Analysis of Employee Motivation and Retention Strategies at Microsoft

This report provides an in-depth analysis of employee motivation and retention strategies at Microsoft, examining the significance of organizational behavior in fostering a productive workforce. It begins with an overview of Microsoft Corporation and then delves into the company's approach to employee retention and motivation, highlighting its evolution and the challenges faced, including issues related to bureaucratic leadership, employee discrimination, and a risk-taking culture. The report explores strategies implemented to improve retention and motivation, such as fostering a positive work environment and addressing human resource issues. It concludes with recommendations for Microsoft to enhance employee satisfaction, motivation, and overall organizational productivity, emphasizing the importance of a strong organizational culture and effective HR practices. The report underscores the impact of employee motivation on organizational performance and the need for proactive measures to address workplace challenges.

Running head: Employee Motivation and Retention Strategies at Microsoft 1
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Employee Motivation and Retention Strategies at Microsoft
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Employee Motivation and Retention Strategies at Microsoft 2
Executive Summary
The purpose of this report is to understand the significance of retention and motivation of the
employees in an organisation. An organisation can gain a lot more with a motivated workforce in
comparison with a de-motivated employee group. In present time, the organisations are having
their key emphasis on the development and motivation of the organisational employees so that
they can have a long time retaining period in the organisations and there can be achieved a
number of competitive advantages. The study will have its emphasis upon the case study and its
analysis in considering with the employee retention and motivation at Microsoft Corporation.
There are number of challenges and issues experienced by Microsoft in its history and have
impacted the overall performance of the organisation too. The study will also present the various
initiatives and steps for overcoming the human resource issues and having a better and improved
HR system for motivating the workforce. The paper will also highlight some recommendations
to the organisation in order to satisfy, motivate and retain the employees and have better
organisational productivity.

Employee Motivation and Retention Strategies at Microsoft 3
Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................2
Overview of Microsoft Corporation................................................................................................2
Employee Retention and Motivation at Microsoft..........................................................................3
Issues related to motivation and retention of the employees at Microsoft......................................4
Strategies used for achieving improvement in the retention and motivation of the employees......6
Recommendations............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Employee Motivation and Retention Strategies at Microsoft 4
Introduction
The aim behind developing this report is to have an in-depth understanding of the significance of
organisational behaviour in the organisation and at the workplace. Organisational behaviour is a
broad term that plays a major role in the building of the organisation. There are not only the
buildings, machinery or the operations that form an organisation but the individuals that develop
a flow of communication and interaction with each other for the accomplishment of the mutual
objectives and aims. There are various theories of organisational behaviour that support the
managers to develop a strong level of understanding among the individuals in respect to their
feelings, performance and their level of perception in the organisational setting. (Alfes, et al.,
2013). There is a great significance of the organisational behaviour theories and strategies to
have a good control on the organisation, the organisational employees and the future
sustainability of the organisation. The organisational behaviour can be considered as a deep
study that supports in evaluating the influence posed by the individuals, groups and the
organisational structure on the behaviour of the organisation (Ali and Aroosiya, 2012). In the
organisational behaviour, the motivation and retention of the employees is of key significance as
kit influences the behaviour as well as the performance of the employees. There is a strict need
that in present time, the organisations must have their major focus on these factors for achieving
a better organisational behaviour and enhanced productivity. The paper will understand the role
of organisational behaviour and the employee motivation and retention in respect with Microsoft
as it is one of the key example which can provide a better understanding if the aspect with its
practical example.
Overview of Microsoft Corporation
The leader of the technology industry, Microsoft Corporation was established in the year 1975
by the efforts of Paul Allen and Gates. The organisation has developed rapidly and is presently
the most recognized and largest serving multinational organisation in the technology industry
cross the globe. The first programming language was developed by Microsoft in 1975 named
Altair Basic which gained huge success and presently used in almost all the computers. In the
year 1977, there were key launches of Microsoft named FORTRAN, IJ 1978, COBOL and also

Employee Motivation and Retention Strategies at Microsoft 5
developed version of BASIC. In the year 1980, there was a huge success gained by Microsoft
when it had an agreement with IBM for developing an operating system (Chakraborty and
Gupta, 2010). There was development of Q_DOS also which IBM used in its computers and
which was later recognized as MS-DOS. This helped the company in achieving great recognition
in the releasing of the operating systems across the globe. Later to this, there as developed a
window operating system which acquires a considerable market in the technology industry. The
continuous success and growth of Microsoft demonstrates the skills of the company and its key
persons. In past few decades, there has been developed a strong organisational culture with a
motivated workforce. There is a strong team which helps in developing quality software
products. There is a strong culture in the organisation that supports in motivating the staff and
delivering the best outcomes. And thus, all this initiatives helped the organisation to remain at
the top in the industry (Chakraborty, 2010).
Employee Retention and Motivation at Microsoft
There is a renowned and recognized name of Microsoft for being one of the employers of the
choice as it is one of the top most organisations that embrace the most effective and best
retention as well as motivational strategies at their workplace. There is a robust organisational
culture at Microsoft which is the biggest factor in fetching the attention of the talented and
competent employees and acquiring workforce that is extremely skilled and competent offers a
series of competitive advantages to the company and helped Microsoft to drive success. The
higher the level of motivation is the greater the level of productivity which also results in a better
quality outcomes. The strong organisational culture that emphasis on having string motivational
level of the employees was there till the time period of 1900s but after that the organisation
started experiencing some or the other human resource issue (Chakraborty and Gupta, 2010).
The key factor behind these issues according to the experts was less focus of the mangers on the
organisational culture in the period of achievement of huge growth and thus it resulted in
deterioration of the organisational culture (Armstrong and Taylor, 2014). There were number of
factors that have resulted in high issues at the organisational workplace such as highly innovative
culture, risk taking culture and the changing working environment. There was a high level of
frustration that took place because of the ignorance of the satisfaction and importance if the
employees. To have a better profitability and growth, the organisation established a different

Employee Motivation and Retention Strategies at Microsoft 6
structure that has diverse set of HR practices. Because of the aim of enhancing profits, the
organisation cut down the expenditure used to done for the development and growth of the
employees and this negatively impacted the work and motivation of the workforce. And it
resulted in occurrence of numerous human resource issues and resulted in increased turnover rate
of the employees at Microsoft (Batt and Colvin, 2011).
Issues related to motivation and retention of the employees at Microsoft
There are several issues that occurred at the workplace of Microsoft because of the deteriorated
workplace culture. The first and the key issue were its management and the existence and follow
of bureaucratic leadership. In the initial stages, there was a better and effective management
because of the small organization so it can be handled and managed easily. But after the
expansion phase of the company, there were several new members entered in the organisation for
effectively managing the organisation but due to success and expansion, there was neglected the
effective management of the employees. And the less emphasis upon the structure of the
management, there was enhanced level of bureaucracy in the organisation and in the
management of the employees which ultimately resulted in negative implications upon the
performance of the organisation (Bratton and Gold, 2012). And this made it complex and
challenging for the new recruits to work as most of time they were disregarded. There was high
level of rigidity in the decision making process and to have single change there was a need of
approval from the higher authorities which made inconvenience for the employees to work in
such a bureaucratic environment. And to manage the employees with increased level of diversity,
it became challenging for Microsoft and thus the bureaucracy leadership and management
structure has reduced the productivity and efficiency of the employees (Boxall and Purcell,
2011).
There are number of employee motivation issues that are also related to the rough management
of the organisation as there was always a rough and strict way used by the organisation for
managing the employees there were numerous issues that took place because of such leadership
following the workplace. There was a strict behavioural aspect that was used by the
organisational managers for forcing the employees to work hard and deliver increased level of
productivity. This imposed high pressure on the employees which resulted in work-life issues for

Employee Motivation and Retention Strategies at Microsoft 7
the employees and the overall productivity of the workforce decreased. The rough and strict
management of the employees didn’t work well and there resulted in attrition of the employees
due to inflexibility and high work pressure (Buller and McEvoy, 2012). There are human
resources and employee related issues in respect with the low level of competition. Because of
the fact that Microsoft was recognized as the leader in the technology sector and was highly
known for its perfection, it became essential for the organisation to deliver the best quality to the
customers and satisfy them. And this offered a big competitive benefit to Microsoft in
comparison with other competitors. Therefore, the low level of competition has given success to
the company and so there was less emphasis upon the human resources which led to occurrence
of number of employee related issues in the organisation (Harzing and Pinnington, 2010).
Another key issue faced by Microsoft in terms of low level of motivation of the employees was
the risk taking culture of Microsoft. There was a tendency or culture of taking high level of risks
by the organisation. There was avoidance of the errors and mistakes that were taking place at the
workplace and there was increased pressure on the employees for being accountable for any
negative outcome as well as for all their actions. Each and every employee remained liable for
his or her job at the time of their work (Crook, et al., 2011). There was a complete justification
asked from the employees when occurs any kind of error and they were charged for the same.
And this threatened the workforce to perform any action which might pose a negative impact on
the organisation. Therefore, the innovative culture of the organisation lost somewhere due to
increased level of risks. Thus, it resulted in decreased level of organisational productivity.
There is one major and key issue which affects the motivation and retention of the employees’
i.e. the high level of discrimination at the workplace. It was claimed by some of the
organisational employees that there take place high level of discrimination at Microsoft. The
African American employees filed a suit against the organisation due to experiencing
discrimination at the workplace. It was clear and evident from the case that those employees
were discriminated in respect with various factors including performance evaluation, rewards
and recognition and workplace promotions (Hong, et al., 2012). A few cases were also filed
against the unlawful termination of the some of the Blacks from the organisation. As well as, it
was also realized by the employees that there is high level of discrimination in offering
compensations and bonuses to the employees. The management of the organisation get

Employee Motivation and Retention Strategies at Microsoft 8
shuddered with such cases and majorly the impact was on the financial performance of the
company in the market. It was argued by the organisational management that there follows a
hundred percent non-tolerance policy which used to follow in the organisation in respect with the
racial discrimination issues. Thus, the issue occurred because of the fact that the organisation
was failed to enforce the policy in an effective manner. There were laws and policies but the
enforcement was not done. There were also few complaints highlighting the presence of
discrimination in offering training to the employees (James and Mathew, 2012).
Strategies used for achieving improvement in the retention and motivation of
the employees
There are various strategies which have been used by Microsoft in order to overcome and resolve
the human resource issues at the workplace and to have increased level of employee motivation
and retention in the organisation. The first and the most vital strategy used by Microsoft were
making changes in the employee benefits programs and schemes. In order to reduce the cost and
increase the profit, the employee benefits were curbed. But to resolve the issue, Microsoft
included several things in the employee benefits such as offering discounts, health related
benefits, child care facilities, transportation facilities and availability of food. Such employee
benefits played a vital and significant role in gaining trust of the employees and motivating them
(Jiang, et al., 2012). Such employee benefits resulted in increased satisfaction of the employees
and they had a commitment towards their work and the organisation once again and the issue of
attrition rate of the employees somehow get resolved. Therefore, the offering employee benefits
act as a source of resolving the issue related to motivation and retention of the workforce. It
offers a sense of opportunity to the organisation for offering high benefits and competitive wages
to the workforce like other competitive organisations and as a result the employee benefits act as
a the motivational factor for the employees (Kinicki and Kreitner, 2012). The high level of
benefits and increased remuneration are highly satisfied and as a result become more productive
and efficient. Thus, the increased levels of employee benefits were vital in resolving the issues
and improving the organisational culture and motivation of the employees.
The next strategy used by Microsoft was changes in the communication system. There was
established a system that encourages occurrence of a smooth flow of communication that

Employee Motivation and Retention Strategies at Microsoft 9
comprises of flow of communication in both direction i.e. up and down horizontal as well a
vertical communications. There were introduced a series of programs by Brummel such as
“listening tour” under which there was movement from one place to another for fetching the
viewpoints of the employees and mainly the newly recruited workforce (Chakraborty and Gupta,
2010). The enhanced flow of communication resulted in fast resolution of the human resource
issues and increased employee engagement that improves the motivation of the employees
(Mathis and Jackson, 2011). The better communication system offers a chance to Microsoft to
improve the organisational culture through taking ideas from the employees for the betterment of
the organisational workplace. And thus, increased involvement of the employees also resulted in
enhanced motivation because of the fact that employees feel a sense of belongingness as their
opinions are given importance and heard. Therefore, changing in the communication system
helped Microsoft in increasing employee motivation and retention (Nwokocha and Iheriohanma,
2012).
There was also a new workplace set up for offering much comfort to the employees. It was one
of the most innovative ways to resolve the issues of employees. The more reformed, innovative
and creative organisational set up results in increased communication among the employees. It
also supported in dev eloping a team spirit as there were closed workstations of the employees
and thus it enhances the productivity. And thus it resulted in increased cooperation and unity
among in the organisation. it further promotes a satisfied and comfortable organisational
workplace and environment that resulted in increased level of efficiency (Scullion and Collings,
2011). The establishment of the creative work stations was first realised as not appropriate and
loss of investment but the outcomes gained were different as it helped in declining the issues and
also encouraged workforce in delivering high level of productivity. It was considered as a big
initiative in order to attain improved level employee retention and motivation. As well as, the
improved workplace set up developed the boding among the diverse set of employees and issues
related to diversity also declined. Therefore, the improved and newly designed workplaces
helped in motivating the workforce for increasing the level of retention (Sandhya and Kumar,
2011).
The next strategy used by the company was implementing sound performance appraisal system
in the organisation. Microsoft always used to work upon a ‘forced curve system’ that offers

Employee Motivation and Retention Strategies at Microsoft 10
rewards and recognition only to the top level employees and thus there results biasness issue in
the organisation which decreased their motivation level. This approach of management does not
offer an equal opportunity to the employees to grow and develop. The African Americans were
the ones who felt high level of discrimination on the basis of such systems and thus they felt de-
motivated. To overcome such issue, Brummel established a new and improved performance
appraisal system for eliminating the biasness in decision making (Chakraborty and Gupta, 2010).
The performance appraisal system rewards the employees on the basis of their performances
rather than any other factor. Therefore, it increases the fairness and equity in the organisation
which motivated the employees to retain in Microsoft and give their hundred percent for the
work and this also enhanced their motivation level (Sparrow, Brewster and Chung, 2016).
Recommendations
Microsoft is taking continuous initiatives for achieving improvement in the motivation and
retention as well as for the attainment of an improved HR system in the organisation. There are
few other recommendations or factors which are required to be more focused in order to achieve
a highly motivated and retained group of individuals in the organisation. The primary
recommendation is that there must be effective training and development sessions as it is one of
the most critical aspect which supports in increasing the level of satisfaction of the workforce as
well as to keep them motivated (Armstrong and Taylor, 2014). There is always required
continuous growth of the competencies and knowledge for keep an individual motivated. The
potential candidates seeks those organisations that offer improved development and training
programs to the employees for achieving both personal as well as professional development.
Therefore, it is essential that Microsoft must offer good training to the employees for improving
their level of motivation and retention. The second recommendation to Microsoft is that there
must be integration of the organisational culture and the human resource practices (Zheng, Yang
and McLean, 2010). The culture of an organisation is one of the key aspects which help in
implementation of the effective HR practices. As well as, it will also help in making the new
recruits aware regarding the newly developed reforms. Therefore, a supportive organisational
culture will help in fetching more competitive advantage of possessing retained and motivated
workforce. There must be improved level of flexibility and transformational leadership rather
than bureaucratic approach towards the new recruiters. It will help in achieving a highly

Employee Motivation and Retention Strategies at Microsoft 11
motivated workforce that have an increased level of commitment towards the organisation and
also retain for a longer time period (Tiwari and Saxena, 2012).
Conclusion
Employee retention and employee motivation are the two vital and significant aspects for an
organisation that impacts the organisational culture, human resource and the organisational
behaviour. The motivated workforce is one of the most precious assets for any organisation as
they deliver high level of efficiency and productivity to the organisation in comparison with the
de-motivated staff. Therefore, it results in upsurge revenues and growth of the organisation
which also offers competitive benefits to the organisation. From this paper, it can be concluded
that there are numerous strategies foe employee retention and motivation that entails workplace
set up, reward and recognition, communication, etc. It is concluded and recommended that there
can be achieved more improved and motivated workforce through embracing effective trainings.
Therefore, the most potential way for implementing the HR practices for the motivation and
retention of the employees is having integration with the organisational culture.

Employee Motivation and Retention Strategies at Microsoft 12
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