I enjoyed this comment in the last post so much I wanted to repeat it here:
First, to be perfectly fair, you should add the promo budget to the merit budget to get the real average raise across the company. Though honestly, HR is doing some creative math since they say 1.7% + 2.0% = 4.9%. And even 4.9% is thin stuff. Oh, yeah, it’s a lot better than some folks have gotten over the last few years, but the thing is, MSFT needs the best people it can find in order to compete. The software market is very, very lucrative, and that attracts competitors. MSFT with average employees is a sitting duck waiting to be taken down.
And the company is crossed up and going the wrong direction with the compensation package. Salaries at MSFT are better than average, but not outstanding (and this is by design – the company targets the 67th percentile, meaning roughly a third of software companies will pay better salaries). So, all else being equal, the company will get employees that are better than average, but not outstanding. That means companies that can attract outstanding employees will eventually eat Microsoft’s lunch. Unless the company can find some other advantages in hiring.
Well, MSFT does have two things going for it there. Great benefits and financial security. Now, what sort of employee is going to value great benefits and financial security? A guy with a wife and a couple of kids. So, with better-than-average salary, great benefits, and financial security, MSFT could attract outstanding married employees with kids. But a guy with a wife and kids wants to go home while it’s still light out, and wants to spend weekends with his family. This guy also maybe is more interested in a good steady job than in grubbing his way up the corporate ladder. He’ll do good work and contribute to a solid product, but isn’t interested in working 80 hour weeks to get a 4.0 and a promo.
But the company clearly isn’t interested in that sort of employee. We want aggressive, ambitious people who will bust their butts to stand out and get ahead. People who will take risks to grab the brass ring.
Only, we aren’t attractive to those people any longer. Not the best ones anyway. The guy willing to take a flyer to make it big isn’t impressed with financial security – he’s a risk taker. He wants salary and stock options, and we don’t pay enough for the best ones any longer.
So, there’s a mismatch between what the company is willing to offer and what it expects in return. The end result is that we’ll drive away the outstanding people who would be willing to work for 80% of the salary they could make somewhere else in exchange for great health coverage for the family and the stability to stay in the same place long enough to put the kids through high school. And we’ll replace them with the second-best of the young-and-hungry kids, because we’re paying second-best salaries and not offering stock options any longer.
It’s just plain stupid. We’re not using our competitive advantages and instead playing a game that belongs to other companies now.
For some reason, pasting this in made me think of an old-time Microsoftie I used to work with who kept a balanced, fun life and managed to be incredibly productive and effective at work. I wish Microsoft would study his work day to better understand how all of us can get great things done with the lightest of touch. Even when he scaled up to be a super GM, he was having "this attached routine would give you better results" or "from this profile, this code path could be massively sped up" moments that made the rest of us wonder how in the world he managed to do that. He continued to mentor us at key points and have tremendous impact on the product, bits up. He's quite an inspiration... like Mel.
It would be much better for all of us currently working for Microsoft to be super efficient like that with our collective wisdom versus trying to hire every hot batch of newly graduated potential, desperately hoping that the new shiny cog will work better than that old, mediocre cog who just keeps hanging around the group and (dang!) just won't move on no matter how few 0% raises we give 'em.
Anyway, lots of comments around the previous posting. Unfortunately, lots of those were comment spam that I haven't cleaned up yet. And a few were debating about racism / favoritism at Microsoft. From my experience, Microsoft is an exceptionally fair place where people are making decisions around money. When you're trying to make a profit, you're trying to assemble the best contributors there are. Period. Capitalism can make you color blind to everything except for the crisp green Benjamins.
Now Malcolm Gladwell might say we are still inclined to choose based on unconscious bias (like how my building oddly seems to only hire from Ivy League schools). But I personally haven't seen racial bias. In fact, rather than favoritism amongst similar groups, the only time I've had concern of discrimination was between folks of the same group holding their reports to an extremely high standard and perhaps being more lax towards the rest of us who sort of stumbled through a hazy, beer-infused American education.
So whatever bias we may or may not have is just a fleeting shadow to what I've been exposed to living and working elsewhere in the country. At Microsoft, flipping the Bozo Bit is much more prevalent, and I rarely ever see that unflipped. That flip usually manifests itself with your first 3.0 review rating, and if you get a second 3.0, you might as well realize that the bit has been really flipped and unless you're going to unflip it yourself, you should either move to another group or be like the rest of the cool kids and get the heck out of Microsoft.