HUMAN RESOURCE MANAGEMENT

ASSIGNMENT: Microsoft - present and future

A project report submitted to

SUBMITTED BY:
SWATI
PGP/25/423
Introduction

Microsoft is a multinational technology company that makes computer software as well as

consumer electronics and accessories. The technology company has been a global leader in a

variety of fields since its inception in 1972, owing in part to its efficient and innovative

organizational culture. Under Steve Ballmer's leadership, this shifted from 2000 to 2014, with

significant repercussions for the company's market share and stock prices. One of the first

responsibilities for new CEO Satya Nadella after taking over as CEO in 2014 was to reinvent

Microsoft's company culture.

2001-2005

Change in Leadership

After Bill Gates' retirement in 2000, Ballmer took over as CEO of Microsoft, which was

already a market leader. When Ballmer came over, Microsoft was worth $558 billion. Among

other things, he changed the company's strategy, increased remuneration through more

frequent promotions, and prioritized experienced recruits. These developments, on the other

hand, required management to explore how to maintain the company's successful HR

practices while adjusting to new business realities.

According to primary research, Microsoft's culture valued engineering. Bill Gates was a

proponent of technological advancement and innovation. The company's culture shifted from

one of invention to one of profit (from everything). People went above and above to

demonstrate how their product generated income rather than enhancing the lives of their

consumers. There is also the issue of competitiveness to take into account. While Bill wisely

built interconnected products around Windows to help the platform grow, Steve went head-

to-head with the competition. A concentration on competition leads to a lack of capacity to

enhance one's own product, developing new research areas, and issues that are important to

clients.
Microsoft's incapacity to comprehend the consumer market became a serious disadvantage

when competitors began to emerge with products that were fundamentally better to its own.

Microsoft just couldn't compete in terms of raw resources.

2006-10

The Emphasis on Quantity as Opposed to Quality

Instead of aiming to create truly creative items, this period was characterized by a culture of

ruling by force of numbers. Microsoft was plagued by a number of high-profile product

failures from 2006 forward. This wreaked havoc on the firm's already tarnished image. The

first such launch was Microsoft's enormously unpopular Zune MP3 player. Then there was

Windows Vista, which featured a rich, sophisticated user interface but was blasted by even

the most ardent Microsoft supporters despite having a rich, sophisticated user interface. It's

worth noting that Steve Ballmer, the then-CEO of Microsoft, came from a sales background.

As a result, the company's primary focus was on revenue growth rather than developing

unique things that people genuinely wanted. This was a shift from Gates' idea of promoting

"profitable" innovation.

Myopic Bureaucracy

It is tough to dismantle bureaucracy. As demonstrated by Ballmer's leadership style, the

archetypical characteristics of bureaucracy - tiered decision rights, fixed unit borders,

specialized jobs, and conventional processes - inhibit adaptation, creativity, and involvement.

In the 1980s, Microsoft's PC-centric business strategy catapulted the company to

superstardom, but the company struggled to stay up in subsequent decades. The problem was

not one of a lack of expertise. In a handful of races, Microsoft was the first to take the field.

In others, there isn't much. Apple had a five-year head start on the Zune when the iPod was

debuted. Before Microsoft ever got off the ground, Apple virtually ruled the burgeoning MP3

sector.
Within the company, young teams had cobbled together resources and created cutting-edge

prototypes. Despite this, only a few of these efforts garnered significant funding. The

majority of them sat unnoticed on the firm's boundaries. Others were removed from office by

presidential order.

The Windows Obsession

Throughout the aughts, Microsoft struggled to maintain a diverse corporate strategy.

Microsoft's fixation with Windows hampered young recruits. In 2009, a Microsoft team

presented Steve Ballmer with a prototype tablet, a year before Apple's iPad was unveiled.

The gadget, code-named Courier, was commended by a noted blogger as "an incredible take

on the tablet." On the other side, Balmer was unimpressed. He demanded furiously, "Why

hadn't the team used the Windows operating system for the new device?" After being

unsatisfied with the reaction, Ballmer boosted the endeavor.

2011-15

Beckoning A New Era

Misguided HR strategies at Microsoft resulted in a talent drain. In "Microsoft's Lost Decade,"

Kurt Eichenwald chronicles Microsoft's demise in a Vanity Fair storey fittingly titled

"Microsoft's Lost Decade," he revisits a decade of technological mistakes and terrible

business decisions. Microsoft's Ministry of Truth, as well as Ballmer himself, reacted angrily

to the piece. As the firm grew, they deployed multiple performance assessment systems,

resulting in cultural decadence and internal distrust due to poor execution. Employees turned

against one another as a result of Microsoft's stack ranking algorithm's use of bell curves. The

approach is not only inconclusive, but it also penalizes people disproportionately for tiny

performance reductions. Several employees quit as a result of this during this time period.

When Microsoft shifted away from stacking ranking in 2013, managers started using a

technique called Connects, in which workers get real-time feedback without having to take a
test. Rather than numbered rankings, it's about the workers' influence over the previous two

to three months, their predicted future effect, what they've learned from various scenarios,

and how they've grown professionally.

Summing Up Ballmer’s Era

While it's tempting to blame Ballmer for Microsoft's missteps, this isn't totally accurate. The

underlying culprit was bureaucracy. A limited group of top executives is in charge of

defining strategy and direction in a hierarchical organization. A special blend of foresight,

curiosity, and originality is demanded of those at the top. But, in fact, this isn't always the

case.

However, while Gates and Ballmer should be congratulated for hiring Satya Nadella, a CEO

who would challenge Microsoft's oppressive PC dogma, their outmoded thinking had long

been detrimental to the company. To them, a phone was just that: a phone, not a pocket

computer. In 2007, Ballmer famously stated, "There's no way the iPhone will get any major

market share - no chance." Later, he said that if he had been less short-sighted, Microsoft may

have foreseen Android, a wasted opportunity that cost the business $400 billion in market

value.

2016 Onwards

Forging Ahead

When Satya Nadella took over as CEO in February 2014, Microsoft seemed to be on the

verge of becoming outdated. When he took over as CEO in 2014, he wrote in a statement to

all employees, "We need to prioritize innovation that is focused on our fundamental purpose

of empowering individuals and organizations to 'accomplish more." At Microsoft's global

market conference in Orlando in July 2015, Nadella announced a new company mission: "To

enable every individual and every organisation on the planet to accomplish more."
Throughout this decade, the organization has developed and secured its existence by

identifying several essential principles: “From struggle to grace”, “Spot. Stop. Swap”,

“Redefine equity”, “Keep it personal”, “Infinite learning”.

Furthermore, the performance-stacking system has been phased out in favor of constant

feedback and coaching, as well as a remuneration model that offers managers greater

authority autonomy.

Under Nadella's leadership, the corporation decreased funding for Windows and built a major

cloud computing business, generating $34 billion in sales last year, putting it ahead of Google

and making significant progress against Amazon Web Services." Microsoft has moved away

from proprietary hardware and software for phones. The company's business strategy is

around subscription-based income.

Hiring

Because they want to hire the greatest people and long-term retention is vital to their success,

Microsoft takes recruiting and selection, training and development, performance evaluation,

and incentive management extremely seriously. As a result, they hire people based on both

their potential and their existing capabilities. Microsoft makes a concerted effort to hire the

best people. It works with schools and institutions to discover potential employees and meet

their workforce requirements. In today's business world, knowledge personnel must be

managed successfully since they are critical to a company's success. The current connection

between employees and the corporation is governed by a psychological contract. This is

especially important for companies like Microsoft, where workers' competencies, skills, and

knowledge dictate market orientation.

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