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Microsoft is one of the wealthiest and most successful companies in the world. Even more important, from a human resource perspective, is the fact that Microsoft is an employee-driven organization. While other organizations base their success on better manufacturing techniques, or better technology, Microsoft’s success is based on the effectiveness of their employees. Essentially, Microsoft value their staff and realize the importance of their staff. This focus on employees may, in the future, expand to all organizations. Microsoft then, is worth studying as an example of best practice in human resource management.

This study will focus on Microsoft’s employee management methods including how they recruit and how they retain their staff. By looking at how Microsoft operate, there is opportunity for other organizations to consider how they manage their employees and to consider whether their staff are also valued.

Firstly, the study will present information on the human resource practices at Microsoft. Secondly, the study will analyse these practices with a view to showing why they are effective.

HUMAN RESOURCE MANAGEMENT AT MICROSOFT

Recruitment and Selection – In the Beginning

Bill Gates is the driving force for Microsoft and from the beginning of the company he believed in recruiting extremely intelligent staff, favoring intelligence over experience, “his preference for hiring extremely intelligent, not necessarily experienced, new college graduates dated from Microsoft’s start-up days, when he and cofounder Paul Allen recruited the brightest people they knew from school – their ‘smart friends’” (Bartlett 1).

From the beginning Gates realized that his employees were his greatest assets, shown by his quotes including “it’s the effectiveness of our developers that determines our success” and “take our 20 best people away, and I will tell you that Microsoft will become an unimportant company” (Bartlett 2).

Microsoft’s recruitment strategies reflect their philosophy. They sought the smartest and the most driven people and did so aggressively, as Steve Ballmer says “whenever you meet a kick-ass guy, get him” (Bartlett 2).

The recruitment strategies in the beginning included sourcing people from the elite educational facilities such as Harvard, Yale, MIT, Carnegie-Melon and Stanford. Microsoft recruiters would visit these universities “in search of the most brilliant, driven students” (Bartlett 2). Experience was not required and it was in fact, preferred that new employees had no experience.

Once selected, these students had to undergo a thorough selection process. The first stage was an interview “by at least 3, and sometimes up to 10, Microsoft employees” (Bartlett 2).

These interviews were designed not to test knowledge, but to test “thought processes, problem-solving abilities, and work habits” (Bartlett 2). Technical interviews are described as being focused mainly on problem-solving, with interviewers posing problem scenarios. To test the composure of the candidate and also their creative problem-solving skills, unexpected questions were also included. Two examples of these questions given are “how many times does the person use the word ‘the’ in a day” and “describe the perfect TV remote control” (Bartlett 2).

After the interview, interviewers would e-mail their decision on the interviewee with the words ‘Hire’ or ‘No Hire’ and comments on the problem area, the future interviewers would then use these comments to further investigate whatever issues there were with the interviewee (Bartlett 3). This interviewing process was essentially a ‘make or break’ one, where interviewees were pushed to their limits, if they thrived and survived this meant they would also thrive and survive in the Microsoft working environment.

After this series of interviews, if the majority of interviewers were favorable the interviewee would finally meet with their manager and this manager would make a final hire/no hire decision. The very last step is an interview by someone outside the hiring group, this person is independent and so unbiased in their opinion. This person is meant as a final check that the person is a good Microsoft person and also to prevent managers from hiring the wrong people because they have a need to fill a certain position (Bartlett 3).

The importance of hiring the right people is also shown in Microsoft’s ‘n minus 1’ strategy which means less people are employed than are required. This policy reinforces that hiring the right people is more important than hiring just to fill a position.

Recruitment and Selection – Later Stages

Microsoft retained the same basic principles as they expanded but had to change their methods when the number of new employees required could no longer be sourced only from universities.

The recruiting practices continued to be active rather than passive, with Microsoft ‘head hunting’ the best staff. These staff were found, monitored and recruited from other companies by over 300 recruiting experts, “once someone had been identified as ‘hard core’ – Microsoft’s euphemism for the kind of highly talented and driven people they sought – the pursuit was relentless, if subtle. Regular telephone calls at discreet intervals, conversations at industry conventions, invitations to formal dinners – recruiting team members employed every means possible to keep the lines of communication open” (Bartlett 9).

Microsoft also took advantage of breaking opportunities such as company layoffs, one example is with the AOL down size, “when we heard AOL was downsizing Netscape’s operations in the valley, we assembled a team to identify the best talent and go knocking on doors” (Bartlett 10).

Employee Satisfaction and Loyalty

Microsoft attempted to cater to the needs of its employees from the beginning. Recognizing that the majority of employees were just out of college, the Microsoft company operated like a campus. The former director of human resources describes this saying, “how do you make young kids who had never been away from home – or only as far as college – comfortable? We wanted to keep the atmosphere at work one they were somewhat familiar with, and also make sure it gave them a sense of social belonging” (Bartlett 4). This environment also included every employee having their own office they were free to decorate as they please and the provision of subsidized food and drink (Bartlett 4).

Employee satisfaction was also afforded by the opportunity for growth, “development also occurred by encouraging horizontal transfers, and employees were encouraged to develop themselves by switching jobs” (Bartlett 6).

It is noted that few employees leave the organization by dismissal, with the majority leaving voluntarily (Bartlett 10). Concern over high attrition rates in the 1990s led to surveys to find the cause of the problem and for changes to be implemented. One of the major changes was the requirement for top management to coach lower levels, assisting in their development by doing so. This became known as ‘turning over the keys’ (Bartlett 11). This is important because it allows people an opportunity to develop further. Also critical to the changes was a new focus on empowering people and of defining clear goals. These changes were all designed to increase employee satisfaction and commitment to the organization, while maintaining the same spirit the small company began with.

Employee Rewards

In the early days Gates was a firm believer that employee ownership was critical in raising motivation and employee retention, in lieu of high salaries he offered employees equity (Bartlett 7). Once listed on the stock exchange, this continued, with the company offering stock options to employees based on performance.

Critical to this is the link between individual performance and rewa
rd, with semi-annual performance reviews linked to pay increases, bonus awards and stock options (Bartlett 7). Performance goals employees were measured against were specific measurable ones, these performance objectives shortened to SMART: Specific, Measurable, Attainable, Results-based, and Time-bound (Bartlett 2). This formal review system also included more common evaluations by managers to ensure no unexpected deviations. The system also included the process of employees evaluating themselves, these self-evaluations then being sent to the manager who does their own evaluation. The employee and manager then meet to discuss the review (Bartlett 8).

Stock options awards are based on whether the employee is considered a long-term asset of the company and awarded on this basis. This is an important symbol of Microsoft’s commitment to retaining good employees.

ANALYSIS OF HUMAN RESOURCE MANAGEMENT AT MICROSOFT

Recruitment and Selection

It is reported that companies must be aware of where they are going in the future and how the current configuration of human resources relates to this (Noe et al., Ch.5).

As we have seen, Microsoft employ different recruitment practices than many organizations based on their need for the very best people. Microsoft actively recruit suitable employs and focus on the right type of person rather than the right type of skill level. In ‘Human Resource Management: An Experiential Approach’ (Bernadin & Russell) human resources are described as an important source of competitive advantage. Microsoft use human resources for competitive advantage, basing their success on having the very best people in the industry and inspiring them to be the best. It is this that leads to Microsoft’s unique recruitment practices. Based on the importance placed on having the best people in the industry, their aggressive ‘head hunting’ techniques are justified.

What is most crucial here is that Microsoft’s recruitment practices meet their human resource needs. It is an important sign of the focused approach of Microsoft, with their actions always leading towards their ultimate goals.

Some important factors to be considered in recruiting staff include that the recruiter should be from the same functional area and that candidates should not be deceived about the negative elements of a job (Noe et al., Ch.5). The interview process at Microsoft reflects this with the new employee being interviewed by the manager. The recruitment process also goes further than just informing the employee about the negative aspects, instead the recruitment process actually tests the employee on the negative aspects, putting them under the same type of pressure they would be put under on the job. This is an effective method, as it can be ascertained, that if the employee is successful in the selection process, they will be successful within the organization.

Employee Motivation

McNamara says that “the key to supporting the motivation of your employee is understanding what motivates each of them.” The important thing about Microsoft is that they employ people who specifically will be motivated by the environment they provide. They do not employ skilled people and expect them to be motivated, they employ intelligent and driven individuals and give them the environment and the opportunity to develop beyond their current level. The fit between employee and organization is important to motivation and this is what Microsoft ensures.

A recent study reported in the Journal of Applied Psychology reports that employees working on projects are more efficient when their goals relate to the overall team goals rather than individual goals (Kristof-Brown). Microsoft ensures that the goals of the organization are understood via its strong culture and by employees being clearly aware of what is required of them.

Motivation can be described as providing a work environment in which individual needs become satisfied through efforts that also serve organizational objectives (Schermerhorn 395). Microsoft achieves this by incorporating their goals into their human resource management programs. The people recruited and the systems within the organization all serve to motivate the type of people that Microsoft values.

Employee motivation can also be related to Maslow’s hierarchy of needs theory. This theory has the top level of the needs theory as self-actualization needs, which is a persons need to be self-fulfilled. It is described that the way to achieve this is to “provide people with opportunities to grow, be creative, and acquire training for challenging assignments and advancement” (Daft 530). This is exactly what Microsoft provides for its staff and also exactly what it expects, for them to be the very best they can be. One employee of Microsoft describes this saying “the only way to achieve here is to push the envelope of what you can do. Every day try to do better. Work smarter. Work harder. Innovate more. People are focused 100% on performing their job as successfully as possible (Bartlett 5). The link can also be seen here between the type of people that are employed and what is expected. Microsoft hires the very best people, for these people to achieve self-actualization they need to be pushed harder than most and given greater opportunity to achieve than most.

Employee Loyalty and Satisfaction

We have seen that empowering employees is one of the new approaches being utilized by Microsoft. It is noted that empowering employees requires a culture that reflects this (Billsberry 292). In the Microsoft case we see that a change of culture is actually the reasoning behind the introduction of empowerment, suggesting that the change is considered and will be successful.

Employee loyalty and satisfaction is also assisted by Microsoft’s consideration of its employees. We saw that in the early days, the company largely consisted of young graduates and the company built a culture around the needs of this group of young graduates. This process has continued, with Microsoft always attempting to cater for the needs of its employees.

The latest attempt is by providing greater opportunity for younger employees, by having older employees coach them.

Three aspects of tasks that affect job satisfaction are job complexity, degree of physical strain and perceived value of the task (Noe et al., Ch.10). Microsoft manages this by providing the high complexity high achievers require and by ensuring the perceived value of the task is high. This high value is communicated via the high-achieving culture the company maintains.

This issue can also be looked at in terms of an employee’s role. There are three factors associated with roles: role ambiguity, role conflict and role overload (Noe et al., Ch.10). Role ambiguity is kept low by Microsoft because of the consistency in the culture and in what is required, role conflict is also kept low. Role overload is kept high, with employees pushed to their limits. In most organizations this would be a concern, but Microsoft’s awareness of this means that they specifically seek employees who will react well with role overload.

Employee Rewards

In ‘Ideas That Will Shape the Future of Management Practice’ (Bohl, Luthans, Hodgetts & Slocum) human resources is described as being the way of the future with it being argued that we will see a more mature articulation of the importance of people as a firm’s only sustainable competitive advantage. The change is described as giving high reward for high performance with the focus on a partnership.

As we have seen, Gates recognized the importance of his people from the beginning and this is reflected in the reward systems, that not only rewards for current achievement but rewards stocks to those that are seen as valuable future assets of the company. This can be seen as a prime example of the focus on a partnership, those that are seen as being valuable to the company, are rewarded with shares
that will increase in value even as that person assists in moving the company forward.

Important to the reward system is also the fact that there are two reward paths available, one for those following the technical path and one for those following the management path. The skills of employees can be divided into three areas: conceptual skills, human skills and technical skills. Typically, conceptual skills become more required and technical skills less required as one moves up the corporate ladder (Daft 15). Microsoft is a company valuing technical skills, due to the nature of its product. In most organizations, employees with conceptual skills would be rewarded by moving up the corporate ladder, while those with technical skills would not advance. Microsoft, however, offers two advancement path, allowing those with technical skills to advance as technical experts, just as those with conceptual skills advance as managers.

Reward systems are an important part of organizational culture, they communicate to employees what is valued by the organization (Robbins, Bergman & Stagg 84). By having these two reward systems, Microsoft effectively communicates that both sets of skills are valued. This is also an important sign of Microsoft’s consistency. They recruit people for technical ability and so not rewarding for it would be dissatisfying to employees.

As a business owner you want to be able to utilize your advertising spedning wisely and get the most return out of your marketing. With these marketing examples, maybe you will be able to lift your business to the next level by sparking some interest.

Rob Walker of Fast Company suggests user generated content. experts believe that the future of advertising belongs to the consumers. Experts who extol the benefits of co-creation suggest that brand owners must not only allow, but encourage consumers to participate in marketing their products. The motivating factors that cause amateurs to co-create appears to be co-promotion.

According to Brand Week, “the marketing strategy and advertising campaign for children`s television network Nickelodeon`s line of kid centered electronics, which is called Npower. The line includes digital cameras, Mp3 players, electronic alarm clocks, and compact disc players. According to research conducted by Nickelodeon young people are looking for more advanced electronics, and not just the toy version of them, which is why the marketing strategy is more sophisticated for the Npower line.”

So is coming up with new ideas and tricks the way to go? American car manufacturers think so. Nel Boudette of the Wall Street Journal reported on the “aggressive marketing tactics, including the creation of false companies which allow consumers to test drive American made vehicles from their homes, which Detroit, Michigan automobile manufacturers, including Ford Motor Corp, and General Motors Corp. are implementing in 2007 in an attempt to persuade import buyers to consider buying a n American made automobile.”

If you are online business, more interactivity with your clients and potential clients seems to be the experts way to go. Mike Shields of Media Week claims, “websites such as USAToday.com are making their sites more interactive by allowing readers to post their own comments online in order to engage their audience. Other websites that are participating in these engagement tactics include Forbes.com, TVGuide.com, and WashingtonPost.com. Many people support this marketing strategy, but some think it is too difficult to monitor the quantity of user comments that come in.” Jeri Clausing of Travel Weekly agrees with this assessment, saying, “the potential impact of the phenomenon called social media on the world of marketing.” Travel technology consultant Cindy Estis Green predicted “that travel companies will be affected by the evolution of the Internet into a huge conversational marketplace.” She adds that “social media will not only change the way Internet marketing is done, it will also change the way marketing is done.”

And believe it or not e-mail campaigns may still work. Joseph Curly, senior e-marketing coordinator at Nassau Educators Federal Credit Union, shared that his firm uses a practical, simple web site and advertises products within emails about financial information sent to clients. Make sure you only email those customers who have agreed to receive your corespondance, otherwise it will be looked at as spam, and that will creative a negative affect on your products, services and company character.

Many companies constantly change their marketing strategy to attract new customers, yet at the same time keeping the existing ones. Above are some great examples of that, that may fuel some inspiration to get your creative marketing spirit going.

By: Michael C. Podlesny

Warner Springs Ranch had its beginning back when ranch founder John Warner was given 48,000 square acres just for becoming a Mexican citizen.

Of course, Warner had a little pull: he had married Anita Gale, who was raised as a ward of the soon-to-be governor of California. For a 37-year-old Connecticut native, Warner had done well for himself.

Warner’s little piece of Mexico – dubbed Valle de San Jose – was renamed Warner’s Ranch and, by the late 1840′s, this idyllic stretch of property became the only inhabited stopping place for wagon trains and Butterfield stagecoaches between New Mexico and Los Angeles. The ranch was located in eastern San Diego County and was once visited by famous stagecoach travelers including President Teddy Roosevelt. Grant, and many other notables.

One of the main attractions in those days was the hot mineral springs that were included in Warner’s little gift from the Mexican government. One can only imagine how good this early-day hot tub felt for those tired stagecoach travelers after a hard day of fighting Indians or just riding in a rickety wagon on washboard roads. The California Spa experience had been born.

Somewhere along the way, Warner’s oasis became known as Warner Springs Ranch and its proximity to Los Angeles – just a hundred miles or so – made it popular with Hollywood stars such as Mary Pickford, Douglas Fairbanks, Gary Cooper, Jean Harlow, Clark Gable, John Wayne and Bing Crosby. Clearly, Warner Springs Ranch had passed the test of time, and that has since led to several generations of California families who have grown up enjoying their vacations in Warner Springs.

Whether coming from San Diego or points north, the drive to Warner Springs Ranch takes you through and around 6000-foot mountain ranges, across high-desert plateaus and along winding rivers and streams – which, thanks to this winter’s rains, actually have water in them. It’s a pleasant drive far away from the bustle of the city and light-years apart from the Southern California beach experience that is, as the crow flies, about 40 miles away.

At the end of your journey is the ranch, nestled in the foothills of Palomar Mountain. For a resort offering 240 cottages, we noticed on a recent visit that it doesn’t seem nearly that expansive from the road. Warner Springs Ranch really is like a small town by the side of the road that doesn’t offer much of a hint about what’s inside this gated community. Once inside, however, we could see that there was much to explore and do without even leaving the ranch.

First stop was our adobe cottage. Obviously built many decades ago, this house included a spacious living room area with cathedral ceilings and a couch that folded out into a double bed. The thick adobe walls – about two feet wide measuring the window insets – keep these units cool year around, but a stone fireplace was at the ready. Adjacent to the living room area was a bedroom and bath area. Nothing in our unit was particularly fancy and many might consider the accommodations and furnishings rather rustic. But that’s part of the charm of visiting a historic ranch.

Right in the center of it all is the hot springs area, which has a kind of historical flavor. The water is piped down to a 100-by-48-foot pool where the temperature is kept at a steady 104 degrees. Within minutes of our arrival we were joining another few dozen guests relaxing and luxuriating in the soothing waters. This pool just seemed more civilized that many of the wilderness hot springs we have come across. Private changing rooms were at pool’s edge and there was none of the nudity you often find in mineral springs that are more remote.

Next to the mineral pool is a standard pool of about the same size, and heated to between 75 and 85 degrees year-round. But there is much more to do at Warner Springs Ranch than soak or swim – for the active vacationer, there are many more attractions including a 6,892-yard, par 72 golf course, several tennis courts – a pro is on duty to give lessons – and another major part of the ranch, horseback riding.

While we didn’t get a chance to saddle up during our brief visit, there are regular rides along an extensive system of trails, each offering different views of the valley and neighboring mountains. One of those trails is the Pacific Crest Trail, where we did set out on foot for an afternoon, envisioning what it must be like to hike this trail from the Canadian border all the way to Mexico. As Arnold would say, our little hike was more the girlie-man version of the PCT, but none the less scenic and seemingly just as remote. The advantage, of course, was we would sleep in our cozy cottage and dine in style at the resort’s Anza Dining Room.

The Anza seems to be the social center of the resort. As mentioned previously, generations of Californians have been coming to Warner Springs Ranch and many of the cottages are privately owned, encouraging frequent trips back to the ranch. Sit down for dinner in the Anza and you get the feeling that most people in the room are friends or vacation acquaintances. On a given Saturday night it’s not a quiet, romantic dinner spot – the room is more like a dining hall – but the food is expertly prepared, and the buffet option loads you up with several gourmet entries for under $18.

Near the Anza is the Cantina, a colorful bar located in the actual adobe where John Warner lived when he took possession of the ranch. The only nightlife in the area, the Cantina comes alive with bands and entertainers on any given Saturday night.

If you are able to stay any length of time, there are many attractions in the area that are either adjacent to the ranch or within easy driving distance. If you always wanted to go up in a glider, the Warner Springs airport is just a couple of miles from the ranch. The thermals over the ranch area provide a significant lift for the gliders operating out of the Warner Springs airport and, on weekends, it’s not uncommon to see flight-after-flight of sailplanes taking tourists up for a quick look at the valley from an engine-less aircraft. The gliders can seat two guests side-by-side.

Julian is a historic gold mining town that is less than an hour’s drive from Warner Springs. A frequent getaway for San Diego area residents, Julian offers an Old West main street with colorful shops, restaurants and old-time bars. In summer, western gunfights are sometimes staged on Main Street.

In fact, Warner Springs and Julian are great bookends for California’s history – a visit to this part of San Diego County will make you wish you’d gotten your own little 48,000-acre piece of this gorgeous California countryside.

AT A GLANCE

WHERE: Warner Springs is located about a 90-minute drive northeast from San Diego, or about two and a half hours southeast from Los Angeles.

WHAT: Warner Springs Ranch is a historic resort that, over the years, has provided many vacation memories for many Californians. Today it has evolved into a complete resort with lodging, three restaurants, a spa, golf, horseback riding, tennis, and many more activities.

WHEN: Year-round. While the area can get a little warm in summer, the climate is generally temperate because of its 3,000-foot elevation. It gets its share of San Diego County sunshine.

WHY: It’s a family resort – nothing too fancy, although you’re apt to find lots of luxury cars parked by the adobe cottages. Numerous activities on the ranch and nearby will keep you busy for even long vacation periods.

HOW: For more information on Warner Springs Ranch, phone 760-782-4200 or visit www.warnersprings.com. Accommodations start at $160 for a weekend night for two people including breakfast. Sailplane adventures start at $120 for a 20 minute ride for two people.