Changes at Microsoft: A New Employee Perspective

Sunday, May 21, 2006

I'm a relatively new Microsoft employee. I've only been with the company for a few months, so I have a limited perspective about the changes that have recently been announced. For those who don't work at Microsoft, Microsoft has started an initiative to address the very serious problem of employee retention. It seems there are many Microsoft employees who have been unhappy with the current setup. A summary can be found at Mini-Microsoft. For those who are not associated with Microsoft here are the highlights.

  • The Curve is gone (sort of) - Microsoft had this system where you were graded on a curve from 2.5 to 5.0. Managers were forced to rank people and could only give out so many 5.0, 4.5, etc. That meant that if you were on a really strong team, and worked your ass off, you might still only be judged a 3.0 or slightly worse than average. This affected your compensation and bonuses.
  • More stock awards - Microsoft announced they will give out more stock awards to the very best performers. Stock bonuses are still based on a curve which will have a forced distribution. This is why the curve is only sort of gone.
  • Towels are back - I'm new so I never missed them but this got a lot of applause at the town hall meeting. I don't get what the big deal is about towels but I suppose it is symbolic of how Microsoft was screwing employees by taking away benefits. It is one of those small things that have an unproportinal negative reaction.
  • More workplace benefits – Microsoft has added even more workplace services like longer cafeteria hours, dry cleaning, and grocery delivery (all services employees must pay for)

There are a few more initiatives but this captures the highlights and the things that seem to be getting the most attention from Microsoft employees.

So here is my take as a new Microsoft employee.

The Curve is the most controversial thing at Microsoft. People hated it. I don’t necessarily have a problem with it. I think employees need to be differentiated. Not everyone can be a top performer. It’s just not possible. That being said, I think its silly that you have to tie someone’s review score to some forced distribution. If you really are a good contributor on a great team, you should not be penalized against someone who is a OK performer on a really weak team. Further the idea that your score follows you for the lifetime of your Microsoft employment seems a little ridiculous in my mind. I could understand if your most recent review score had an impact on your current one but the idea that you have some sort of Lifetime average seems wrong in my mind. This is coming from a guy who has always historically done very well in his career and had the intention of always being ranked among the best.

However the curve is not gone, and I don’t believe it should be. Stock bonuses are still going to be distributed on a forced distribution with the very best getting the best rewards. I know some people hate this idea but quite frankly those are the people who you might not want to work with anyway. Look, you have to pay top performers more money. Top performers drive a company. If you don’t pay them, someone else will, and then you get a company full of good but not great employees. But even that will cause the only good people to leave as they are now the ones who bear the burden of work but don’t reap the rewards. If I do not end up being one of the top performers who get the most rewards so be it. I don’t care what the reason. People complain that the rewards simply fall to not the best workers, but the workers who are best at kissing ass. So be it. If this happens to me, I will simply leave the company. I would refuse to work at a company who is going to reward kissing ass over my hard work.

A loud complaint is that base compensation was not discussed and there seems to be no plan in the works to increase this. My reaction, tough. The comment I hate the most is “I could get x% more working at Google.” My response is, why don’t you go work for Google then? First off, most of the people complaining probably couldn’t get a job at Google, if they could they would jump ship immediately. And even if they could, they probably would not get the pay increase they would expect. But seriously, why complain about it? We live in a free society. If you can get more money somewhere else, there must be a reason for you to stay at Microsoft. Microsoft can’t force you to stay. I don’t care what the reason is. I don’t care if it’s a personal reason like you can’t leave the Seattle area for whatever reason. There clearly is not incentive enough for you to change your job, and that choice is solely yours. So quit complaining about it.

And the towels. I just don’t get it. I don’t get why it was ever a big deal. It is one of the first rules of benefits at a company. Don’t start a benefit if you think you may have to someday take it away. Why? People love to bitch about how things use to be and complain very loudly when even the smallest benefit is taken away.

Let me give all MS employees some perspective. We work at one of the best companies in the world. If you took the average compensation of all MS employees, it would have to be among the highest in the world. We get so many benefits, I don’t even know where to begin. The health plan is ridiculously comprehensive. The work schedule is extremely flexible. We get discounts on products we actually want to use. Free gym membership. Free soda. Free bus pass. The list seriously goes on and on. How can I say this? Because I’ve worked at other places. I’ve seen what is on the other side and believe me, the grass is not always greener. I worked four years at my last company and didn’t get half the benefits I do today. A worse health plan, no stock awards, no discounts. I was even lucky to get a free lunch once a year, and I was a manager with a budget! Compensation? That was a joke. I was one of the lucky ones that got a raise during my tenure there and that was because I got a huge promotion.

I seriously think that people that those that are the most dissatisfied working at Microsoft should go find another job. I am not saying that to be mean. I hope that if you do leave (and you are a top performer) you come back to Microsoft some day. You just need to get some perspective.

I’m not saying Microsoft is perfect. Even in my short time here, I’ve realized that there are some serious problems that should probably be addressed. I hope to help be part of the change that revitalizes this company and turns it around. But the notion that somehow, Microsoft does not do right by its employees is just plain wrong. If you think otherwise, I know Google is hiring.


Kat said...

i don't get the towels thing. towels in the gym? in the employee showers? towels for what? and on the importance of towels... see the wiki.

T said...

In most buildings, Microsoft has showers. This is for people who run/walk/bike into work and want to take a shower.

I guess Microsoft use to provide towels in those shower rooms but during a cost cutting mission, decided that it would no longer provide them. Employees were thus forced to bring in their own towels.

Personally, I think this is a silly battle which I don't care that "we" as Microsoft employees won. I personally know very few people who use the shower facilities and if it cost us all a lot of money to provide for those few people, I think it is an expense worth cutting.

Kat said...

watch out, your bosses are going to come over and shout, "promote this man! he understands!"

Anonymous said...

If a company offers showers, the towels seem like a small additional expense. And, once given, taking it away seems like petty cost-cutting move that totally ignores the morale factor that was considered in providing it. It is trivial on a strictly logical accounting basis, but perks become part of a culture and taking away even a small one is a symbol of changing culture where (perhaps they fear) the employees becomes slaves to the nitpicking corporate accounting overlords (like me).

T said...

Yes John, I think you nailed it on the head. The towel issue in itself is probably no big deal. Nobody would have ever complained if the benefit was never there.

I think it is what you wrote. That is became much more a symbol that the culture was changing rather the the actual act itself.

Jenny said...

About the curve...could they give you perhaps two curve scores? Like maybe a score for your work and a score for your team's work. Then, when they factor for the bonuses, etc., if you happen to be on a great team but are not the best player, your contribution would still be worth a little more than a more average worker. I think that might make it more

David Cho said...

Saw this clip that somebody sent me.

It's Steve Ballmer acting like he is on crack before his presentation to the tepid applause from the audience. Of course, he "loves" the company. What is his compensation package? I am sure Ken Lay "loved" his company too, and he may still do.

Always hated this kind of corporate rah rah crap which I thought was cheesy and juvenile, and I'd be sitting there shaking my head which I did at my former companies. Roger at GNP never did that to my gratitude.

Well, I hope it was an isolated incidence.