ahmid, 2012). Therefore, for
attaining a competitive advantage it is essential to have a motivated workforce in the
organisation. Presently there are several organisations that are striving hard to take sue of
effective strategies for retaining and motivating the organisational workforce. To motivate the
employees there are diverse set of approaches for yielding the best talent from the market. The
key factor in the strategies is remuneration of the employees and communication for making
them assure that they are paid adequate compensation as well as for having an improved
workplace environment with effective team building. There are various other strategies too for
motivating the employees that comprises of performance appraisal, training, rewards and
recognition, etc. (Abdullah, Ahsan and Alam, 2009). These strategies play vital role in retaining
and motivating the workforce. It is also important for the companies to comprehend the
significance of possessing a workforce which is highly motivated. There is also a viewpoint that
implementing the motivation strategies is a waste of resources and cost but on the contrary, all
the motivation strategies are not expensive and the small organisations can even implement them
in an affordable manner. In this paper, the key focus will be on the motivation and retention
strategies of Microsoft Corporation, the issues faced by the company and the respective
strategies to overcome the same.

Employee motivation and retention strategies at Microsoft 5
HRM and Organisational culture at Microsoft
Microsoft was grounded in the year 1975 and presently is the leader of the technology industry
with its continuous expansion and growth. The key success of Microsoft was recognized in the
year 1980 when it had an association with the most one of the successful organisations of that
time, IBM. Microsoft used to work on developing the operating system that was about to launch
by IBM. Microsoft gained continuous success with its innovative software and technologies and
gained extreme level of specialisation in the operating system. Bill Gates, the CEO of Microsoft
had a huge attention on the organisational culture and the satisfaction of the employees. In
present time, Microsoft is one of the top most companies where the employees want to work and
the retention rate is also extremely high. There is a strong development of teams which works in
team for the higher productivity and success of the organisation. The organisation possesses a
strong and robust organisational culture which helps in motivating the employees and delivering
the most potential outcomes (Chakraborty, 2010). All such aspects helped Microsoft in
recognizing as a leader in the technological industry and producing the most innovative
operating systems. All these factors support in enhancing the performance of the employees as
well as productivity and growth of the company. The company is also recognized as the
employer that has the most effective and efficient retention and motivation strategies. The
strengthening and powerful organisational culture of Microsoft helps in fetching the interest of
competent employees. The motivated employees used to work hard for the accomplishment of
the organisational goals which offered a number of competitive and financial benefits to the
organisation. Till the period of late 1990s only the organisational culture of retention And
motivation was acknowledged but later to this, the organisation started experiencing a number of
human resource issues that weakens the comap0ny in number of ways. But with the rapid growth
and success, Microsoft neglected the organisational culture development and there were more
efforts for attaining profits rather than satisfaction of the employees. The research and
development activities were acquiring huge funding for serving the customers with most suitable
and innovative products. In order to dominate the hardware and the computer software industry
and to reap all the competitive benefits, Microsoft did not realise the pressure it was imposing g
on its employees. There were taking place activities such as changing in the organisational
culture, restructuring of the practices of human resource, cut down of the various programs, etc.

Employee motivation and retention strategies at Microsoft 6
All these factors laid down a direct impact on the performance, productivity and profitability of
the organisation as the employees’ stared feeling de-motivated (Chakraborty and Gupta, 2010).
Issues related to retention and motivation of the workforce at Microsoft
Discrimination
The issue of discrimination was realized when some of the Black African American have raised
their voice against the unfair practices taking place in the organisation. There were filed some
law suits against the organisation against the management practices of Microsoft (Chakraborty
and Gupta, 2010). They mentioned that they were offered comparatively less wages,
compensations and incentives which were offered to the American employees. In the
performance assessment, these people were ranked low so that they do not get promotions and
bonuses which were marked as an inequitable practice of the management (Sandhya and Kumar,
2011). There was immediate termination of the Black Americans without any prior notification
or appropriate justification given to them as well as they were replaced with the contractual
workers. There was a hundred percent non-tolerance policy which was used to followed by the
organisation but such activities was the result of incompliance of the practice in an adequate
manner. And thus, there tool place a number of racial discrimination issues that de-motivated the
staff and there occurred high turnover rates and dissatisfaction at workplace (Armstrong and
Taylor, 2014).
Hiring Issues
Because of the continuously growing pressure and the unfair practices, a group of competent as
well as tenured employees left the organisation and this was one of the most challenging aspects
for the HR department of Microsoft to find their replacements. Due to a completely disorganised
state of the Microsoft’s organisational culture, there was squat number of competent employees
who were found interested in working at Microsoft. Although, the company was providing a
great opportunity for the career development and bonuses but because of getting sidelined or
blended in such a disturbed organisational culture, potential candidates do not wanted to being
employed in Microsoft. This resulted in intense hiring issues at the organisation which leads to
increased number of issues related to motivation and retention of the existing employees.

Employee motivation and retention strategies at Microsoft 7
Strict and tough leadership
Microsoft was well known for the strict and tough leadership it followed for managing its
employees as the organisation wanted to have excellent outcomes and productivity with upsurge
level of efficiency, for recognizing as the leader in the industry. Due to high level of perfectionist
organisational culture, Microsoft tends to pose huge penalties on its workers for any kind of fault
or mistake (Samuel and Chipunza, 2009). There was no consideration regarding the personal life
of the employees or no emphasis on the work-life balance practice rather the employees were
forced and pressurized to have their complete concentration on the efficiency of the task. Thus,
fulfilling of workplace responsibilities was becoming an obligation more than a responsibility.
There was a complete questioning which took place for getting g justification for the actions
taken by the employees for their work (Monsen and Wayne Boss, 2009). There was passed
positive as well as negative feedbacks to the workforce as well as it was asked to employees to
not to celebrate their success and rather must pay more attention for achieving more improved
performance and efficiency in their work. The employees who were found performing not much
well were threatened to be terminated. Thus, all such factors changed the organisational culture
and the staff remained highly de-motivated. All such aspect and strict leadership resulted in
increased turnover rate and dissatisfaction of the employees (Baloch, 2009).
Surge in attrition rates
Because of the increased level of pressure and work load, no importance to the work-life balance
of the employees, discrimination issues, the deteriorated culture of the organisation and
ineffective human resource management at Microsoft, the existing employees started feeling
distressed and de-motivated which forces them to leave the organisation (Mendes and Stander,
2011). Because of the lesser priorities to the satisfaction of the employees, most of the competent
employees left the organization. Such situation posed a negative e impact on the remaining
employees and thus they also switch the organization. Thus, managing the attrition rate was
challenging for the organisation which ultimately resulted in high level of retention and
motivation issues at the workplace (Beecham, et al., 2008).
Lack of competition

Employee motivation and retention strategies at Microsoft 8
As Microsoft became the leader in the technology sector, there was no other organisation or
company that can give competition to Microsoft. Because of rapid expansion, being a
perfectionist and the most successful organisation, there was no threat of market competition.
And this became one of the most important factors in weakening of the organization culture as
Microsoft paid no attention to the employees (Manzoor, 2012). The workforce wanted some
change in their work to have a relaxing working environment but due to being a company
serving its customer with best quality, there was no relaxation to the employees as well as no
efforts was made to impress the employees as Microsoft was already reaping the benefits of
success. The organisational culture was linked with the desire for growth and success of the
organisation and as a result some of the employees left the organisation to escape from the long
process of perfection. They were in a search of some relaxing and new environment and thus it
resulted in de-motivated staff and increased turnover rate of the employees (Boxall and Purcell,
2011).
Bureaucracy
Due to increased level of global expansion, there was a need to have mote number of employees
and for managing those newly recruits as well as high number of workforces, the company take
use of bureaucratic management style. Instead of improving the process of recruitment and
recruiting only the competent employees, the organisation had a large incompetent workforce
and managed it through bureaucratic style of management (Kyndt, etv al., 2009). The employees
who were tenured and experienced were used to get promoted and there were very less benefits
offered to the newly recruited employees. And because of extreme level of bureaucracy, there
were number of employees who left the organisation which resulted in retention issues and
existence of de-motivated staff in Microsoft (Carleton, 2011).
Solution to the issues of employee retention and motivation
Improvement in the lines of Communication
To overcome such issues, the CEO Ballmer trued to have improvements in the lines of
communication among the executive of HR department and the organisational workforce for
assuring that there is addressing, identification and satisfaction of the employees’ sentiments,

Employee motivation and retention strategies at Microsoft 9
demands and needs. He ensured that there is a strong and smooth flow of communication among
all the departments as well as the grass root employees so that the issues can be resolved on an
instant basis and no employee left the organisation due to in-adherence of their grievances or
issues (Jiang, et al., 2012). Such strategy or initiative helped the organisation in a deeper sense as
there was increased level of motivation of the employees as well as the turnover rate of the
employees also experienced a sudden decline. With increasing effectiveness of the organisational
human resource department, there was faster resolution of the grievances and issues of the
workforce which developed a strong organisational culture and a motivated workforce
(Chiboiwa, Samuel and Chipunza, 2010).
Improvement in the Compensation System and Performance Appraisal System
The next strategy or solution the increasing issues of motivation and retention was improvement
in the compensation system and the performance appraisal system. In Microsoft, it was analyzed
that there was a system of forced ranking where the tenured employees were rewarded and given
high level of compensation in comparison with the new recruiters. There was an extreme level of
biasness that took place in analyzing the performance of the employees, rewarding them as well
as in giving those incentives (Chakraborty and Gupta, 2010). To offer an equal opportunity to all
the employees, there was initiated an improved compensation system and the performance
appraisal system. The effective performance system was based on offering compensations and
incentives to the actual performers with no biasness in decision making. The one who performs
well gets a reward and promotion including the Black African Americans. This resulted in
elimination of the racial discrimination issues and also the eradication of the unfair practices. All
such initiatives of the organisation resulted increased and upsurge level of motivation among the
workforce. They used to work harder to attain benefits and there occurred improved
organisational culture and long term association of the employees with the organisation (Collings
and Mellahi, 2009).
Upsurge in Employee Benefits
To resolve the issues and conflicts in respect with the squat employee benefits and cut down of
the various programs, there were several changes that were adopted by Ballmer in order to offer
high employee benefits to the organisational workforce (Chakraborty and Gupta, 2010). There

Employee motivation and retention strategies at Microsoft 10
were a number of benefits including various health benefits, discounts, child care benefits,
insurance benefits, free of cost eatables and many other benefits. Such benefits were offered to
the employees to encourage them to stay in the organisation and to work hard with increased
level of motivation (James and Mathew, 2012). The employees felt a great experience by getting
all such benefits while working at Microsoft. The salaries of the employees were integrated with
these employee benefits and there was seen an increased level of motivation and commitment
towards the work. It was considered as a perfect and practical resolution to the increasing
number of issues in the organisation for both in fetching the attention of the competent
employees and to retain the existing workforce. It helped in changing the minds of the workforce
towards the brand image of Microsoft and once this was been implemented, there was a much
contended and satisfied workforce. The benefits provided to the employees might be small in
nature but the overall impact which was posed by these initiatives and benefits was huge as it
helped in gaining a lost confidence once again in the organisational workforce to work hard for
the accomplishment of the goals and objectives (Deery, 2008).
Workplace Set Ups
The one more important and significant strategy for overcoming the challenges of decreased rate
of motivation and retention of the employees was setting up of new workplaces. For addressing
the human resource issues, this was considered as a vital step as Microsoft restructured itself by
having a more creative, innovative and redesigned workplaces for the employees so that they can
be encouraged to have more communication with their colleagues and team members
(Chakraborty and Gupta, 2010). There were formation of clusters and with the effective flow of
communication, there was team building which eradicates the issues of cultural diversity as well
as a more informal and satisfactory working environment take place in the organisation (Islam
and Zaki Hj. Ismail, 2008). The employees used to get increased level of cooperation from other
employees as well as from the human resource managers. The change in the workplace set up
motivated the employees as they feel valued. There were some views that these changes are
irrelevant as well as considered as wastage of the funds and resources but when Microsoft
analyzed the overall results, it was fond that there was a key role in the increased productivity
and motivation of the employees of the redesigning of the workplace set ups. Hence it was

Employee motivation and retention strategies at Microsoft 11
realized that it is one of the most effective solution for retaining the employees as well as to
boost their morale to work hard (Hong, et al., 2012).
Conclusion and Recommendations
From the case analysis as well as the various issues faced by Microsoft in retaining and
motivating the workforce, it can be concluded that Microsoft was required to have increased
emphasis on developing the organizational culture as employee-centric rather than profit-centric.
The key reason behind the increased turnover rate of the tenured and competent employees was
the deteriorated organisational culture and a feeling of being not required. The employees felt
that they are over pressurized to deliver improved output with high level of efficiency as well as
they have no career opportunity left with them while associating with Microsoft. It is also started
that employee retention and the employee motivation are those two aspects that can impact all
other functions of any organisation and so there is an extensive need that the human resource
department must keep a strict eye on both these factors. In case of Microsoft as well as any other
company, it is true that a motivated group of employees will offer high productivity and
efficiency to the organisation in comparison with an organisation with de-motivated employee
group. The employees who possess increased level of motivation are more productive and are
much beneficial for an organisation as they maintain a good balance in their professional and
personal lives. Therefore, to have continuous growth and profit, the organisations must strive
hard foe satisfying their employees and assuring that their needs are met in an effective manner.
It is also recommended to Microsoft that it can take use of strategies such as by providing the
employees with sound training so that there can be gained professional development as well as
the personal development of the workforce. Secondly, Microsoft can also implement is
mellowing down the culture of perfection so that the intense pressure can be reduced and the
employees can work freely (Chakraborty and Gupta, 2010).

Employee motivation and retention strategies at Microsoft 12
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