Microsoft
Microsoft
3
ICMR Center for Management
Research
Microsoft India’s HR
Practices
This case was written by Besta Shankar, under the direction of Ramalingam
Meenakshisundaram, ICMR Center for Management Research (ICMR). It was compiled
from published sources, and is intended to be used as a basis for class discussion
rather than to illustrate either effective or ineffective handling of a management situation.
To order copies, call +91-40-2343-0462/63 or write to ICMR, Plot # 49, Nagarjuna Hills,
Hyderabad 500 082, India or email [email protected].
www.icmrindia.org
HROB/123
Microsoft India‟s HR
Practices
“We have a talent agenda and we need to, because in any intellectual property-driven business,
our assets walk in and walk out every day. If we are to remain competitive, we have to give them a
1
proper environment to shine through, so that they stay with us.”
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- Ravi Venkatesan, Chairman, Microsoft India
“Once a year, we take a deep dive to look at key people, key positions, the existing succession plan
and developmental needs. We aim to identify or develop at least two 'ready now' and 'one move
away' candidates for each key position. The idea is to facilitate planned career moves, especially
3
for our leadership bench.”
- Joji Gill, Director-HR, Microsoft India
“My experience in Microsoft has been exhilarating and rewarding so far. The three things that I
like the most about Microsoft India Global Technical Support Center(IGTSC) are - Employee first
approach, transparency and numerous opportunities for growth - both in personal and
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professional space.”
- Rohit Gulati, an employee, Microsoft India
INTRODUCTION
In 2008, Microsoft India Corporation Pvt. Ltd (Microsoft India), the Indian subsidiary of Microsoft
Corporation
5
(Microsoft), was ranked as number one6 in th e lis t of „Best
7
Comp a nies to W ork for
in In dia‟ surveyed
8
jointly by Business Today , Mercer LLC , and Taylor Nelson Sofres
(TNS) Global . Microsoft India was also believed to be one of the most 9
sought after
companies for information technology (IT) professionals and graduates in India.
1
Kushan M itra, “Microsoft India: A Vista Unlike Any O ther,” http: / / busines stoday.intoday.in,
O ctobe r 26,
2007.
2
Microsoft India is a subsidiary of Microsoft Corpora tion, world‟s leading software p ro ducts and
solutions
provider headquartered at Washington, USA.
3
Neha Sharma, “CEOs in the Pipeline,” www.financialexpress.com, October 14, 2006.
4
www.microsoft.com.
5
“Be s t Companie s to W ork for in India,” http: / / busines stoday.intoday.in, Jan uary 8, 2 0 0 9.
6
Business Today, New Delhi, a division of India Today Group, is a fortnightly business
magazine published in English started in the year 1992.Source:
http://busines stoday.intoday.in(Accessed on May
21,2009)
7
Mercer is a subsidiary of Marsh & McLennan Companies, Inc., US and its portfolio of services
included financial consulting, HR consulting, Investment management and consulting and
outsourcing. It was started in the year 1937 and as of May 2009, it employed over 18,000 people to
serve its clients in 40 countries. Source: www.mercer.com(Accessed on May 21,2009)
8
Taylor Nelson Sofres (TNS) Global is a London based market research firm covering industries such
as Finance, FMCG, Technology, Media, Healthcare and Media. As of May 2009,it offered market
research services in 70 countries across the globe. Source: www.tnsglobal.com(Accessed on May
21,2009)
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Press Release, www.cybermedia.co.in, September 19, 2008.
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Microsoft India’s HR Practices
In early 2009, Microsoft announced the layoff of five percent of its workforce worldwide, as it
10
reported its first drop in revenues in its history of business spanning over three decades . The
company-wide cost cutting measures were applicable to some extent to its Indian operations,
11
where the company laid off one percent (55 employees) of its total workforce. If the economic
situation deteriorated further beyond a point, the company was prepared to prune its headcount
further, globally as well as in India. Did the economic situation also warrant a change in Microsoft
India‟s human resource (HR) practices? Or, were its strategic HR practices in alignment with the
company‟s mission, values, and
strategy?
BACKGROUND
Right from its humble beginning in 1975, Microsoft had been an innovator in computer software
and related services. Its product portfolio included the Windows series of operating system
software for clients and servers, the office productivity suite - MS Office, business applications
software, games, and software for mobile phones and handheld devices. Apart from its software
products, Microsoft provided online services for publishing and advertising, an e-mail facility for
communication, and a search engine for information retrieval and decision support. The
c omp any‟s mission 12was: “To enable people and businesses throughout the world to realize
their full potential” (Refer to Exhibit I for Microsoft‟s value system and its
relevance to the company‟s mission).
For the financial year ending June 2008, Microsoft earned an annual revenue of US$ 60.42
13 14
billion and employed nearly 91,000 people for its operations in 105 countries worldwide. Not
only was it well known for its product innovations but it also won accolades for its employment
and workplace management in terms of equal opportunity for all genders and for minority groups,
long-term employment, fair recruitment processes, careers opportunities for the differently abled,
providing work-life balance for working mothers, and representation of diverse cultures in its
th 15
workforce. It was ranked 38 in Fortune Magazine ‟s List of „100 Best Companies to Work
For‟
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published in the year 2009.
Continuing its expansion of services worldwide, Microsoft started its Indian operations in the year
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1990 setting up Microsoft India Corporation (Pvt) Ltd in New Delhi. Later, Microsoft expanded
its footprint in India by bringing all its six main units of business into the country. Microsoft‟s
business in India (Microsoft India) was organized into the following six groups: Microsoft
Corporation India (Pvt.) Ltd. (Marketing Unit), Microsoft India Development Center, Microsoft
Global Technical Support Center, Microsoft Global Development Center India, Microsoft Global
Services India, and Microsoft Research India (Refer to Exhibit II for more information on
various business units of Microsoft India). Microsoft In dia‟s mission was closely aligned
with
10
Joseph Tartakoff, “Earnings: M icrosoft Posts FirstEver Drop in Revenue; Online Ad Revenue
Falls 16
Percent,” www.paidcontent.org, April 23, 20 0 9.
11
Ina Fried, “Microsoft Sends Second Wave of Layoff Notices to 3, 00 0,” http: / /news.cne t.com,
May 5,
2009.
12
www.microsoft.com
13
www.microsoft.com
14
www.sec.gov
15
Fortune magazine is a biweekly business publication in English language from Time Inc, a
group company of Time Warner. It was started in the year 1930 in US and as of May2009, its
worldwide subscriptions stood at nearly 850,000. Its online version of news publications is
hosted by CNNMoney.com.
Source: http://money.cnn.com (Accessed on May 21, 2009)
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http://money.cnn.com.
17
www.franchisebusiness.in
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Microsoft India’s HR Practices
that of the parent organization (Refer to Exhibit III for the mission of Microsoft India and how
it intended to realize its mission).
Microsoft India had offices in ten cities in India namely Bangalore, Hyderabad, Chennai, Kolkata,
New Delhi, Pune, Ahmadabad, Gurgoan, Indore, and Nagpur and its activities included research,
product development, sales & marketing, and support services with an employee base of around
5,500 people. In terms of headcount, Microsoft India was second only to Microsoft in the US as of
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May 2009.
The headcount at Microsoft India Development Center (MSIDC) at Hyderabad grew from 20 in
1998 to more than 1,500 by the end of 2008, making it the company‟s second biggest
development center
19 in the world (the biggest was the Redmond Development Center in the
United States) .
MSIDC was spread across 54 acres and enjoyed state-of-the-art facilities for employees. It carried
20
out distributed product development work in collaboration with the center at its US
21
headquarters .and also carried out end-to-end product development from India. The facility at
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Hyderabad had won The Acer, Intel & Economic Times Smart Workplace award 2008 for
providing a lively environment by combining technological infrastructure with recreational
amenities to create healthy work-life balance. It was noted that the center closely resembled the
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company‟s facility at Redmond .
MICROSOFT INDIA‟S HR
APPROACH
Managing human resources in the IT sector has been a challenge for most companies that have set
up operations in India. These companies aimed to take advantage of the relatively low cost of
technically competent labor in India as compared to the US and developed countries in Europe.
There was a huge demand for skilled personnel in this sector, but companies confronted by a lack
of sufficient numbers of skilled personnel to meet the demand. In this scenario, many companies
had to develop a strategic HR approach to retain and manage the talent. Microsoft India, for its
part, had implemented employee-friendly HR practices across all its locations in India.
Micro soft In dia‟s HR strategy was focused on building the organizational capability to leverage
the limited human resources to achieve th e compa ny‟s mission. Its HR approach aimed to
increase employee involvement in the company, and used HR metrics to build accountability of
the HR
function toward business success. Microsoft India opted for a flat organizational structure. Senior
executives acted as mentors rather than as bosses.
The company had a separate division that offered solutions and services to business units in the
areas of:
o Organizational capability and change
o Talent management
o Leadership
o Technical training for developers and software architects
18
www.nasdaq.com
19
www.microsoft.com
20
Distributed product development refers to working on same software products from various
locations across the country or countries.
21
www.microsoft.com
22
The Smart Workplace Award was instituted by The Economic Times, a leading Indian
business newspaper, in association with IT companies The Acer and Intel to honor the companies in
India that use technology to provide friendly working environment for their employees and follow
smart work place policies. Source: www.eandwgroup.com.
23
“The Acer, Inte l & Economic Times Smart W orkplace Awards Conclude,” www.indiaprwire.com,
July
22, 2008.
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Microsoft India’s HR Practices
According to Micro soft In dia‟s HR growth mod el, HR was ultimately expected to be a
change leader and business driver. To achieve this goal, it required a sound HR infrastructure
and error- free implementation (Refer to Figure I for Microsoft India‟s HR growth
model). Excellence in execution of the practices was the main pillar on which the foundation
and growth of HR relied
upon.
Figure I: Microsoft India‟s HR Growth Model
Sound
infrastructure Leading change
Errorless
Technology, process,
implementation
policies, programs, Business driver
marketing excellence
Reactive HR Strategic HR
Adapted from “HR Connect,” www.surfgold.com,July 2008
24
Newsroom, www.microsoft.com
25
Kusha n Mitra, “Microsoft India: A Vista Unlike Any Other,” http: / / businesstoday.intoday.in, O ctobe r
2 6,
2007.
26
Newsroom, www.microsoft.com
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Microsoft India’s HR Practices
company identified young professionals with leadership potential at an early stage of their careers
and prepared them for leadership roles ahead at a later stage of their career. Microsoft India‟s
employee development measures served to retain existing employees by providing them with
opportunities for growth.
Career Management
Microsoft India provided both vertical and lateral growth prospects for its employees in all the six
business units present in India. India was one of few countries where all the different business
divisions – Research, Development, Testing, Consulting, Sales & Marketing, and Support – had a
significant presence. Employees could move between the six business units according to their
areas of interest. Moreover, employees were provided with exposure to different business units by
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way of mentoring from senior employees of Microsoft worldwide.
Flexible Work Timings
Microsoft India followed a flexible work timings policy for its employees. A flexi-time policy
enabled the employees to work according to their convenience liberating them from rigid work
timings. Through flexible routines, the company strove to infuse a sense of responsibility and
discipline in its employees, while also building up a rapport with them and among them. It also
served as a retention scheme for employees
Employee Retention at Microsoft Global Technical Support Center (MSGTSC)
For employee retention, Microsoft India initiated various programs particularly in MSGSTC,
Bangalore, where work was carried out around the clock (24 X 7) in order to provide technical
support services to its customers in different nations and time zones. While similar companies in
24/7 working environments faced attrition levels of 17% to 20%, MSGTSC managed to bring the
level down to single digit levels by communicating to its employees their high career growth path,
providing rewards and recognition for their performance, and creating an enjoyable workplace,
apart from offering satisfying compensation packages.
MSGTSC conducted a questionnaire survey to find out why employees stayed with the
organization, their reasons for leaving, and reasons for returning to the organization after having
left. The details collected were analyzed and interpreted to frame an „Employee Value
Prop osition‟
that articulated what the company offered to its employee s. According to this „Employee
Valu e
Proposition‟, working at the company met the following eight needs of Microsoft
employees:
Working with technology everyday
Caring for every employee
Working in an energizing environment
People-friendly benefits
Building careers for life
Recognizing great work
Enjoying each day
Making a difference globally
27
Sangeetha Chengappa, “Living the Experienc e Together, the M icrosoft Way,” Deccan Hera ld,
December
20, 2006.
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Microsoft India’s HR Practices
28
Sangeetha Chengappa, “Living the Experienc e Together, the M icrosoft Way,” Deccan Hera ld,
December
20, 2006.
29
Sangeetha Chengap pa , “Living the Experienc e Together, the M icrosoft Way,” Deccan Hera ld,
December
20, 2006.
30
www.microsoft.com
31
Sangeetha Chengappa, “Living the Experience Together, the M icrosoft Way,” Deccan Hera ld,
December
20, 2006.
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Microsoft India’s HR Practices
Women‟s
Empowerment
Microsoft India conducted special recruitment drives exclusively for women32in line with the
overall IT industry‟s aim of raising the female-male ratio in the workforce. The Microsoft
One- India Wome n‟s Conference was held annually for all the women employees of Microsoft
India to provide them a platform to share their experiences in overcoming
33
the hurdles in their
career growth path and in establishing a suitable work-life balance. Men were also
encouraged to
participate in this conference to increase awareness of these issues. The parent company
(Microsoft Corporation) had been in 34the list of „100 Best Companies for Working 35
Women‟ by Working Mother Magazine for six times in a row by the end of the year 2008.
Work-Life Balance
In 2007, Micro soft In dia la u n ched a progra m calle d „Brin g Yo u r Child To Work‟ in a move
to improve work-life balance among its employees. This program was initiated as a family-
friendly HR policy and it helped the families of employees to see for themselves a typical working
day of a
Microsoft employee. More than 500 children of the Microsoft employees across various locations
in the country participated in the program. Commenting on this initiative, Joji Gill said, “Th e
other p art o f th e motivatio n stems fro m th e fact tha t children, a s the harbingers a n d u sers
of tomorrow‟s technology, have always been important to Microsoft. This introduction is an
opportunity to introduce
36
them to the excitement of technology and the innovative work that
Microsoft is doing.”
HR METRICS FOLLOWED BY MICROSOFT INDIA
In Microsoft India, metrics were developed to track and define the effectiveness of the HR
function. Microsoft India HR policies aimed to maximize the value of human capital in achieving
business growth by focusing on talent acquisition and development, management development,
leadership development, and management of evolution of the Microsoft culture.
Microsoft India attempted to ensure positive returns on investments in HR by facilitating the
development of the employees and their career growth in addition to providing a congenial
organization culture. To assess the return on investment (ROI) from various HR initiatives,
Microsoft India tracked the performance of its HR practices and compared them against the
investments made.
Microsoft India evolved two important metrics that reflected its organizational readiness and talent
management. One was the Succession Planning Indicator (SPI) and the other was Succession
Planning Usage (SPU). SPI indicated the people who were ready to take lead roles and those who
were one step away from taking the lead roles. This indicator clearly reflected the organizational
preparedness to run the business without interruptions. SPU was used to assess the worth of the
previo u s ye ar‟s s uccession pla n s at th e same time to fin d out the orga nization‟s
efficacy in utilizing such plans while filling up the vacant lead roles. SPU indicated the
percentage of
leadership positions filled with those on the list of succession plans.
32
Sreekala, “IT's Advantage Women as H iring Tide Turns,” ht tp://e ocnomictime s.indiatime s .com,
August
6, 2008.
33
www.microsoft.com
34
W orking Mother‟s Magazine publishe s information for mothers pursuing ca ree rs to ma intain
work-life balance. It also publishes annually a list of companies that provide best amenities for
the working mothers. It is published from New York. Source: www.workingmother.com(Accessed on
May 21,2009)
35
www.microsoft.com
36
“Children‟s Day Out at Microsoft India,” http:// epaper.timesofindia.com, May 19, 2 007
7
Microsoft India’s HR Practices
CONCLUSION
Though Microsoft India‟s HR practices re ceived accolades from many quarters, the
„Bes t Employe r S u rve y 2 0 0 8 ‟rele a sed b y Dataquest said that overall employee satisfaction at
Microsoft India was below the industry average in India. Except for its compensation packages
where it was
above the industry average, in most of the parameters regarding employee satisfaction, it scored
37
www.microsoft.com
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Microsoft India’s HR Practices
less than the industry average (Refer to Exhibit IV for employee satisfaction ratings at
Microsoft India on various parameters). Keeping in mind the difficult economic environment
due to the global economic slowdown and the scope for improvement on various parameters of
employee satisfaction, was there a need for Microsoft India to re-align its strategic HR practices?
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Microsoft India’s HR Practices
Exhibit I
Micro s oft‟s Mission and Value
System
To achieve the company‟s mission of “To enable people and businesses throughout the
world to realize their full potential,” Micro soft sough t „gre a t p eople wh o are bright,
cre ative , an d energetic‟ a n dex p ected th e mto abid e b y th e followin g valu e system.
Integrity and honesty
Passion for customers, partners, and technology
Open and respectful with others and dedicated to making them better
Willingness to take on big challenges and see them through
Self critical, questioning and committed to personal excellence and self improvement
Accountable for commitments, results, and quality to customers, shareholders, partners and
employees.
Source: www.microsoft.com
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Microsoft India’s HR Practices
Exhibit II
Microsoft India‟s Busines s
Units
Business Unit Operating Description Head of the Unit
Area (as of June 2009)
Microsoft India Products One of the main divisions Srini Koppolu
Development Development contributing to Microsoft
VP & MD
(MSIDC) Center, global product development
Hyderabad and in producing future
innovative products.
Microsoft Global Enterprise Offered solutions for the Amit Sircar
Services India solutions enterprises worldwide based
General Manager
(MGSI), Hyderabad on Microsoft technologies and
products
38
MSN is an online services portal from Microsoft Corporation which provided users with e-mail
facilities, desired access to the news covering various topics and links to popular websites of different
categories. Source: http://in.msn.com(Accessed on May 26,2009)
11
Microsoft India’s HR Practices
Exhibit III
Microsoft India‟s Mission and Strategic
Initiatives
“As India moves towards a leadership position in the global knowledge economy, Microsoft
continues to work in close partnership with all stakeholders, including the government at the
state and national level, the Indian IT industry and academia, to ensure that technology is
leveraged as a catalyst for enabling more and more individuals and communities to realize their
full potential.
Th e followin g thre e strategic initiatives define Micro soft‟s mission of „Realizing
India‟s
Potential‟
today:
Creating a Digitally Inclusive Society
Creating a digitally inclusive society implies a thrust on long-term investments for taking the
benefits of IT to the grass root and reaching out to communities in rural and semi-urban India
which are marginalized and are on the wrong side of the 'Digital Divide'. Accelerating IT
literacy, creating locally relevant content in Indian languages and ensuring affordable access to
technology are the key levers for achieving this mission.
The Local Software Economy
Microsoft works with its partners and developers in creating a vibrant local software economy.
Significant investments in skills transfer and joint go-to-market initiatives are planned with
partners to enable them to tap domestic and global opportunities while delivering increased
business value to customers. The Indian ISV community is encouraged to realize the
opportunities in the software products space, and Microsoft empowers over 650,000 developers
in India with tools, technologies and training required to develop high-end skills and compete in
a global marketplace.
Innovating from, for and with India
Innovation at Microsoft focuses on innovating from India, innovating for India and innovating
with India. These three aspects involve setting up facilities for Indian IT professionals to create
an impact at a global level without leaving home; developing innovative products to overcome
the language barrier and to increase the accessibility and appeal of the PC and creating a robust
IT economy that's geared to enable India retain its leadership in the knowledge
economy.”
Source: www.microsoft.com/india
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Microsoft India’s HR Practices
Exhibit IV
Microsoft India‟s Employees Satisfaction (as of
September 2008)
against Industry Average
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Microsoft India’s HR Practices
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Microsoft India’s HR Practices
44. http://members.microsoft.com/careers/careerpath/humanresource/default.mspx.
45. http://members.microsoft.com/careers/mslife/whoweare/mission.mspx.
46. http://thesource.ofallevil.com/india/msidc/life/community.aspx.
47. www.cybermedia.co.in/press/pressrelease100.html.
48. www.directionsonmicrosoft.com/sample/DOMIS/orgchart/sample/orgchart.html.
49. www.eandwgroup.com/newsroom_readmore.html.
50. www.infosys.com.
51. www.microsoft.com/india/gtsc/about_us.mspx.
52. www.microsoft.com/about/diversity/programs/awards.mspx.
53. www.microsoft.com/India/MSIDC/life/workculture.aspx.
54. www.microsoft.com/India/MSIDC/default.aspx.
55. www.microsoft.com/India/MSIDC/newsroom.aspx.
56. www.microsoft.com/india/msidc/life/campus.aspx.
57. www.microsoft.com/india/msindia/ourmission.aspx.
58. www.microsoft.com/india/msindia/oneindia.aspx.
59. www.mindtree.com/newsandevents/february04_2004.html.
60. www.microsoft.com/msft/reports/ar08/10k_fh_fin.html.
61. www.mindtree.com.
62. www.nasdaq.com/reference/customerror.stm?aspxerrorpath=/aspx/company-news-
story.aspx.
63. www.sec.gov/Archives/edgar/data/789019/000119312508162768/d10k.htm.
64. www.surfgold.com/accor_services/july08/view_from_top_accor.html.
65. www.wipro.com.
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