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Introduction

Organizations can be simply defined as two or more people working co-operatively to


achieve a common goal or set of goals. In this definition we can highlight four essential
elements that need to be existed to become an organization, those are people, location,
activity and co-operation. Based on that above facts we can redefined the meaning of
organization as social systems of co-operation that have been designed to develop
individual effort aimed at goal achievement (Fox. W, 2006). This design of an
organization is a means to accomplishing the organization's overall goal and the
structure is not an end in itself. In systems theory terms, the design ensures that the
appropriate inputs go through the necessary processes to produce the required outputs
to produce the intended outcomes. During the process human involvement is very
important in terms of managing the resources available in the organization. HR function
involved management of all the people in the organization towards achieving
organizational goals. Therefore we can define human resource management as part of
management that specializes in the management of people in work organisations
(Bratton & Gold 1999). As defined by Torrington, Hall & Taylor human resource
management concerned with meeting four distinct sets of organizational objectives:
staffing, performance, change management and administration.

Introduction of the case company


Microsoft Corporation is the giant in the software development industry in the world,
develops, manufactures, licenses, and supports a wide range of products and services
predominantly related to computing. Headquarters are located in USA. Bill gates and
Paul Allen are the core founders of Microsoft Corporation. The company has five
business unites to serve their customer based in all around the world. At Microsoft, the
mission and values are to help people and businesses throughout the world realize their
full potential. The main reason of selecting the Microsoft as the case company for this
report is because capabilities, skills, knowledge etc of human resource of the company
decides how effectively company achieve its objectives. Therefore from the company's
viewpoint strong human resource function is essential for the company's success.

This report has been addressed the human resource practices of Microsoft Corporation.
There are no universal set practices that every organization follows in their human
resource management function. Instead each and every organization has tailored their
best-fit model for HRM function in the organization.

Necessity for alignment between


organizational corporate strategy and
objectives with HR strategy
Current business environmental forces such as competition, innovation, globalization,
technological advancement etc has created major impact on organizational behaviour.
These changes come in different forms. Sometimes it required to reorganize the structure
of the organization and due to this organization may have to introduce new roles and
new people. Sometimes it may require changing the culture of the organization. In all
these situations HRM function plays a major role. Further recent development of new
concepts such as knowledge workers has increased the complexity of HRM function.
Nowadays HR has become strategic assets for organizations. From Microsoft's view
point intellectual property that is knowledge of the software developers is crucial for their
business than the physical asset of the company. This importance has heightened due to
the transition of old economic conditions to knowledge-based economy where it
considers the intellectual property as one of key success factors of the organization. The
impact of globalization and the technological advancements were the main contributing
factors towards the above transformation.

As a result of the above transformation in the business environment strategic importance


of the human resource function has increased in the current business environment.
Therefore HRM function can be interpreted as strategic human resource management as
well which is known as general approach to the strategic management of human
resources in accordance with the intentions of the organization on the future direction
where it wants to take. In other words human resources strategies need to be aligned to
the corporate strategy of the particular organization. Strategic HRM has evolved based
on human resource management principles incorporating the concept of strategy. So if
HRM is a coherent approach to the management of people, then the strategic HRM now
provide an idea that is done on a planned way that integrates organizational objectives
with policies and action sequences. Corporate strategy of the organization is established
based on the mission of the organization and later it has been cascade down in to lower
level strategies such as business strategies and functional strategies. Therefore
effectiveness of achieving the ultimate corporate strategy is depends on how successful
in achieving the business and functional strategies of the organization. Therefore one of
the driving factors behind the above achievement is the quality of the human capital
within the organization. Therefore objective of human resources strategy should be
based on company's objectives and it competent enough to achieve them.

Microsoft's success in aligning corporate


strategy and human resources strategy
Resource based view of strategy explains when developing competitive strategy firm
primarily in the application of the bundle of valuable resources at the firm. In other words
it is an inside - out approach to develop a successful strategy to achieve the competitive
advantage. As per the VRIO model of resource-based view explains valuable, rare, less
imitable and organization embedded resource help to develop a successful strategy for
the company. In the majority of organizations people factor are now the biggest asset
and when it comes to Microsoft they have differentiated themselves from the other
players through following effective HRM strategies in the company. Because of this
reason Microsoft always tend to recruit the best people in the market to introduce the
best product to the software market. Microsoft's mission is to help people and business
throughout in the world to realize their full potential. Their corporate strategy is to develop
software to bring these objectives realistic. Therefore people factor of the organization
plays the biggest input for that strategy. The knowledge, skills and abilities have helped
them to differentiate themselves from the rivals to create value. Therefore HRM function
does a major contribution in strategy development. As a result we can say that alignment
between corporate strategy and human resource strategy is crucial in achieving
organizational objectives.

The company believes that its five business divisions of windows and windows live
division, server and tools, online service division, Microsoft business division and
entertainment and device division offer the greatest potential to satisfy their customers.
Therefore the company's corporate strategy is decided based on the mission and values
of the company and their business strategies have been cascaded down through the five
businesses unites mentioned above. Therefore when deciding human resource
strategies such as recruiting and selection, motivation, retention, training and
development etc. they are always consider what the company's expectations in delivering
the service to the customer. As an example they invest enormous amount of money on
training and development because they expect their employees are constantly update
with the business environment which is ultimately help the company to update and
improve their product with the changes in the technologies. Further detailed analysis of
the human resource functions will be addressed in this report later section. Therefore, we
can say that the company maintains a strong link between corporate strategy and the
human resource strategies in their operation.

Changes that the organisation would


need to make to its HRM if confront by
mergers, acquisitions, strategic alliances
or joint ventures.
Microsoft's biggest value is derived from its software developer's function and all other
functions are linked to add further value to the above. As per the porters value chain
analysis that acts as their one of major primary activity in the operation. As a secondary
activity human resource function adds a major contribution to its successful. The
company's that function is currently operated in centrally. However, through a merger,
acquisitions, strategic alliances with another software development company will get an
opportunity to access to further labour resources. Especially new markets well known for
IT sector markets India, Singapore, China etc are the few opportunities available for
them. As a result of this company will be able to expand their recruitment opportunities
and will be able to select best from the world. However, HRM function should be able
relook their other function such as training and development, performance evaluation,
communication etc from the cross-cultural perspective. As an example company may
have to focus on increasing other skills such as communication and social skills even
though those people possess high technical knowledge. Further, induction process is
very important in this type of business expansion to bring new people under Microsoft
culture and mission. In case of a joint venture, all the parties need to agree on common
grounds for HR supply. Depends on the JV location the company have the access to HR
and it may be cheaper in getting them rather than employing from the mother company.
However company needs to make sure JV agreement will not have any negative impact
on the current business in the future. Because knowledge transfers between JV parties
could negatively impact each other.

Recruitment and selection strategies


Recruitment means creating pool of candidates who are suitable for the company's
requirements and selection process is where selecting the best suitable candidate for the
company's role. Selection process is generally known as a two way process where it's
critical for the candidate as well as the company, because the wrong selection decision
may negatively impact on the both parties. Therefore Microsoft maintains strong
screening process when selecting a candidate to the company to make sure they will
take the correct decision at the first time. Microsoft advertises on websites and in the
papers. Applications are made online and are screened to find the best candidates.
Interviews, tests, CV evaluation etc. are the main techniques used by the company in the
selection process. As an example when they selecting software design engineer, first
they evaluate the candidate through their CV to match with the job requirement. In the
second stage candidate will be evaluated through a telephone conversation to identify his
technical knowledge, logical thinking, background knowledge etc. After this he is being
called for face to face interview and different people from the company such as Human
resource department, technical people will be talked with the candidate and go through
various sorts of psychometric testing to gauge their aptitude and personality. This is to
evaluate their technical competency and suitability to Microsoft culture.

Further Microsoft's employee referral program plays a major role in recruitment process
and this has been conducted with their "Spreadthelove" website. This site provides
opportunity to Microsoft employees to "write up" their own individual story about their
career with Microsoft and share the web link and "spread the love" with targeted friends,
family and potential referrals. Further to maintain the effectiveness of this program by
contacting the every referral is contacted first by an employment specialist, which then
introduces them to a recruiter? (Online, www.articlesbase.com)

These are few examples of recruitment strategies that are company maintain. Other than
that partnership with the Universities and educational institutes to recruit suitable
candidates also famous strategies that are company operated. Microsoft recruit graduate
student every year to get ensure that knowledge will be flown in to the company
continuously. This type of highly screened and long term oriented recruitment and
selection process ensure that company HR supply is in line with the requirements of the
company and ensure that will not have negative impact on the operation.

Employee retention strategies


From a company's point of view recruitment and selection process involves a
considerable amount of cost as well as it is a time consuming process in the HRM
function. Therefore company needs to ensure selected candidate will be remained with
the company for long term to convert cost incurred during the recruitment process to an
investment for the company. In 2007, Microsoft has been named as the best place to
work in. As per the company records it maintain just 5% of labour turnover. (Online,
www.articlesbase.com) This is exactly shows the company's long-term focus of
employee retention. This indicate that Microsoft maintain proper working conditions that
their employees are motivated to stay with the company.

From the day that employee joined with Microsoft attempt to cater to the needs of its
employees. They wanted to keep the atmosphere at work and also make sure that
Microsoft environment provides the sense of social belonging. For an example every
employee allowed to have their own office they were free to decorate as they please and
the provision of subsidized food and drink within the office premises. Further employee
retention purposes Microsoft follow many strategies such as share option scheme for
employees, annual employee recognition etc. Company believes giving an equity
participation and sense ownership of the company will help to increase employees'
loyalty and commitment in the long run. As per the Maslow's of hierarchy of needs people
will climb their stages of their needs once they satisfy with the basic needs. This has
been clearly identified by the Microsoft and strategically they tend to satisfy the esteem
level needs of their employees to motivate and retain them in the future.

Training and development strategies


Training and development provides rooms for growth of the employees. The nature of the
business the company involved in, knowledge and skills of their employees play a major
role. Therefore Microsoft is not reluctant to invest enormous amount of money on
employee training and development. Because of this reason an employee career at
Microsoft more than just a job and it has become a path to increase skills, knowledge,
capabilities etc. Further company provides opportunity to employees to apply for between
companies where it assists them to learn about new societies, economies, cultures and
increase their experience within global company. Training programs at Microsoft is
conducted as a three-way partnership between employees, managers and the company.
As per their strategy employee must drive their career development plan, manager
assists and coaches them and as a company always ensure that sufficient resources are
available to operate the plan. Few of examples for career training programs are technical
education seminars, management and professional development courses, the IT learning
site, and Microsoft Training and Certification programs. Further the company reimburses
employees for their tuition, membership, textbook fees for work related exams.

Purpose and benefits of performance


appraisal and reward management,
including financial and non financial
rewards
In this mechanism performance evaluation of each and every employee will be also
important for both parties. From company's point of view it gives them the opportunity to
identify knowledge level of the company and based on that they can identify what the
ways are of fulfil if there is a shortfall between supply and demand. For employee, this
will indirectly act as a motivation for them to increase their knowledge and skills based on
the feedback. Therefore for employees' motivation clear communication between
appraiser and employees and critical if this is to be successful and need to communicate
appraisal procedures and guidelines at the beginning of the process. Further building a
fair, unbiased and transparent reward system is essential to increase motivational level of
the employees. Rewards could be in the form of financial or non-financial. Financial
benefits can be considered as salary increment, financial allowances, performance
related bonus etc. Sometimes only financial benefits may not be motivated the employee
but non-existence could lead them to de-motivate. In other words these type factors
could act as hygiene factors in motivation theory. Non financial factors would be
participation to share option schemes, promotions, training & development etc. depends
on the social and economic environment of the employees live in will create the
importance whether financial or non financial rewards are more important. Proper planed
performance evaluation process and reward system will increase the employees'
commitment, ensure long term retention, motivational level etc which are ultimately
reflected through the company's performance.

Conclusion
At Microsoft HR functions including recruitment & selection, training & development,
performance evaluation, reward management etc are taken very seriously because they
want the best people to work for them and their long-term retention within the company is
crucial for their success. Because of this reason they hire people not just for their current
skills but for their future potential as well. Microsoft tries to ensure it always gets the best
people. It works with schools and universities so it hears about the talent out there and it
ensure that their labour demand is fulfilled. As per the current business context where
knowledge workers dominate in the business success, managing the knowledge within
the company and effective knowledge transfers are so important for the business to
maintain their competitive position. Further current relationship between employees and
the company is stick to a psychological contract. This is more important for companies
like Microsoft where employees' capabilities, skills and knowledge decide the company's
direction in the market. Therefore HR function strategies' plays a major contribution in
achieving its objectives.