At Microsoft, it is believed that people are developed through challenging and engaging assignments.

They used their ‘n-1’ philosophy to ensure people have exhaustive assignments. Besides this, the company encouraged its employees to switch jobs to develop a person and keep their interest. During a project, new hires learned a lot working under their seniors and it was the responsibility of the senior level employees to help in development of thousands of employees. As John Agnew, director of executive and management development said ‘we put great faith in development through coaching and mentoring.We have such great people that most of them have grown with leaps and bounds’. (Harvard business review, 2001) Benefits and Rewards The company’s approach to pay and benefits is based upon simple principle that the people are the most valuable asset.

That is why they created a reward system that enables the employees to share in the success. This helped Microsoft to retain its employees with new schemes and options. The company has provided its employees with number of benefits like medical, vision and dental benefits, life and disability insurance and a group legal plan (Amore.J, 2004).

Many benefits schemes were rolled out by the company like pension contribution, extra three day holiday, and critical cover. (Anonymous, 2003). All these schemes are customized according to the employees needs. To maintain a balance between work and family the company has introduced many schemes like free admission to Puget Sound attractions, annual picnic and bring your daughter to work, dawn to dusk charity softball marathon and Microsoft theatre troop. (Amore. J, 2004).

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Recruitment arises out from a gap between forecasted demand and forecasted supply of skills competencies needed to meet company plans. The recruit plan arises from human resource department and is concerned with attracting the right employees to give the organization a competitive edge, to grow and develop these employees to enable them to make a major contribution to organization effectiveness. Successful recruitment depends upon finding people with necessary skills, expertise and qualifications and has a potential foe development.(Cornelius. N, 2001) Work environment Good working environment is important for employee morale and productivity. It incorporates many factors like job satisfaction, life satisfaction and levels of pleasant emotions and moods and low stress related problems. It also has other beneficial outcomes like greater ability to attract new employees, better communication between employees, lesser absentees, greater employee commitment towards organization and an increase in customer satisfaction.

A good working environment has lot of advantages like employee enthusiasm, group cohesiveness, and employee satisfaction. But such type has got some disadvantages as well like interpersonal conflicts, respect among co-workers, and respect from higher ups and work taken seriously by other departments. But HR manager do not see these disadvantages as real threat as this has a very minor effect. Some managers fear that it would lead to productivity loss or produce unnecessary cost and unprofessional attitude.To conclude this, good working environment will fetch great benefits both for organization and the individual (Ford. R et al, 2003) Employee development Successful employee development is changing attitude and motivation before changing behavior. Polices used by the company has negative and the positive impacts like.

According to the philosophy of bespoke approach, ‘Employee development means exactly that – developing the skills of each employee in a way that brings out their skills rather than forcing them into a mould with which they are not comfortable.Altering roles within the group provides participants with a greater awareness of their own skills and those of their colleagues, and challenges them to take on new and different roles within the group – a valuable lesson for the workplace (Beckwith. A, 2003). Company’s policy of switching jobs and failing in projects does not breed fear among there employees. This helps employees from trying new methods and processes which helps in the development of the employee.

Linking rewards to performance Human capital index shows that use stock options grants enjoy 9% higher shareholder value.Most of the Microsoft policies fall under this category. It works because it is a human nature as people only do what they like means that if they get good returns of their effort.

As company structures there schemes properly the employees also works hard for the success of the company. But the company fails to determine the good and the bad performer which it ignores as this would create misunderstanding between the employees. An HCI research on stock options shows that as this makes the employee wealthier and a part of the company which makes them work more efficiently.Employees perform better when their incentives are linked to “line of sight” objectives, namely, those that are closer to home, rather than at the corporate level. (Pfau. B ; Kay. I, 2002) It is also called as ‘synchronized pay’ and when it is done well, it unites a workforce.

Allowing most or even all employees to participate in reward plans puts the entire workforce squarely in the same boat. The employees share risk and they share reward. They are similarly motivated toward what is in the company’s interests.Furthermore, synchronizing pay creates the opportunity to reward-and therefore attract, retain and motivate-outstanding employees at all levels. If variable pay and stock options are only available at the top of the company, then the only reward for the rest is their salary program.

That is not enough to create the kind of high-performance culture that produces top shareholder returns. Without this, it would result in a demoralized and less productive workforce. It makes the employees to think more like owners, thereby improving company performance.Nevertheless, stock options are not without their controversy and challenges.

On the flip side, stock options may generate a low level of work motivation because there value is strictly driven by the market forces rather than the firm’s performance alone. This leaves the individual employee with a limited influence over the financial posture of the company. This generate weaker levels of work motivation and their value is determined by market forces over employees has no control. (Kraizberg. E et al, 2002)This scheme also is a major setback for the company as employees as employees changed them into stocks and sold them which defeated their fundamental of making employee as the company’s share holder.

This made most of his employees millionaires because of this stock option which made the employees future more secure which made the staff worried about lack of motivation on staff. (Anonymous,1999) Increasing the base pay Microsoft increased the base pay of its employee that positions them in the market 0. 7% more. This scheme helps them to attract the best and the brightest and those who likes to work for the company’s success.Not paying the employees what they deserve makes the company suffers in their stock prices (Pfau. B ; Kay. I, 2002) This scheme turned out to be very successful as attrition rate for the technical staff is around 2% and for non-technical staff it’s around 7 %. ( Rigby.

R, 2003) Pay for performance When top performers are paid significantly more than average performers, shareholder value is 0. 8% higher. The link between employee’s performance and the amount of incentives he receives in return appears clearly established and straight forward.This scheme produces high level of work motivation and improved performance as rewards are directly dependent on individual performance. This scheme can help attract and keep achievement oriented people. It also helps in retaining good performers by satisfying there needs (Beer.

M et al, 1985). In other schemes like stock options, high performers and low performers earn the same benefits and employees who have contributed to company’s financial success will have a perception of inequality. (Kraizberg. E et al, 2002).