Compensation at Microsoft
Autor: poppyg55 • January 25, 2018 • Case Study • 1,286 Words (6 Pages) • 594 Views
CutliffG_M1_A3.doc
Compensation at Microsoft
January 18, 2017
Argosy University
Compensation at Microsoft
Companies need talent (workers) to create functionality of job duties and make the work process a success. Employees need jobs, supplied by companies, to earn wages for daily survival needs. A successful relationship between companies and employees requires the proper balance of work performed by the staff and compensation supplied by the organization. Organizations that wish to remain successful most take five key factors into consideration, if they want to necessitate such a balance. A solid compensation strategy must support a correlation between staff and the objectives, alignment, competitiveness, employee considerations, and management of the organization.
The proper focus for any successful organization involves the optimal alignment of the company’s corporate strategy and the compensation strategy for its employees. Failing to get the balance right leaves any company at risk of imploding as a result of improper planning and oversight. The corporate leadership at Enron valued personal profit over the importance of employee compensation and thus, destroyed the company, along with altering the careers of many employees. That disaster proved the importance of integrity in a company’s management strategy and the need for a balance in corporate and compensation strategies. Microsoft is no different from any other organization as it relates to the importance of correctly aligning the company’s corporate and compensation strategies for maximum effectiveness. Ignoring this important factor puts any company at risk of failure due to overpaying employees as compared to the market rate, underpaying them (leading to high turnover rates) failing to emphasize the importance of employee commitment as it relates to the strategic balance, or going out of business resulting from any combination of these risks. A solid compensation strategy must address five key factors. The following table presents Microsoft’s strategy on these factors.
Microsoft’s Compensation Strategy
Five Factors | Define for Microsoft |
Objectives: The objective of Microsoft is to move the world forward through technology empowering every person and organization to achieve more. | The company utilizes pay and benefit incentives to attract and retain top quality employees (Rettenmyer,2013). |
Alignment: The proper corporate /compensation strategy balance is necessary for sustained success. | Microsoft has made efforts to align its employee compensation benefits with the objectives of the corporation (Rettenmyer,213). |
Competitiveness: The company strives to remain ahead of the competitors in innovation and creativity. | Microsoft implemented the pyramid group approach to better identify and protect talent (Rettenmyer,2013). |
Employee Considerations: Microsoft has learned from past programs that employee retention is closely related to compensation and benefits. | Microsoft implemented talent awards. The program identified talent, evaluated reward options, tracked employee demographics, and measured the program’s success (Rettenmyer, 2013). |
Management: The role of management has been analyzed as it relates to the functioning of the organization’s processes. | Microsoft Adheres to four principles to facilitate growth and development; identify talent, evaluate reward options, track demographics, and measure outcomes (Rettenmyer, 2013). |
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