Contemporary Issues: HR Periodicals

Contemporary Issues: HR Periodicals


     I need at least a 150-word comment on my classmate’s discussion

Integrating Performance Management and Rewards at Microsoft

Robert posted 

Hello class,

I researched an article about Microsoft’s way of developing and rewarding its employees. In this article they explained how they used different approaches throughout the years in efforts to gain greater progress and better work quality. It was explained that before the year 2000, the company relied heavily on stocks to give to their employees as part of a package with their pay. After their stock market started to increase dramatically, they decided to switch over to increasing everyone’s pay by 15% every year. In 2006, they switched to giving their employees bonuses and merit pay along with RSU’s. This didn’t work so well for them because it became too confusing for the company to go through with. Finally, they decided in 2011 to make their reward system based off of performance reviews. While using this performance review system, every single employee would receive a rating between a 1 and a 5. Receiving a 1 was the highest and a 5 was the lowest. Paying their employees this way motivated employees to become greater assets to the company and increased productivity. Receiving a 1 would give them the biggest number of merit pay, a larger bonus, and more stock units. All of the ratings were based off of the employee’s goals and commitments during the past year. They were also graded off of their behavior they had while achieving those results given from managers and peers. Finally, their long-term performance record was also taken into consideration for the ratings. This way of rating the employees was proven to be very effective and seems like a really good and fair way to pay employees. It is simple to understand why this idea was put into place.

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