Microsoft exec puts her stamp on human resources

In Microsoft's hypercompetitive culture, employee evaluations are a fact of life.

For the past 15 years, a ranking system forced managers to limit the number of top scores and associated bonuses to their staff, even if everyone pulled an equal share of the weight.

Someone had to get the shaft. The forced curve was company policy. And it climbed up a list of employee gripes that grew as Microsoft's stock, which accounts for much of the company's compensation, languished.

In May, after barely a year as Microsoft's human-resources chief, Lisa Brummel swept away "artifacts of the past," starting with the widely disliked forced curve.

She announced myMicrosoft, a broad program including resources for career development, management training and new perks. Now in her 18th year with the company, Brummel calls it the biggest human-resources policy change ever introduced.

These course corrections come as Microsoft faces perhaps its stiffest competition for talent, often referred to as the raw material of the technology industry.

myMicrosoft v. 1.0

Big changes Microsoft employees recently learned how they fared under a new evaluation and compensation system introduced in May. The new myMicrosoft employee program also includes new perks. The company is reviewing version 1.0 of the program and plans to continually tweak it. Here are some other elements of the program:

Management training More manager accountability and opportunities to improve skills.

Career development A clearer path to the next promotion to help employees plan their careers at the company.

On-campus services At the Redmond corporate headquarters, employees have access to laundry and dry-cleaning, grocery delivery and convenience stores. More food options were added to company cafeterias. Free towel service in employee locker rooms was also restored.

Discounts Microsoft arranged for employees to get discounts on services such as housekeeping, yard and pet care and auto repair.

Source: Microsoft

Recruiters say talented programmers have virtually unlimited choices — from industry stalwarts to the companies that have thrived past the dot-com bust — Google and Yahoo! foremost among them — and a new crop of well-funded Web 2.0 startups.

And Microsoft is as hungry for workers as it has been at any time since the peak of the tech bubble in 2000 and 2001. Its global work force ballooned by 16.7 percent to 71,172 in fiscal 2006, which ended June 30. While Brummel doesn't expect that blistering pace to be matched this year, she said the company's growth plans are unchanged.

Keeping employees happy and recruiting new workers are critically important to Microsoft's success. And Brummel is just getting started.

"With our employee base — the way it grows, the type of people we want to bring in here, the way our whole system works — we have to keep evolving it," she said.

So far, the rank and file appear to have welcomed Brummel's initial efforts. And while top Microsoft executives typically don't comment on individual performances, the company's leadership appears to be pleased with her. She has the green light to continue expanding the program.

Under the new system, evaluations were completed last month and employees from Redmond and Fargo, N. D., to Bangalore, India, and Cambridge, England, learned how they had fared in the past cycle, when bonuses and raises hit their bank accounts Sept. 15.

Employees are now supposed to be judged against specific, measurable performance goals instead of against their peers. They're also evaluated on potential long-term contributions to the company (although these rankings are still given on a mandated curve). In theory, managers can distribute bonuses and stock to reward employees as they see fit.

Brummel said Microsoft put more money into compensation — she wouldn't say how much — and expects the top performers to see rewards "above and beyond" what they got in the past.

Global work force

Reactions have run the gamut, and it's difficult to characterize the experience of employees across the world.

The author of Mini-Microsoft, the widely followed, anonymous blog where employees railed against the forced curve, wrote: "I think for most Microsofties, the rewards ended up being very similar to last year. A few folks on each team might still be trying to pop their eyes back into their sockets. I'm pleased."

Other Microsoft employees expressed ambivalence and noted that there's still confusion on how it works. Many are withholding judgment until at least the next go-around.

More important to morale, some said, is the stock's recent rally — it has now recovered all of this year's losses — and optimism over imminent high-profile product launches, including the Zune digital media player next month and the Windows Vista operating system, scheduled for a broad rollout in January.

Brummel said she's received universally positive feedback from managers on the new system and employees have been "generally positive," but are wondering what their reviews mean for their careers.

"And in fact, we don't know, because everything will build on what we did this year" and in subsequent years, she said.

Brummel, 46, grew up in Westport, Conn., received a degree in sociology from Yale and started her career selling college textbooks. She was recruited by Microsoft while finishing an MBA at University of California at Los Angeles.

She spent 16 years in a variety of management roles throughout Microsoft's product groups before reluctantly accepting the top human-resources post. During an evening meeting in her office, she said "no" three times before Chief Executive Steve Ballmer persuaded her to assume responsibility for keeping a global work force happy and aligned with company goals.

Human-resources experts say employee review and compensation systems are among the most important tools to communicate goals to workers.

"The performance-management system tells you what it is in this company that we value and reward," said Herman Aguinis, a professor of management at the University of Colorado at Denver Business School, and author of a recent book on the topic. "If you're changing the things that you value and reward, people are going to change their behaviors accordingly, so it is a very powerful tool to change a company's culture."

Addressing issues

Brummel said there's much more to an employee's experience at the company, and myMicrosoft seeks to address a spectrum of issues.

She has been deliberate in her efforts to learn more about employee concerns.

Brummel, who walks the same halls as Microsoft's topmost executives, embarked on a "listening tour" shortly after she got the job. Once a week, usually in the morning, Brummel would find a conference room big enough for at least 100 people and invite everyone from adjacent buildings to come talk with her directly.

Brummel is modifying that effort as she gathers feedback on myMicrosoft and prepares a new set of changes to roll out with version 2.0 of the policy. Later this month, she plans to begin an internal blog, InsideMS, where employees can raise issues — anonymously if they choose — and she can contribute to the discussion when appropriate.

She sees this as a more favorable venue to air company complaints than external blogs such as Mini-Microsoft, which she reads but does not participate in. "One of the reasons why I don't participate in any of the external blogs is you have no idea whether it's a Microsoft employee posting, or somebody else posting just to ... provoke a discussion," she said.

She also implored employees during the company meeting last month to "be responsible" with what they write, especially regarding Microsoft's intellectual property.

New initiatives

Another new initiative addresses an awkward internal-transfer process that discouraged people from exploring their options. In the past, an employee needed a manager's permission to move to another team. Now, managers are notified, but can't block a move. Brummel said the new system shortens the internal interviewing process and "allows people to move more freely."

This is another change employees have long asked for.

Looking further ahead, Brummel said the company will revamp the way managers are evaluated by their staff. Now employees can give feedback on their direct manager, but not on people further up the ladder. That's probably the biggest change on tap for myMicrosoft 2.0, she said.

It's hard to gauge what impact any of this will have on recruiting and retention. Brummel knows of at least one example of a college recruit taking note of the changes. She's more optimistic about myMicrosoft's impact on recruiting in the coming months as employees get comfortable with the changes and attest to their experience under the new system.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

Seattle Times researcher David Turim contributed to this report.