Limited Round-Up, New Souls, and Old Problems
It's a holiday season copy-and-paste special!
Going back to the issues over Limited Scenario II, a couple of folks wrote in describing why it is the way it is and that it's a good thing. First: my main issue is with calling a good, solid person on your team "limited." L-i-m-i-t-e-d. I do hope you got that. Slapping a "II" on it doesn't make it better. And if you're okay with that designation, do you go and give them a head-nooggie right after reviewing their numbers? E.g., does repeating this - perhaps in an increasingly louder voice - make things better:
Limited II: "Consistent performer who has met expectations".
?
Seriously, though: I'd like to see what you think the text of such a message is like, as if you were delivering it to someone you was important to the team, solid, but not expected to advance to the next level and therefore Limited II. How do you deliver such a firm message that doesn't grind their motivation and morale under your heel?
The ever reliable Alyosha` has an interesting insight:
[...] But this sort of nonsense wouldn't happen were it not for Microsoft's corporate philosophy of differentiated rewards.
Differentiation creates winners and losers. And because it's nigh impossible to distinguish performance from potential, capability from visibility, and perceived performance from real performance -- some of those "losers" ought to have been winners, and some of the "winners" ought to have been losers.
You insist on differentiation, you get exactly this sort of crap.
You get rid of differentiation, you get a totally different set of crap. Some people start coasting, other people get offended because they consider themselves a unique special snowflake that deserves much more compensation than their base pay.
But you know what? Most people just take their COLA and keep chugging on. In the end, I'd be willing to bet that non-differentiation is the lesser of the two evils.
Alyosha`'s comment does make me wonder: what if we had unbalanced differentiated rewards: keep the high-end and drop the low-end? Continue to reward the super-contributors and people who obviously committed a lot of time and effort to get excellent results far beyond their peers. But drop the hunt for finding the Kims of the workforce. More time goes into protecting people who are solid contributors but at risk of getting zero or mediocre rewards. Why? Because we have a statistical need, it seems, to ensure somebody gets zilch. Because surely there are a batch of people in your team deserving of zilch. Don't make us statistically decide that people deserve the zilch. But reward groups who move on the obvious zilchie deadwood, Microsoft-mismatches, and low-contributors through-out the year. Otherwise, we'll continue keeping them around to ensure the bottom is properly zilch-padded.
Regarding Limited II, one commenter wonders if it's basically process-based age-discrimination :
Not only is it bad management, it's also ILLEGAL! It's a violation of both state and federal law to have management policies that favor younger workers over older ones. This is age discrimination, plain and simple. The higher level you are at, the more difficult it is to earn a level increase.
Notes From the Field has a great comment that starts off as follows (I urge you to read the whole comment - it's great and gives insight into what customers are responding to):
No, *I* am Kim.
Several people I've worked with for a number of years are Kim too. If I were to start my own business tomorrow, these are the people I would want to take with me to Kims Inc. These are the people that close deals and make customers and partners happy. These are the people that have instant credibility and know how to take control of a situation. These are the people that know their stuff, but don't need extra wide doors for their egos. Sure I would want some of the rising stars, but the majority of my company would be the strong performers with business maturity - the Kims.
If your in a dark mood reflecting over being a corporate cog, this is the comment for you. The teaser:
I'm probably missing a few other important notes here, but having said that, here's some guaranteed ways for you to get ahead at MSFT, if you have the balls to swing it [...]
In the midst of all of this, the Intel Perspective anonymous blog has a couple of posts up regarding their Intel Focal review process:
One thing that's interesting: Intel employees get what seems like a 360 review by recommending peers and stakeholders to their manager to get feedback on the employee's performance. An even worse political drama than what we have? Maybe. But I think team work might have to be elevated to some degree in order to get positive feedback (even if you both wash each others' hands, there might be some good for the company and customer as a side-product). I would at least like a system for year-around non-anonymous feedback open to anyone.
And, as always, I have to highlight any comment that is summed up as: let your resume set you free:
It should be obvious to anyone reading the internal blog and observing the changes over the last year that there is unfairness in our compensation system but nobody is going to do anything about it - if only because there is no fair system to correct the status quo.
If you have issues, don't whine, go jobhunting and post your success stories instead.
Elsewhere in the land of the letter J...
Jay and J: Jay Greene at Business Week has an edgy thinker J Allard focused cover story piece: The Soul Of A New Microsoft (strangely iTunes obsessed sound-cast also). This came out around the same time as:
- CHICAGO SUN-TIMES Andy Ihnatko Avoid the loony Zune - "The Zune is a complete, humiliating failure." Oy!
- MSFTextrememakeover Portrait of the emerging business as an older dog - looking at Xbox five years later, when it was supposed to have paid off for every single year of itself. How has that gone?
- MSFTextrememakeover Is this really the best you can do - a Zune focused post about whether Zune is a defining hallmark for Microsoft. Not so much.
- (a) How To Bypass The Zune's WiFi Sharing DRM - Gizmodo and (b) MAKE Blog HOW TO - Copy data off a Microsoft Zune (use as a hard drive) show the power of the determined. Sure, we can release a future mandatory Zune update and play cat and mouse like Sony with the PSP, but how many customers are you pleasing? Well, besides the record companies.
Anyway. Props to J for the refreshing dose of determined culture and actually endeavoring to make a new image for Microsoft and probably cause Sony to shoot all of its toes off with platinum bullets. But how does the bottom line and results come up for J and Microsoft? So far, our new soul seems obsessed with blowing all of our money. Dividends? Buy-backs? Hell no. Let them play Xbox!
Nero's got a new fiddle.
More interesting to me in the article are the changes being called out at Microsoft. Snippet:
Lately, some outsiders who work with Microsoft detect signs that the culture is slowly shifting as well. "They're definitely in the middle of a strategy re-look," says Hewlett-Packard Co. chief strategy and technical officer Shane V. Robison, who chats with Microsoft brass. "It will be a fairly orderly evolution, but there's a lot of new discussion that I'm seeing."
Joel and the menu of doom: Joel Spolsky grumbles about the revised Vista shutdown options. Moishe Lettvin follows up with the more interesting post-MSFT inside perspective of what it was like to try and design some menu options: moblog The Windows Shutdown crapfest which is a more interesting read given that it discusses the meeting-cluster-flub Microsoft seems to be obsessed with. Or perhaps that was old bad bureaucratically obsessed Microsoft. Joel followed up on that. Even post-MSFT-Scoble followed-up with a big thumbs down / hard-to-dance-to all the Microsoft committees.
How to avoid that cluster-flubbing in the future? You've got to trust your individual contributor feature owners and let them revel in having the courage to make decisions on their own. And compensate them well for their successes. Plus, wipe out all those meeting obsessed management layers. This was a small dose of Philip Su all over again.
The small bit of Microsoft culture you have to figure out what to do with: our obsession with consensus. Maybe you've had success at avoiding it (like a new webcast a few of us watched recently by Microsoftie Josh Ledgard). How do you get it done right, Microsoft-style?
183 comments:
A few comments and suggestions in the spirit of positive discussions.
Stock awards is a tool to retain people. We give people stock that vest over 5 years with the hope that they will not take their bonus and jump ship. If we buy into this, then a 0 stock award is a clear signal that we do not care too much about whether you stay or go. I think it is completely bone headed to set rules that relate number of years at level to 0 stock award or a Limited classification. We do not promote people on tenure so why should we slap Limited rating based on tenure at a level? Besides promotion to the next level is predicated on 2 things: employee's readiness and the existence of business need. How screwed up is that unless it is a passive agressive means to cause attrition? But I do agree that questions need to be asked if someone is at a level too long. The right approach would be to ask direct managers tough questions on why a report is at that level this long and what is the plan to grow them up or out.
We as a company is now roaming the wilderness because we have forgotten what our purpose as a business is. Can any of you tell me what is our reason for being? A business cannot flourish if its sole purpose is to just make money. Without a clear purpose, vision gets foggy and we chase mirages like the Zune, Dynamics etc. So a request to our leadership = please define and articulate clearly our reason for being. By the way it cannot be "we change lives through innovative software" as it is not clear enough. Unfortunately we in mid-management cannot do this so we have to ask for your help. In the vacuum we are forced to make this one up and the company suffers due to lack of unity of purpose.
Accountability is completely missing. Look around how many people were promoted this year after they led absolute disastrous projects. Here is an idea for bringing it back. Split up the yearly bonus pool into Team Bonus + Individual Bonus. Teams (like individuals) who do not meet their commitments get 0 or low share of the team bonus. Within teams there are individuals who perform miracles even when teams do poorly. They should be able to get a high share of the individual bonus. This has the good side effect of creating an incentive for members of teams to question management effectiveness constantly. I often wonder whether there would have been more hard questions asked from within the team in WinFS if the team members saw part of their bonuses tied to the team's performance.
There you go mini. You wanted critical positive comments and you got some. I do not have all the answers but am always willing to engage in the debate and bring my ideas to the table to help my company flourish again.
Hey Mini,
I read and enjoy your blog a lot by reading your perspective and insight into the problems MS is facing and potential solutions.
Now, here is a doubt. Its on the blogosphere repeatedly and emphatically, these days that the future is the Web. The role of PC is diminishing gradually in the Web 2.0 era. Now, if MS goes mini and reduces itself to two cash cows - Windows and Office, pleasing shareholders, we might be well off during the short term, but how does that futureproof the company, if we do not make investments in the technologies that many analysts believe will drive the software industry.
I do not know if you argument for slicing down MS involves giving up on MSN and Windows Live and many other teams that do not seem to be making any profit for now.
If microsoft goes mini, we wouldnt have xbox, zune or many other not so profitable products now, but have potential to turn out great, or atleast are inline with the direction the whole software industry is moving towards.
I do not know why, but suddenly, at as early as 5:05 in the morning, I feel that reducing Microsoft to Win and Office will be a great disaster for the company in the long run and will be very ineffective solution for any software company in the world.
re: "Limited Round-Up, New Souls, and Old Problems". I got Ltd II - yay! Got the 4% payraise - nice! Got 0 stock - not nice! Good job I only paid half on my National Lampoons Xmas swimming pool ;) Now, the Ltd II was a stomach churner when I first heard "limited". But, I went home, went through my last years' project status notes and chatted with folk - I wasn't such a bad person after all: projects ahead of time; initiated some new ideas and partners/customers loved me - aaaahhh. I took a knee-jerk move to another team, really for a sanity check. I saw two additional management layers and 3-5 emails a day to double-check that I really was using Three Kinds of Softness in the restroom. Oops, I was right, in five years at MS, things have changed. Oh! J Allard: your team wants to hurt you - I sat next to them at the Co. Meeting when you were on stage - they were shouting bad things at you - yikes! Now in rambling mode. 'Nuff said - taking a gig on the "outside" - one layer between me and the CEO, 50% pay raise and health benny's same as MS ('cept a $15 doctor vist co-pay).
I am concerned not only for the future of the company but for that of a generation of individuals that have to compete on a global basis.
The creation of Microsoft, IBM, Google, Ford Motor Co., have all been based of an entrepreneurial spirit that states if you work hard, have creative ideas, and contribute; then you will control your destiny and reap the rewards.
Everyone is so wrapped up in ancillary items that have nothing to do with excellence in performance and behavior. The greatest corporate cheer did not go out because Vista shipped, it is because towels came back to campus. The argument over Limited II is a discussion in “political fairness”; not in the creation of excellence in the organization.
I am attracted to this blog because it promotes the notion that we should be aggressive and competitive in our approach to the industry and our competitors. I am disappointed that it is getting dragged down into a discussion about the lowest common denominator.
I see a generation steeped in “what’s in it for me”. It feels so socialistic. It must be HR/management’s fault that I don’t have… Let those that work hard pay for those of us that don’t. It is “those people” that need to be pulled down to the middle to make sure that the have-nots feel better about themselves. Let’s not have winners and losers… we should play the game and not keep score. Can’t we all just get along??
No differentiation??? Why buy Windows or Office if there is no differentiation, Star Office is the way of the future. Get an IPod, not a Zune, what’s the difference.
“Microsoft has no differentiating value statement” --- Have Ballmer say that out loud and see what happens to the stock price…
The challenge is putting differentiation into the work force. How do you reward people that make things happen? You might give them larger raises and bigger stock grants. How about for those that do a good solid job?? Pay them a salary and thank them for the effort. Seems reasonable. Don’t like the term Limited II; change it… I am OK with that, but in our current state of political correctness, it might have to be “Solid Superstar that got screwed by co-workers, their manager and politics but we still love ‘em.” I would hate for anyone to get their feelings hurt.
Sorry to be blunt. Business is a game played by big boys and girls and the stakes are for all the marbles. I am OK if that game is not for everyone.
On the backside of Thanksgiving, I am pretty sure that the vast majority of our employees had a roof over their heads and food on the table. Not bad SteveB, thank you.
I want more. I am willing to work hard and let the chips fall out accordingly.
Mini,
The first thing to look for is: will the "Limited" ranking be "fixed" next year? Will there be accountability for the “limited” HR person that proposed such ranking and criteria like the one for “Limited II”?
In the meantime, a friend of mine was taken to HR by giving feedback that someone was “incompetent” when doing a certain totally work-related task. And HR made a case against him saying that he was talking about “personal attributes” when talking about a person. How is this consistent with your suggestion of "year-around non-anonymous feedback open to anyone"? (Basically incompetent employees are trying to prevent feedback by using HR as a new tool to silence people). Since when “incompetence” is a personal attribute?
Maybe when applying to HR positions at Microsoft you should fill-in a form:
Name:
Eye color:
Sex: [ ] Male [ ] Female
Competent: [ ] Yes [X] No
Better have the value pre-defined for Microsoft’s HR personnel!
In September I received a limited II.
The point made earlier that when MS stops giving you stock it's pretty clear that they don't care if you leave -- dead on.
If they want you to stay, they give you stock. If they don't care, they allocate the stock elsewhere.
I got the message. Thursday's my last day at MS... on to a totally new career running my own business. Gutsy or stupid, we'll see.
But at least when I look at myself in the mirror I see someone with hope and passion, not another drone whining about the system.
That's certainly something to be thankful for.
Adieu Microsoft.
Further to your link to my Xbox post. I ran across this today and updated my blog story accordingly (link can be found there if interested):
"When asked how long it will be before Microsoft starts making money on Xbox, Bach replied, "To be clear, we have said that in fiscal 08, entertainment and devices makes money. That’s not exactly Xbox. We don’t break profit down by business. And there are parts of entertainment and devices that make money. Xbox doesn’t. Xbox has to make significant progress to enable E&D to get there."
In other words, even in FY 08 (7 years after launch) - despite repeated previous guidance - there still isn't confidence that Xbox itself will finally be standalone profitable and therefore able to at least begin paying back the $4-5B "invested" to date.
"However, Bach added, "We feel we are on track.""
Of course, the same guy figured payback would occur in less than 5 years, but is now backpedaling on whether even just sustained profitability will be possible after 7.
Not only is it bad management, it's also ILLEGAL! It's a violation of both state and federal law to have management policies that favor younger workers over older ones. This is age discrimination, plain and simple. The higher level you are at, the more difficult it is to earn a level increase.
You're only protected from age discrimination at age 41 and over.
I got "Kim"'ed at age 40 and decided to leave Microsoft.
It sounds to me like they are introducing the same system with new labels.
Does anyone know if they still have the annual firing of those not deemed worthy by the "curve"?
Microsoft reminds me of that movie called Logan's Run.
I think the team bonus is a good idea. I think the "individual" bonus is a bad idea. (heresy in the halls of Microsoft becuase there, you are an "Individual" contributor).
First of all, a team bonus for successfully delivering a quality product on-time and without bugs would focus the team on what's important (like making it work right the first time and shipping it when the customer wants and not when you're finally sick of looking at it). And then rewarding the accomplishment of that goal.
Second, it would provide a lot more accountability and visibility and somewhat less room for obfuscating the schedule or the reason for slipping. (it's YOUR schedule so YOU are late, maybe next time you won't believe all those impossible promises or take on a plan without a backup or contingency...you know, the things a good manager or lead dev thinks of and a bad one doesn't). Individual contributors simply need to find a scapegoat.
Third, why do you need individual bonuses on top of team ones? That just undermines the collective team attitude. Now dividing things among the team unequally is fine, if the team is the one doing the dividing, not some distant manager who is 6-levels removed from the project. On a team, you are all in it together, to succeed or fail. Whatever happens, it will happen to the group, not the individual. The excessively individualistic attitude is corrosive and counter productive in a team. (again, it's fortunate for me they don't burn people who speak heresy).
Finally, there's the ever-present "team bonuses just encourage the slackers to slack off and reap the benefits of the hard workers" excuse. That is generally presented by people who haven't worked on a healthy, well-managed team. On a well-managed team, the slackers either self-select out (i.e. they leave on their own) or they are peer-pressured out. Either way, if it is a problem, it isn't a permanent one.
Bottom line, individual bonuses just encourage the Machiavellian atmosphere you currently see. The people who win in the current system are those who are simply the best at gaming the system, they are not always the best people to "delight the customer." Because the "individual contributor" could give a rat's ass about the customer. They are individual contributors looking out for number one.
You might give them larger raises and bigger stock grants. How about for those that do a good solid job?? Pay them a salary and thank them for the effort. Seems reasonable.
Solid performers vs superstars is not the issue. Solid performers and superstars vs brown-nosing visibility hounds is the issue.
I think the team bonus idea is a great one.
I think the individual bonus idea is a bad one.
First, the team bonus will focus people on working together to achieve a common goal instead of encouraging people to focus on sucking up to the next level and make sure they are "visible."
Second, it will improve accountability and make the bad projects and/or project managers less able to hide behind a veil of excuses disguised as clever PowerPoint slides or Microsoft Projet estimates. As a team manager, if YOUR project is late, it's YOUR fault. Maybe next time you won't believe all those impossible promises from other groups or embark on a project without a "plan-b."
Third, I think individual bonuses completely undermine the team spirit. Now, if a team wishes to divide their team bonus up unequally, that's fine, but it should be the team doing the dividing (not the team's manager or the group manager, 4-levels removed). If you keep the individual bonus, you keep the need to suck-up to the boss and not just deliver the goods.
Finally, there's the "team bonuses just encourage the slackers to reap the benefits of the hard workers" excuse. That excuse is usually presented by people who haven't worked on a good team. The transfer rules would need to be loosened so that people could run from a bad team (leaving the bad team manager left holding the bag) and people could flock to the teams that best fit their skills and work ethic.
Bottom line, a team bonus would encourage people to focus on "delighting the customer" by delivering quality products, on-time. The "individual bonus" just encourages the current, Machiavellian environment.
I guess this all gets back to what the goal of the company is as to what is really important.
According to Fortune, Microsoft's pay is among the highest paying companies in the tech world. A handful of tech companies pay more than Microsoft. But these companies are located at more expensive places too. Living expenses in the valley are easily 25 to 30 percent more than in Seattle. Account for this and Microsoft is easily the top paying tech company.
http://money.cnn.com/magazines/fortune/bestcompanies/pay/
Yes, Ballmer is doing a good job in putting food on our tables and a roof on our heads. On top of that he is doing a good job in putting flat screens in our living rooms and a sleek cars in our garages if we wish. Everybody in Microsoft with two pays can easily afford these luxuries.
"Let those that work hard pay for those of us that don’t. It is “those people” that need to be pulled down to the middle to make sure that the have-nots feel better about themselves. Let’s not have winners and losers… we should play the game and not keep score. Can’t we all just get along??"
You really, really don't get it. Who said anyone wanted to coast and get all the great bonuses and bennies? Nobody! The point is that the "worker bees" - who are not coasting, they are WORKING - are getting paid less and less (raises are < inflation every year) and being incented to leave (no stock to vest over time, given insulting labels for reviews). The POINT is that the message being given is: leave. If that's the message HR intended, then all is fine and dandy in MSFTland. People have definitely gotten that message and are leaving. Would be nice to get that message more straightforwardly, but hey, organizations (and certainly HR) are not perfect.
However, if MSFT actually needs worker bees, which is what many here are saying, then it is shooting itself in the foot by implementing Ltd II.
Is that clearer now? Your post is completely offbase and not what people here have been saying.
"I think the team bonus is a good idea. I think the "individual" bonus is a bad idea."
Individual performances matter a lot. So I do not agree with you that individual bonus based on my performance is a bad idea. Like teams, individuals need accountability as well. Making it clear what portion is tied to the team's performance and what portion is tied to my individual performance is the right thing to do. Teams that are not performing well need infusion of strong talent to turn it around. If there were no individual incentives, these teams would find it hard to attract talent and lose the few remaining good ones they have.
Oh yeah, this thing is just FLYING off the shelves. Unlike many, I agree that the XBox is a good investment. The ZUNE is a poor one (at least in it current iteration).
Can we EVER knock one out of the park on day one?
This kind of crap just reinforces our very own "halo effect" - that MS doesn't get it right until the 3rd version.
WSJ.com - Microsoft's Zune Falls Off Sales Pace For Media Players
If Microsoft sells close to the upper range of sales estimates of 500,000, Zune would generate about $125 million, a miniscule amount in comparison to overall revenue. In fiscal 2007, analysts surveyed by Thomson First Call expect revenue of more than $50 billion and earnings of $1.45 a share. Microsoft has said it doesn't expect to profit from this product right away.
http://online.wsj.com/article_print/SB116467941732234076.html
It would be simply ** fascinating ** to see how profitable the "Entertainment &Devices" unit would be, if the MacBU were pulled out of the equation.
Microsoft's pay is among the highest paying companies in the tech world
This is misleading. Microsoft officially pays 67 percentile. I have been MSFT for 9 years and my salary is $5k below the median salary according to salary.com (local zip code, similar years of experience).
Of course the average annual pay in fortune could be true given there are 900 partners and thousands of middle managers whose pay are way above the 67 percentile. MSFT is heaven for these people as majority of them can not get similar job offer at all in another company. However smart and experienced ICs are better off in other companies where there are less bureaucracy and management layers.
msftextrememakeover:
I think you should do a little research about the current xbox situation.Xbox 360 is not losing money anymore.
http://www.businessweek.com/technology/content/nov2006/tc20061116_736188.htm?campaign_id=rss_tech
"Sony's plan is much like that of rival Microsoft (MSFT): Take a loss on the console and make it back on the games. And that's exactly what Microsoft did when it launched the Xbox 360 a year ago (see BusinessWeek.com, 11/22/05, "Microsoft's Red-Ink Game"). At the time, the $399 Xbox 360 cost the software giant $470 to make, leaving a loss of $71 for each one sold.
But times change, and the prices of chips come down. A new iSuppli analysis of the Xbox 360 and the price of the components used in it reveals that Microsoft may be close to hitting the breakeven point on the Xbox 360. The console now costs Microsoft $323 to manufacture, leaving a gross profit of $76 per unit."
Of course the average annual pay in fortune could be true given there are 900 partners and thousands of middle managers whose pay are way above the 67 percentile
Not to rain on your tirade or anything but:
A) Executive management (including partners) doesn't fall under the salaried employees that this survey counts
B) Other companies have middle management and and the equivalent of partners too
I agree it's time to go someplace where there's less bureaucracy, but let's not spout BS.
Microsoft 42 $107,300
900 partners skew the compensation. They got paid $1 billion in special compensation. The partners regular pay package without special stock is 500K at L68.
Based on the brutal ZUNE launch and reception, Ballmer should spend some time reflecting (if he's capable) and reassess his belief in the ability and value for money of certain members of his management team. IMO, any randomly selected team of employees would have demonstrated more understanding for what the minimum product bar would have to be, and wouldn't have settled for anything less just to get it out for Xmas. Maybe the next project should pit a team of supposedly hot shit execs against a team of randomly selected employees with the stakes being each other's yearly bonuses?
If the awful comparison may be forgiven:
The Zune is like the war in Iraq, in that it represents the triumph of delusional thinking. It looks like a disaster, but if we just keep spending and keep believing it will work out in our favor through sheer will power and fortitude.
"The console now costs Microsoft $323 to manufacture, leaving a gross profit of $76 per unit."
It may cost $323 to make, but I'm sure we are still selling it to the distributors for less then that.
>>>>>This is misleading. Microsoft officially pays 67 percentile. I have been MSFT for 9 years and my salary is $5k below the median salary according to salary.com (local zip code, similar years of experience).<<<<<
This is not the first time, I have noticed that many commentators on minimsft have mathematical knowledge below high school level.
First, below median is not a evidence of 67th percentile. It is an evidence of below 50th percentile. Second, salary.com can't see whether your mathematical knowledge is below high school level.
67th percentile salary is a good number. It means Microsoft targets to pay more than 2/3rd of other equivalent employers. I do not think there are many other companies with this high percentiles of target salaries. Most companies target to pay at median. I do not know about Network Appliance, but Cisco does target at median (unconfirmed information from friends).
Why 67th perecentile is good. Because paying at 67th percentile is invariably going to put you at the top of the average as this survey shows. At individual level, a person may find a better salary elsewhere. But I bet you that most of the Microsoftees can't find a better paying job elsewhere. Note Valley's dollars are 25-30% inflated compare to Seattle's dollars.
Maybe the next project should pit a team of supposedly hot shit execs against a team of randomly selected employees with the stakes being each other's yearly bonuses?
Brilliant! Except instead of "randomly selected" let's make it Execs vs. a team composed entirely of Limited IIs. My bet is on the Kims.
"Xbox 360 is not losing money anymore.
...
The console now costs Microsoft $323 to manufacture, leaving a gross profit of $76 per unit."
Interesting that the units themselves are turning a profit now but it barely scratches the surface of development and marketing costs. If sales targets are being met, that means ~0.7M units are sold per month. Assuming a year of sales at this rate and level of profitability (which is ridiculously optimistic), that multiplies out to $651M. Didn't the initial 360 advertising campaign cost $500M?
"msftextrememakeover:
I think you should do a little research about the current xbox situation.Xbox 360 is not losing money anymore."
The iSuppli numbers referenced in your post are estimates of manufacturing component costs alone and even then, self-admit to not including even all of those (e.g. no controller, cable, packaging, costs). See detail here iSuppli. Then you have the transportation, marketing, inventory, distribution, etc., costs associated with getting the box to consumers and of course operating and maintaining Live. So while the trajectory of component costs is encouraging, it doesn't change the fact that the business overall is still unprofitable (as you saw last Q, and as Allard confirms in the snippet I provided). Worse, as per that snippet, Bach now appears to be hedging on it being so even by FY 08 - despite repeated corporate guidance to that affect. Those, unfortunately, are the facts. Now, if someone wants to take those facts and still make the case for why and how it's a good investment -or even "one of the greatest creations of shareholder value ever" as Ballmer says, I'm all ears.
Somone said, "900 partners skew the compensation. They got paid $1 billion in special compensation. The partners regular pay package without special stock is 500K at L68."
This happens at lots of other companies as well, most big companies today have highly skewed pay. So when you do the salary comparison surveys, remember MSFT isn't the only one with this problem and the survey results reflect it elsewhere too.
I think you should do a little research about the current xbox situation.Xbox 360 is not losing money anymore.
And:
But times change, and the prices of chips come down. A new iSuppli analysis of the Xbox 360 and the price of the components used in it reveals that Microsoft may be close to hitting the breakeven point on the Xbox 360. The console now costs Microsoft $323 to manufacture, leaving a gross profit of $76 per unit."
Key word: "gross" profit, not net. You still have distributors and retailers taking their cut of that $76 per unit before Microsoft sees a dime of "real" profit. That's why the article says "Microsoft may be *close* to hitting the breakeven point on the Xbox 360." It doesn't say what you claim it says.
HOT SHIT EXECS V. THE PROLETARIAT
This is one of the best ideas I've seen in awhile. I would even go so far as to make it work like a reality TV show (without the cameras). People apply for selection, but are chosen randomly based only on the need to fill certain skill sets. You get 1-2 people in each category: dev, test, PM, marketing, and ops, maximum of 15 people with none of them higher than L65. The group elects a leader that reports directly to Ballmer (and fills regular roles and responsibilites). The team has 1 year to build and market a product. The bonus is 50% of all profit, divided equally, for the first two years post RTM. No other bonuses or stock allowed.
In the Red Corner, we have the last three big bets, all headed by executives (no sense in throwing more money their way, just to prove a point).
I would wager that 10,000 people would apply for the opportunity. And while it may not be a $10B business in the first year or two, I bet it wouldn't lose money.
Someone said: "On top of that he is doing a good job in putting flat screens in our living rooms and a sleek cars in our garages if we wish. Everybody in Microsoft with two pays can easily afford these luxuries."
OK. So where is my MS-provided, MS-employed spouse? Because if that's what it takes to make compensation equitable, it should be a line-item benefit.
As it is, I'm a single person, period. Not even a non-MS spouse. I'm just barely holding onto my mortgage, what with no raises for 3 years and non-COLA raises for a couple before that (I am a "Kim"). If taxes and expenses keep going up like they have the last year, I'm going to have to get a second job or sell my house. Except--rental rates will kill me, and that doesn't solve the problem of rising cost of goods and services. And I'm not really into marrying just to make the mortgage, so I'm in a bit of a bind.
Regarding the "Limited" ranking, there is an article that discusses the effect words/labels/stereotypes can have on performance: http://www.slate.com/id/2154331/fr/rss. Wonder how many people will perform less-well this coming year, having been slapped with the label "limited." (It was bad enough being labeled with the other system, knowing your number could bear no resemblance to your actual performance, or being told there weren't enough of the 4.0s or higher scores to "go around." Now, "Limited.")
As soon as I can find a way, I'm leaving. But it's hard, because I can't take a pay cut just to jump ship--having no MS-spouse to take up the budgetary slack.
I think you should do a little research about the current xbox situation.Xbox 360 is not losing money anymore.
The console now costs Microsoft $323 to manufacture, leaving a gross profit of $76 per unit.
As I've said before, I am a fan of the XBOX business model, but the XBOX team needs to quit burning through the venture capital like it is limitless (although it appears that it really *is* limitless, so why should they listen to me?).
However, I disagree with your statement that the XBOX 360 isn't losing money. In fact, we're still losing a lot of money on each one.
The first point I would like to make is that your math subtracts an estimated cost from the full retail price. However, in the real world, the distributors and retailers get a little cut of the action, so you should really be subtracting from $360 ish instead of $399, which cuts your theoretical gross profit down to $37.
Note that that is "gross profit" and your statement says that Xbox 360 isn't losing money, which is net profit. Sorry, but the volumes don't even come close to making the Xbox console profitable on a 9% gross margin. We still lose money on every Xbox 360 sold - albeit not as much.
I think we may be close enough to begin making up for the console loss with games and Live. However, we still have $4B - $5B of seed money to repay (with interest), so the payoff isn't until next decade, which is *way* past the original predictions (which shouldn't surprise you - when was the last time we hit our first date? Our second date?)
I do give the Xbox team credit for building a valuable brand, franchise, and ultimately revenue stream (not to mention a kick @$$ system and games). I just wish they hadn't burned through so much of my kids' college tuition in doing so ...
nff
PS - Watch Sportscenter tonight. XBOX is the sole sponsor!
The contribution ranking simply misses the boat. It should be based upon an employee's long term value to the company, not to their own career. While the ability to move up is certainly a factor, there is no reason someone cannot stay in level for several years or more and still provide strong value to the company. There simply comes a point within any position when you cannot move higher. The whole company cannot keep moving up. This is, in essence, what our review system misses.
Mini you make a great point about consensus at MS. Consensus is used by management to avoid accountability for decisions. It also supports those who do not have substantive contributions on a team, by allowing them to contribute to the work of others. The more consensus in an org, the more people you have who do not provide real value. LCA is the quinessential example of consensus gone wrong. Try to get LCA to give you a decision on anything and you end up with a thread a mile long and no decision. It is an example of an org that has way to many people who are not substantive contributors.
Someone said: "At individual level, a person may find a better salary elsewhere. But I bet you that most of the Microsoftees can't find a better paying job elsewhere."
Most of the partners and majority of the middle managers can NOT find a similar paying job elsewhere. Majority of the solid engineers CAN find a similar or better paying job elsewhere.
Anonymous at Tuesday, November 28, 2006 9:54:21 AM might want to reread the comment he's critiquing.
Let's recall that Anonymous at Monday, November 27, 2006 10:18:57 PM said:
Microsoft officially pays 67 percentile. [But] I have been MSFT for 9 years and my salary is $5k below the median salary according to salary.com (local zip code, similar years of experience).
(Emphasis added. [But] added.)
IMO, one generally shouldn't assume that people who take the time to contribute to a conversation know less than you do. The all-too-common knee-jerk reaction to instantly respond with an insult rather than considering that perhaps the reader misinterpreted the post is unfortunate.
My $0.02.
Cheers,
Scott.
Slightly OT - but WTF is "squirting?"?! Please, that just does not sound right at all. Who comes up with these moronic ideas?
Ballmer: "I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation. That's a software experience."
I left MS earlier this year. Before I left, I was hoping the changes Lisa B would make would be substantial - didn't happen. I waited until reviews, was not bad - but I didn't get any feeling of enthusiasm from my manager.
I wrote to Steven Sinofsky, requesting an opportunity in his group, providing a reason for why I was looking to move from my group - I'd heard that he was one of the few people who were all for change. He replied, graciously saying I needed more experience - I think he meant - "at microsoft".
I quit - I am at one of MS's biggest competitors today, glad that StevenSi didn't offer me an oportunity. I am an equivalent of a L67, and also see clearly the discrimination I was being handed (being one who was not in the white-boy's only club that management is).
Have you seen the ratio of managers of various races, even though the asian and indian sub-continent populations have a significant presence at MS, I am surprised they haven't been slammed with a lawsuit yet.
Well, being my alma mater, I still hold fond memories...but hell, adios!
Poster 1 said: "Someone said: "On top of that he is doing a good job in putting flat screens in our living rooms and a sleek cars in our garages if we wish. Everybody in Microsoft with two pays can easily afford these luxuries."
Poster 2 said: "OK. So where is my MS-provided, MS-employed spouse? Because if that's what it takes to make compensation equitable, it should be a line-item benefit."
Thanks, poster 2, for saving me the trouble of composing a similar statement.
And by the way... it warms the cockles of my heart to find out that, having joined MS as an experienced dev and having produced since I arrived here 4 years ago, my salary is under the average quoted in this blog.
Does anyone know if certain parts of MS (cough, Windows, cough) just have a very small annual increase budget, or what? My stock award rocked the house, but although I outproduced the majority of my team and I'm underleveled, my annual increase was the same polite 4% that even some limited IIs have reported receiving in this blog. I did better last year, and I don't know whether it's because our pie got smaller, or whether some vocal new team members just got louder at self-promotion and got some of the points historically allocated in my direction.
Slightly OT - but WTF is "squirting?"?! Please, that just does not sound right at all. Who comes up with these moronic ideas?
Ballmer: "I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation. That's a software experience."
When Ballmer wants to "squirt" you a picture of his kids using his Zune, it means he wants to send a picture file via WiFi to your Zune.
However, "Zune" sounds like the French-Canadian slang for "penis".
Microsoft didn't create “Zune”
“Additionally, the Lexicon Research Network of 60 Ph.D. linguists in 39 countries was tapped to provide insights into the latest brands in music and video entertainment and to give us suggestions as to words, word parts, sounds and metaphors that might be applied to a next generation entertainment system,” Placek added.
Microsoft dismisses music player's linguistic lapse
A Microsoft spokeswoman in Montreal told CanWest News Service that ``it was pointed out to us'' during focus groups in the province that the proposed brand name sounded much like a French-Canadian term used as a euphemism for penis or vagina.
The French word "zoune" and the variant "bizoune" typically serve as a less jolting way of referring to male or female genitalia when addressing children.
Msftextrememakeover
The Xbox 360 was designed to break even over its life cycle.The original xbox was not.Last year it cost $470 to make a 360.Now it costs $323.Next year it may cost $223 to make.Thats a good sign.
The xbox team made an honest mistake on their first try with xbox 1 when they put in that built in hard drive.It was MS first try in an industry where they had no experience,no relationships and had a lot to learn.
Like Ballmer and Bach said it would had cost billions more to acquire Nintendo.They are going to knock it out of the park with Xbox 360.The xbox project was needed to show that MS was more than a 'copy' and 'aquire' company.That they could build a brand new business from scratch.People need to give them a break.
"But I bet you that most of the Microsoftees can't find a better paying job elsewhere."
Speak for yourself Bud. Unless you're a "partner"! I left MS last yr at level 66, making $160k with 20% bonus target after 10 dog yrs. Went to a smaller company for almost double the pay and way more stock options (almost 6 figures). And the company's stock price actually moves (up).
Don't forget many people who work at MS came from investment banks and consulting firms. I for one don't miss the MS BS -- whenever I feel a bit frustrated about anything at my new job, all I have to do is read this blog to remind myself of how screwed up things apparently still are at MS. The only word I can think of for how the company treats many employees, is abusive.
"Ballmer is doing a good job in putting food on our tables and a roof on our heads. "
So... You actually think it's monkey-boy who's doing that, eh?
Well, I guess the company indoctrination worked on someone.
> You insist on differentiation, you get exactly this sort of crap.
Well, I work in classical European private company (not M$). We have that kind of employment system: non-differential.
Since I am not a writer, I would make the comment short.
The net result of such system: total ignorance. People just do not care, since they know that everybody is equal. And whatever they do - that will not change. There is no competition - nor amongst people, nor for ideas. Everything is done "somehow" just to fill blank fields in numerous bureaucratic forms with checks.
Differential is needed. Even if just to see who gets pissed. And the people who gets pissed are the people who care. And that's the people most valuable for your business.
Over here in Europe, people are just cogs. The worst: most people are Ok with that and never really want to have any responsibilities, last - to grow anyhow. Thus the non-differential system.
Differentiations are needed just to help people to be in check with company and its management. Of course, the differentiation itself has to be kept in check too. "Moderation" is the keyword.
> Based on the brutal ZUNE launch and reception, Ballmer should spend some time reflecting (if he's capable) and reassess his belief in the ability and value for money of certain members of his management team. IMO, any randomly selected team of employees would have demonstrated more understanding for what the minimum product bar would have to be
MSFT execs dont understand capital allocation. This includes Ballmer and Gate.
Does anyone know if certain parts of MS (cough, Windows, cough) just have a very small annual increase budget
From what I know, employees in Office and Windows advance much slower than in other groups. Now that we have level transparency, it's clear that even a few of the highest-regarded devs in Office are only getting promoted once every 4-5 years. I wonder how this squares with HR policy? Also, I expect the situation to get worse with the org chart flattening.
BLECH. Could we/whoever not come up with something less offensive than "squirt" to refer to sending someone a tune or picture from one Zune to another? It makes me cringe and want to cover my 5YO's ears. I saw this in a Newsweek column last week and just about gagged.
Someone PLEASE come up with something better, and FAST.
And please, please tell me that we didn't offer that as the word to use for this function. Please..??
This is not the first time, I have noticed that many commentators on minimsft have mathematical knowledge below high school level.
First, below median is not a evidence of 67th percentile. It is an evidence of below 50th percentile. Second, salary.com can't see whether your mathematical knowledge is below high school level.
...
Why 67th perecentile is good. Because paying at 67th percentile is invariably going to put you at the top of the average as this survey shows.
I'm not the original poster that you're replying to, but couldn't resist. 67th percentile refers to the range of companies (e.g. the NUMBER of companies), not to the aggregate salary range. So MS paying better than 67 percent of companies doesn't mean it is paying better than the middle point in the salary range. The other 33 percent of companies (that pay more than MS) may pay very high and skew the median salary point way up. I don't know whether this is the case, but wanted to point out a mathematical oversight, considering you're coming off with such an aplomb about high-school math.
>So... You actually think it's monkey-boy who's doing that, eh?
Stock's not plunging, no massive layoffs, no selling off of divisions, not many execs pulling on the ripcord to their golden parachutes, etc. I'd agree the other guy is justified in saying that the Ballmer and the execs aren't doing a terrible job. Limited II maybe but not terrible.
The contribution ranking simply misses the boat. It should be based upon an employee's long term value to the company, not to their own career. While the ability to move up is certainly a factor, there is no reason someone cannot stay in level for several years or more and still provide strong value to the company. There simply comes a point within any position when you cannot move higher. The whole company cannot keep moving up. This is, in essence, what our review system misses.
Bingo. This is what's insane about the policy of canning people who've been in level too long. It forces people to chase promotions whether they want to or not.
So, how about it guys? When the Peter Principle comes for you, what would it take to retain you at MS? Just a COLA increase and no stock award? Do you want to be rewarded with a bonus anyway just because? Or maybe the Peter Principle applies to everyone but you?
I said: "On top of that he is doing a good job in putting flat screens in our living rooms and a sleek cars in our garages if we wish. Everybody in Microsoft with two pays can easily afford these luxuries."
Somebody responded: "OK. So where is my MS-provided, MS-employed spouse? Because if that's what it takes to make compensation equitable, it should be a line-item benefit.
As it is, I'm a single person, period. Not even a non-MS spouse. I'm just barely holding onto my mortgage,"
My response: In spite of being a single, you are holding on your mortgage is a luxury. You chose your luxury to be a residence owner.
Microsoft does not provide you with Microsoftee spouse. All I meant is that in this country, it takes a family two salaries to afford luxuries. One salary does not even entitle you to live in your own house, unless you make sacrifices elsewhere.
You won't be able to afford luxury with single salary at another company too. Cisco's single average salary won't allow you to pay your mortgage. Yes if both husband and wife are working on Microsoft and Cisco kind of salries then they can afford luxuries.
Microsoft's stock can't grow exponentially. That's the fact. Earlier Microsoft's stock could have acted as the second salary and not any more. Microsoft's pay package is more than median (50 percentile) and if you know, point out a company which attempts to pay more than median.
"Msftextrememakeover"
Already agreed that the trajectory of costs is positive. Also agree that much of the problem comes down to mistakes made in round #1. Understand and am sympathetic to the cost of learning, but the result is still an overall investment-breaking $4B+ loss to date and no prospect of profit until '08 or beyond. Don't buy the Nintendo argument - sorry (see my post today if interested in why). Do hope you're right about 360 knocking it out of the park because the costs are now "sunk" from an accounting perspective - so making the most of it, assuming ongoing losses can be contained, is the logical best choice. Finally, I should point out that my questioning and criticism of the overall business decision in this case - as in most - is focused on senior management, not the many general employees who no doubt are busting their ass to make whatever decisions get handed down as successful as possible.
Individual performances matter a lot. So I do not agree with you that individual bonus based on my performance is a bad idea. Like teams, individuals need accountability as well. Making it clear what portion is tied to the team's performance and what portion is tied to my individual performance is the right thing to do.
It is entirely true that both individuals and teams need to be accountable, but when you keep the accountability of the individual within the team's realm, it is much more transparent and visible than when an individual has negotiated some private deal between him or herself and their manager/team leader.
For example, in the team-only bonus scenario, if I join a team and don't pull my share the whole team has a common interest to encourage me to keep up or trade me out. This is highly visible and if it is a problem, it will be solved quickly because EVERYONE on the team has a personal motivation in resolving it. In the other scenario, if I'm not pulling my weight, the other team members might grouse about it and complain, but since their individual bonuses are not directly threatened it really won't bother them as much if the manager doesn't do any thing (Has anyone at Microsoft ever seen this?) The problem with the second scenario is that, while some individuals might still get their individual bonus because they were stellar performers, if the team doesn't deliver for whatever reason, then that scenario rewards individual success but collective failure. Great for you, the IC, but bad for the company. In the team-only approach, what's good for the individual is good for the team and is good for the company.
Teams that are not performing well need infusion of strong talent to turn it around. If there were no individual incentives, these teams would find it hard to attract talent and lose the few remaining good ones they have.
Well that would certainly make the problem visible, now, wouldn't it. No way to hide under a deck of PowerPoint slides from that, if an entire team up and walks off the job. After a couple of those you'd know who could manage a successful team and who was just the brown-noser.
But, remember, the team can decide to distribute their award unequally. If you are on a team that needs a superstar to get your team bonus, it would be in your interest (as a team) to cut the new talent in for a bigger piece of the pie, if that's what the team and the superstar thought that the project needed.
Maybe you could add the following question to the Microsoft interview loop:
Which is more?
a) 20% of 0
b) 10% of 100
If you have 5 people on your team, and the team fails to deliver, everyone on the team will get (a). if you hire a superstar and give them 50% and the original 5 split the rest, (as an easy to calculate example), the original five will get (b).
In an example implied by this comment, it might seem fair to the 1 person on the team who, against all odds, does 90% of the work, but the team still doesn't deliver, should that one person get a bonus?
If you don't care about shipping a quality product on time, then sure! Why the hell not? But how long can that go on?
I don't expect Microsoft to jump on this concept any time soon because shipping quality on time and being accountable just don't seem to be valued there. Maybe someday....
>The net result of such system: total ignorance. People just do not care, since they know that everybody is equal. And whatever they do - that will not change. There is no competition - nor amongst people, nor for ideas. Everything is done "somehow" just to fill blank fields in numerous bureaucratic forms with checks.
What an interesting contrast from Ihar Filipau :-)
As a European in the US for 10 years (7 at MS), I have to say that the difference is stark - and the main difference is that in the US, once your skills become a commodity, you are toast. It's just a matter of time.
The antithesis of this could be (no offense intended - its societal) France. In Europe in general, folks are considerably less work-obsessed, and place far more important on family and/or that which is NOT work. Working there, I never felt any particular pressure or guilt from my work: I, like everyone else, did what was expected within societal norms *there*.
I'm not going to get into a discussion on the relative quality of life between the US and Europe, but this country is renowned for innovation and entrpreneurial spirit - and is a rough place for those without these qualities, regardless of the fact that the Kims of this world are absolutely necessary in all companies.
I imagine that the reason for stark differentiation (and those on the "winning" side truly know how stark it is), is due to a fear that any overt encouragement of Kims would discourage those who are the "superstars". From a supply/demand POV, what is the relative availability of "superstars" and Kims? I think that it is assumed that Kims are replaceable, whereas superstars are not.
(Note: What constitutes a superstar? In almost all software teams, it is a documented fact that there are one or a few folks whose contribution is consistently much higher than others)
As it is, I'm a single person, period. Not even a non-MS spouse. I'm just barely holding onto my mortgage, what with no raises for 3 years and non-COLA raises for a couple before that.
Either you have a ton of non-mortgage debt, have a million dollar hourse, or are not good at managing money. I'm single and have been Kimmed way longer than you. I've got no problems paying my mortgage and stashing away money for a rainy day, knock on wood. It's a pretty spartan life, but it's good enough for me.
"Either you have a ton of non-mortgage debt, have a million dollar hourse, or are not good at managing money. I'm single and have been Kimmed way longer than you. I've got no problems paying my mortgage and stashing away money for a rainy day, knock on wood. It's a pretty spartan life, but it's good enough for me."
This is not the original poster, but I want to respond to this.
Maybe you've been Kimmed for so long, you bought before the real estate run-up, and the poster above didn't?
From what I've seen so far during a casual real estate hunt, if I am still maxing my 401-K contribution, I'd need half or more of my monthly take-home to pay a bungalow or 2BR condo mortgage in, admittedly, a safe area of King County. Yes, "safe" should not be expected to be a negotiable option, and please don't tell a woman who's been through an assault, burglaries while I was asleep, stalking and more in the more affordable areas of King County that she's worrying about nothing.
I think that it is assumed that Kims are replaceable, whereas superstars are not.
(Note: What constitutes a superstar? In almost all software teams, it is a documented fact that there are one or a few folks whose contribution is consistently much higher than others)
Sure the Kims are replaceable. But would you want a team in which the Kims constantly churn through because they are not valued and are treated as pathetic hangers-on? Sure, you get to keep the one or two superstars, because you reward them really highly. Well...maybe not. Because if they really are superstars and they realize that loyalty means nothing to MSFT (or any other big corporation), they will entertain all excellent offers from elsewhere and when they want to, they'll jump ship for something more cutting edge, or just to mix things up. Because they're superstars, they have a LOT more options then we Kim peons do.
So net result: You've marginalized your core team (the Kims) and you can't count on your superstars, despite throwing tons of $$$ at them.
Nice. Have a great time trying to put out quality products following this employment philosophy.
Sure, you get to keep the one or two superstars, because you reward them really highly. Well...maybe not. Because if they really are superstars and they realize that loyalty means nothing to MSFT...
Bingo.
See, I used to be a superstar. Frankly, I think I still am, but am hamstrung by the politics of making it past 64. Soo, four years in level (and that's really about average for 64) and now I'm officially labled deadwood and expect to be managed out. Good thing I turned down that interview with Google two years ago.
So all you L62 superstars out there - pay attention. If there isn't an official walk-back from this Limited II fiasco, and if you see L64s being managed out, think about leaving now on your terms, because the odds are if you stay you will be leaving on the company's terms in a few years.
Those are the wages of Limited II. MSFT HR and execs forget that they hire smart employees, and smart employees figure this stuff out. Limited is a two-way street, and a lot of employees are rating MSFT as having Limited potential as an employer because of this.
Don't forget many people who work at MS came from investment banks and consulting firms.
Lordy, here's Exhibit A as to part of Microsoft's problems today. People whose only job experience is to extract weath from entreprenurial activities.
Maybe if we just shit-canned everyone at Microsoft who worked at an IB or consulting firm as thier last job before coming to Microsoft, we might be able to clear out a large chunk of our ineffective middle management.
I for one don't miss the MS BS -- whenever I feel a bit frustrated about anything at my new job, all I have to do is read this blog to remind myself of how screwed up things apparently still are at MS.
It's always so comforting to hear that alums make themselves feel better by comparing their current situation to how miserable things might be for those of us still willing to tough it out.
Notes From the Field
I think that it is assumed that Kims are replaceable, whereas superstars are not.
It seems that many people reading this blog believe that "Kim" and "superstar" are mutually exclusive monikers. I know plenty of Kims that are superstars. Maybe this is just a US Field thing, but so starts my rant ...
Remember that the definition of Kim is a promotion velocity of zero for an extended period of time. Many of us in the field have been at our level for a long time because there's not a business justification for a higher level and we're not willing to relocate our family. Most of the field based Kims I know are 64-66, so we've had moderately successful to very successful careers, but most of us could keep going if the opportunity existed without requiring a relo.
I personally know at least a dozen Kims that are absolute superstars, even though they know there's not a chance of promotion - ever. If Microsoft were headquartered in the city they choose to live in, they would be VPs today and I would work for them in a heartbeat. I was a superstar for most of my early career and many people still consider me a star. I must confess that I choose a better work-life balance (better being > 0), so I don't consider myself a superstar any more. I'm just not willing to consistently work 90 hour weeks, which is what it took for me to be considered a superstar. I'm happy being Kim, and Microsoft gets a good deal too.
The five year value proposition
I still can't understand the reasoning behind giving someone zero stock just because they haven't been promoted lately. As an example, take a solid performing L64 field sales person. They have been at the level for a long time and do a great job. The only reason they have a promotion velocity of zero is there is no business justification for the higher level. The Limited II scenario says that they are worth less to the company over the next five years than the up and coming L62. In other words, they are worth less over the next five years than the previous five years despite having managed to jump the L64 (or 65 or 66 or whatever) hurdle (which, from 1st and 2nd hand experience is *hard*). Sorry, I just don't buy that. It is one of the most moronic policies I've ever heard of. That's like saying a quarterback that led a team to a perfect season and won the championship is worth less because he can never have a better season. Rather, you're going to pay the rookie more as an unknown quantity because he has more potential. Even though odds are that the rookie will never reach the level the veteran is at today. That's not the way the "talent market" works. In fact, it's the opposite. Experience and wisdom and accomplishments are valued in a normal talent market. Not so sayeth the Limited II band.
Just to be clear, I totally agree that a L64 who will grow to a L65+ over the next 5 years is worth more to the company than the Kim mentioned above, and should be awarded more stock. However, there is no way that Kim's 5 year value is zero.
Yes, I hear the argument about salary and bonus being enough. However, for this scenario, the stock is a non-trivial portion of the total package and taking that to zero is enough to make a lot of Kims start looking elsewhere. It's also enough to demotivate a bunch of Kims and turn them into a bunch of just enough to get by clock punchers. Neither scenario is good for the company.
We're a team
In field sales, most of us already get a team based bonus as well as an individual based bonus. The RBI (commission) portion of the bonus is definitely a team effort, particularly if you're in the STU, but also if you're in the ATU. I'm pretty sure our bonus pool is adjusted based on landed revenue, which is a big team goal.
I agree with the comment that team goals drive some positive behaviors. I also agree that getting rid of all individual incentive would lead to least common denominator performance. Balance is good.
Redmond or the field - let's make a deal
Mini - you should write a blog post about the pros and cons of the field vs. Redmond - I would love to read the comments. While Redmond definitely has a lot to offer (free towels!), my limited data suggests (and the MS Poll confirms) that we in the field are happier with our deal than our corporate brethren.
I just don't see or hear of a lot of the bad behaviors I read about on this blog in the field (we have our own unique set of issues to be sure). I'm sure they happen, but they aren't nearly as wide spread or blatant or something. Not that it's all roses, but there are a bunch of relatively happy campers in the field (including me). Certainly a higher percentage than this blog or the MS poll indicates in Redmond.
A big part of that, I'm sure, has to do with politics. The more people you get in a single location, the more politics you have. And I don't think it's a linear scale. Not that we don't have politics in the field - we definitely do, especially in the bigger offices, but it's nothing compared to what I read on this blog and some of the stories my Redmond buds tell me.
I still don't get why we don't move more jobs out to the field. We have the technology to make it work and we have the people with the desire and the skills. Microsoft is such a Redmond centric company that I don't think it will ever happen. (I know, it's *much* worse outside the US. The US field has it great compared to {insert subsidiary}). Make this one of your write-in comments on the MS Poll this year. Not that it will ever change, but it can't hurt.
Where can I find one of those jobs ...
Even though I'm mostly happy, I would consider leaving for some of the deals I've read about on this blog. I haven't looked hard, but I have casually looked, and I have only found a few deals that seem better than the one I have at Microsoft, and they weren't *that* much better. (Maybe the whole 67th percentile is working on people like me ... not a great deal, but good enough to keep us around?)
So if you're looking for top talent, remember that Microsoft has smart people based in most major cities around the world, so don't be shy to promote your company as an alternative.
I'm with her ...
I agree with Extreme Makeovers XBOX summary, and especially the part about the criticism not intended for those getting the job done, but rather for the exec leadership, Robbie and Steve specifically. The XBOX team has done a great job over the years, often despite your leadership. I believe in the model, but there is no other company in the world that wouldn't have pulled the plug by now (most out of necessity). $4B is real money, even to Microsoft. It's a deep hole, but it appears that we have stopped digging.
Dreaming ...
I talked to a guy today. He and a friend of his quit their jobs and started a small consulting business specializing in Office SharePoint Server. He has talked about starting his own company for years, and he finally bit the bullet. They have a handful of customers and a few other consultants working with them. They're making more money than before and having a blast.
How cool is i