Employee Motivation and Retention Strategies at Microsoft Corporation

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : HROB129 For delivery in electronic format: Rs. 300;
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Motivation / Employee Retention
Case Length : 15 pages
Period : 1995-2009
Pub Date : 2010
Teaching Note : Not Available
Organization : Microsoft Corporation
Industry : IT
Countries : US


The case examines the employee motivation and retention strategies of the US based Microsoft Corporation (Microsoft). Since its inception, Microsoft was appreciated for its employee-friendly HR practices. However, during the late 1990s, as the company was growing rapidly in size, it lost the popular elements of its work culture. Moreover, several racial discrimination lawsuits and antitrust proceedings affected the company's corporate image and financial performance adversely. In the early 2000s, in order to improve its profit margins, Microsoft started cutting several employee benefits, which demotivated its employees. To boost the employee morale, in 2006, Steve Ballmer, the then CEO of Microsoft, appointed Lisa Brummel as the Senior Vice-president of HR.

After taking charge, Brummel announced a plan to significantly revamp some of the existing HR management practices at the company. She announced a plan named 'myMicrosoft,' which included developing appropriate systems to enhance communication between the employees and the HR department, making changes in the company's performance review system, introducing several new employee benefits, and designing new workplaces in an effort to attract and retain employees. The case analyzes in detail the HR initiatives taken by Brummel. It ends with a discussion on the benefits realized from the initiatives implemented by her.


Study the corporate culture and HR practices at Microsoft.

Analyze the problems faced by Microsoft on HR front during the late 1990s and early 2000s.

Evaluate the measures taken by Brummel to motivate employees.

Discuss the benefits of the strategies implemented by Brummel.

Appreciate the importance of recruiting the right people for a particular job.


  Page No.
Introduction 1
About Microsoft 2
The Problems 4
The Measures Taken 7
The Benefits Reaped 11
Exhibits 13

Key Words:

Microsoft Corporation, Employee Value Proposition, myMicrosoft Program, Work Culture, Performance Review System, Racial Discrimination, Class Action Lawsuit, Antitrust Trial, Stock Option Program, Employee Benefits, One Microsoft Way, Employee Communication, Career Development, Management Training, Compensation System, Forced Curve System, Commitment Rating, Workplace Advantage Strategy, Workplace Design Lab

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