Thursday, May 18, 2006

Microsoft's May 18th 2006 - a Big Turning Point (?)

Pre-Town Hall: Is May 18th a big turning point of a day? Is it my first big step into the sunset of blog obsolescence?

I'd love Microsoft to start its big internal defrag today, shrugging off the past of dysfunctional competitive reviews unattached to team success. I'd love Microsofties to stop focusing on succeeding by gaming the system and to start justly succeeding by producing great customer-focused results. I'd personally love to get back to just writing about making Microsoft smaller and efficient versus bemoaning trended 3.0s and The Curve and, oy, the injustice of it all.

I'd love our review and compensation system to be so straightforward and fair that it just fades into the background of everyday worklife.

There is risk. If the changes are as big as rumored in my building's hallways, there is great potential for a stunned backlash. You know, folks like to talk about change but don't like change when it happens. Employees also don't like having a bunch of unanswered questions. While it takes super leadership to rise up and push for the change, it takes extraordinary fantastic leadership to realize big change day-to-day from here forward. Each and everyone one of us, if we accept that the change is right, has to get behind it and ensure it's as good as it can be, and tweak and revise and adapt.

Fingers crossed...

Post-Town Hall:

It's a good start.

"Should have just done the towels and called it a day!" - Lisa Brummel, May 18th 2006.

You know, one moment of reflection: the circle is now complete. My second post to this blog was on July 6th, 2004. It was right after an impromptu employee meeting with Ballmer and Gates and as part of that, Mr. Ballmer justified the unfortunate recent benefit cuts, the main two points of ire being the towels and the ESPP revamp. Now, two years later, we're getting our towels back.

Has it always just been about the towels?

(Possible book title flashes through my mind.)

It's not like we're sweaty work-out animals always in need of a shower and fresh towel. No. What riled us was the bone-headed way the towel cut-back was handled, explained, and justified. It truly made us wonder just who are these people in charge and just who do they think they are leading? The towels became the symbol of poor leadership. That and the office-supply hide-and-seek.

Someone should send Ms. Brummel a golden towel award. I'd like my old ESPP back, too.

So, I'm going to skip over Ballmer's presentation along with the other presidents. I liked hearing from them and what's going on in the groups. I guess we'll next hear more at the Company Meeting. The star of the show, and I'd say of the entire company right now, was Lisa Brummel. If I had my old paper notebook, I'd be drawing little hearts around her name. Personally, I think she's a fantastic role model.

"I think some people will think it's fabulous, some people will think it's great, some people will be completely confused by it, and some people won't like it."

Peer-relative review ranking via fitting The Curve is gone. The trended 3.0 review score is gone. Your review rating is now an honest assessment based on what it is you should be doing and how well you did it. There are a lot of posts and comments here that, over time, are going to seem archaic. Good.

(Allow me to hang the disco ball, switch on the party lights, and put on some happy funk music...)

What's unclear and what time will reveal is that there still probably is Stack Ranking which feeds into a Compensation Curve. The poor manager with the review tool in front of them still has to figure out how to divvy up their merit increases. Either they make dictatorial decisions or stack ranks everyone. What's great, though, is they have the power to decide that, "Hey, everyone did great" and evenly spread out the budget vs. meeting a forced distribution.

Dixie's BBQ? Typhoon? Excellent! I will need that towel now that I have to work off all of those calories (or, wipe the sweat from my brow from a good dose of The Man sauce). The rest of the tools and the focusing on managers is a long-term investment sort-of-thing. We'll have to see how that goes and if there are issues, how they can be improved. I think there was a passive aggressive message to all managers: if you became a manager just to get promoted faster, we're going to find you and weed you out. It would have been nice for that to be clearer.

The one big thing missing out of all the rumors I heard was base-pay adjustment. The nicest biggest rumor was that we were going to be moving from 65 percentile based pay to 75 percentile based pay. That would have made incredible sense given the current competitive market and the salary compression people are dealing with. Salary compression hasn't been addressed at all. Maybe executive leadership is betting on another bubble burst?

Coming soon: we'll find out if we're on track for a cost-of-living-adjustment or not for the target merit budget.

And for you shareholders freaking out over the prospects of Microsoft blowing money on its employees: senior leadership made it clear that all of this was productivity based, and that they were expecting a great return on investment. Personally, I wouldn't have minded a mass-exodus from Microsoft of all the talented people because that indeed would have forced a Mini-Microsoft to be realized. These people are just doing their best to avoid that and to get excellent results in doing so.

So, going back to basics, does any of this get us closer to a Mini-Microsoft. Nope. A non-distracted Microsoft, perhaps, but some fundamental issues still remain with respect to us being so incredibly big that we still stumble over ourselves and suffer horrible, horrible waste in time and effort. I know Mr. Johnson is trying to make all the "<<fill in the blank>> Live" stuff seem like we're finally nimble and all that but it's one thing to throw the wonderful Sanaz and team up on the stage and exclaim, "Ooo, yeah, agility!" and another to make Windows, Office, Dynamics, and VS agile.

Lastly... what difference did this blog make? Would all of this had happened naturally once LisaB was in the house?

My feeling is that we were on our commute bike, but off the paved trail, going down a steep gravel path with potholes and horse apples (much like, say, the Tolt Pipeline trail). Some folks, rattling along the way, saw another smoother path and scooted over to that, leaving Microsoft. As of today, we're back on the smooth path. Ah! It's got some tight turns and we can't see what's around the corner, but it's a hell of a lot better.

"A non-toothache is a very pleasant thing." I like that saying. We're back to being able to focus on what's important, not being angst ridden over a busted review system. Yes, there's new angst in the interim but I have faith we can work through it, make good decisions, and network together to make the best decisions within this new model into best practices.

Looking back now: so many years... so many years people complained about trended review results, especially the dreaded trended 3.0, and you'd always hear, "There's nothing you can do. It's just how it is." So - eventually - I brought it up here as something I thought was fairly uncool, dysfunctional, and hampering our ability to get exceptional customer-focus, profit-making results let alone truly fire the people who needed to be moved on.

You don't need your 3.0 performers anymore to serve as a review foundation to prop up the rest of your team. Fire them!

And, well, the public complaining and dialogue that went on, along with potential candidates saying, "I don't want any of that crazy system!" added up. It got a very big ball rolling. The internal discussions of people getting a clear view into the smoky rooms of the stack rank and curve modeling helped a lot, too.

Thanks, Mr. Scoble, for your kind words (Scobleizer - Microsoft Geek Blogger » Missed big HR meeting (MyMicrosoft is now improved)).

Oh, and thanks Mini! These changes are due in no small part to you. Even if you don't get official props in the press releases.

Can one person change a huge company? Mini did. And we don't even know his name.

So, I'm going to make the claim that this blog, and all of those who participated in it and followed up on its contents, made a difference. If you agree, well, you can buy me a beer one day. And if you think there's a lot more work to do: the system is in play. All the cards have been thrown into the air. Get to work to make the new changes even better.


You: So what do you think? Good? bad? I'd love to hear some constructive thoughts. Maybe even just what questions you have at this point.


300 comments:

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Anonymous said...

An Anti-Union Guy's Call To Unionize Microsoft

Since 2000, I told my peers and my teammates my thoughts on Software as we entered the 21st century.

The convergence of a strong focus on math and science overseas, low cost/standard of living in those same countries, the projections for broadband access worldwide, cheap VOIP, and the high salaries in the US were going to lead to what I call Manufacturing 2.0.

Software development was becoming a commodity business. There were now bodies everywhere that could do the job, they were just as educated if not moreo, and these jobs could now be done anywhere.

At that time I recognized that we, as developers, were on a downward spiral from hotshots to the guys working the line at a manufacturing plant. While we wouldn't be replaced by robots (yet), we would be replaced by cheap labor in places like India and China.

Friedman's book, "The World Is Flat", made this observation in print several years later, and with interviews/case studies that provided factual backup to what at the time was my personal take on the industry.

At that time, I recognized that I needed to move to what Friedman refers to as a 'non-fungible' job, one that could not be as easily outsourced.

Architecture, public speaking, articles and books - becoming a brand vs. a number.

That's worked out pretty well for me, and at MS - while I may get paid less - I get that official stamp on my resume and validation by association that will pay off in the long term.

But along the way, I realized how much I love this company. While I may be in a great position personally, I see the potential for the larger group, the people who made this company great to either be replaced by lower cost labor overseas, be replaced by H1-B labor brought here from overseas, or leaving because they can't get paid the fair industry wage.

The reality is - unless you're a Don Box, a Kim Cameron, or a Anders - Billg and Steveb probably have no idea who you are or what you do. If your manager screws you over for political or personal reasons, and you leave - they likely have no idea the value that's leaving the company. As an individual, you have an inaudible voice amongst over 50,000 others.

Everyone is afraid to say something, to stand up as individuals. We know this because this blog exists. We know this because noone raised their hands when Steveb asked if we used Google.

If you're like me, you've never been a big fan of unions. I wasn't until this morning.

But thinking about the situation over breakfast, I came to the conclusion that as a company, where we are today is where manufacturing was ages ago when unions came to be. We do a good job, we're expected to work sweatshop hours, and we're just asking to be fairly compensated and be able to spend some time with our families.

As these opportunities to outsource continue, the need to speak as a single voice and collectively bargain with upper management is going to become critical to our being able to focus on building great software, have a family life, and build a better Microsoft.

Base pay is not going up and was noticably absent in the myMicrosoft discussions. Why was that? And while our pay is flat, the company is beefing up outsourcing. If there was a need and a time to unionize, that time is now. We need to unionize before the outsourcing can replace us wholesale.

Mini - I encourage you now to add a new focus to your site, a focus on unionization. You've proven yourself as the outlet of masses in anonymity, why not take the bold step from behind the curtain and bring about something more meaningful than towels. Why not take the next step and bring about meaningful, long term change.

Unionize Microsoft.

Anonymous said...

Is the curve gone? Not really, but the part of the curve you can realistically get rid of is.

People's performance will be graded regardless of the work of your peers, while people's performance will be rewarded based on contribution to your peers.

What this does do is get rid of what I call the 'Brave New World' culture at Microsoft. Everyone wants to be an Alpha(4.0), noone wants to be a Beta (3.5). You especially don't want to be a Gamma (3.0). The worst thing you can do is label an Alpha as a Beta, because if they're an Alpha, they're going to be less productive or leave. In theory, the Brave New World model goes away with what was proposed.

In regards to compensation, you'll never escape some kind of curve - we're a capitalistic society not a communist one. You need to reward top performers, because - quite frankly - if you don't, they'll also leave or become less productive. Why do 4.5 work, when the compensation is the same as 4.0 work?

I think the key issue,however, is the one that was ignored, base pay.

Rather than look at a bonus as deferred, expected income - why not just pay us better and make a bonus just that - a bonus.

I love working at this company, but the reality is alot of us who came from other companies or the field took a pay *cut* to come here.

For some, this was because we were *the* shop, and this was one of the only places you could work with the smartest people on the planet. For others, this was because there was a shot at becoming a millionaire.

Neither of those rationale are still valid. Google - while I'm not a believer they do or will do anything but search well - are assembling quite the brain trust.

There's potential to see a brain drain to them and other companies like we saw during the bubble. If Microsoft does well, many may be persuaded to come back - but how much have you lost in the interim, and lost at a time when you're in an 'arms race' with Google?

Pay me more, pay me enough that I don't need to count on the bonus to justify staying.

Pay me what I'm worth, so my spouse gives me less grief about the long hours I put in for my salary which is 66% of the industry.

Pay me appropriately, and let me focus on my job and not the price of the stock awards that I need to liquidate to make enough money to justify staying at lower base pay.

Pay me fairly, so I can focus on doing my job and not competing with my teammates like dogs fighting for scraps at the masters table.

Forget towels and BBQ - fix the base pay problem and you will have not just higher salaries, but highe productivity and higher satisfaction.

Anonymous said...

Bread and circuses!

er..

BBQ and towels!

We say we're the smartest people in the world, are we all buying this BS?

Personally, I'm a realist. Let's see what happens at (a) review time and (b) the partner payout.

Anonymous said...

We have about 20% 2.5 and 3.0 folks in the company. I think t is a grave mistake to get rid of LRA. I would think most whiny idiots here have a LRA under 3.2.

Why not simply get rid of these 20% of lazy or low IQ idiots and raise the base pay from the saving. This is simple to do. I bet more whiners in this blog will be gone.

There are too many self-centered, ego-centric political animals complaining about this and that. MS is a great company if we let go these poisonous political NATO folks. NATO here refers to no action and talk only people who think they should be MS partners.

These habitual 3.0s are venting their angers here. Stop it.

Anonymous said...

"You all might think this blog and employee pressure was the reason. Maybe it was. But executive leadership sure doesn't. Ergo, no props for Mini."

Hey sparky, if executive leadership had any clue to begin with, there wouldn't have been a problem in the first place. All this shows is how out of touch and insincere Raikes and the rest of the old guard are.

Anonymous said...

What would you think if one day you see in the news that the Boeing Engineering Employees Union settle a working contract with Boeing where Mgmt agreed to:
- towels back
- staples in all building
- pick up dry cleaner service
- no base pay increase
Right. Pathetic. You guys clearly had no one negotiating for you. No wonder why the five execs in front of you were laughing so hard(..all the way to the bank)
and you're supposed to be the brightest minds! give me a break.

Anonymous said...

Microsoft is not in good health.

Vista is going to be the new Windows ME, except this time there will be no "real" operating system waiting in the wings.

Windows NT is at the end of its useful life, and I expect that Service Pack 1 will not make a dent in the massive app-incompatibility problem.

Office12 will see significant customer resistance due to its new UI and sky-high employee retraining costs.

The two money making franchises are dying, and no replacement is to be seen.

Microsoft is full of great engineers, but it takes more than raw enthusiasm and towels to keep a product alive.

Anonymous said...

"I'd like my old ESPP back, too."!
I like that. I don't care much about the "new" evaluation system. Old ESPP was what drove me and thousands of employees like me want the MSFT stock to rise, as this was a good way to get real money out of it. Ever since MS removed that MSFT has been flat at best. Obviously, none of us care about the stock anymore... Indifference is what could kill the company.

Anonymous said...

I see a lot of talk about "what I'm not getting" or "let's give it six more months and see" etc. What I don't see is any talk about what's going to change corporately or what you're going to do differently on a personal basis to EARN these increased rewards? Implicit seems to be that you just "deserve" them. Also implicit seems to be an attitude of who cares where the money comes from to pay for it? Taking away towels may have seemed petty to some and sounds like it was poorly handled, but it was part of a $1B expense reduction in a year when, importantly, the company was facing its slowest growth rate since going public. Is there a responsible company on the planet who wouldn't have taken measures to reduce expenses in that situation? Did the company keep hiring more of you when the easier route would have been to RIF existing staff? BTW, that $1B on 10B shares and a 20 multiple equates to about $2/share - so it wasn't trivial. So now, from the looks of it, you've gotten a bunch of that $1B back (the 15% increase in grants alone could be $300-500M/yr by my quick calc). Now what? There's no free lunch. Here's your revenue growth vs your income growth:

Key Ratios

Do you see an obvious problem here beyond the red line being anemic? That gold line is meant to track with it. It hasn't because in addition to blowing tens of billions of dollars in emerging bets that are still collectively unprofitable [not to mention increasingly suspect] and the myriad of strategic/tactical execution failures in the core businesses, there are way more of you than there used to be. If the company continues to make losing bets, ignore the strategic/tactical failures, keeps hiring more of you and keeps giving you more rewards w/o getting a commensurate return, what happens? I'll tell you: something has to give and as it has for 5 years now, it will be the stock price. How long do you think [general] shareholders are going to go on actually losing money every year on their MSFT investment? Or, given the attitude of entitlement expressed by too many of you, do you just figure "who gives a shit about shareholders just so long as I get mine?"? Here's a wake up call: shareholders own the company - so maybe they give a shit. And I'm not talking Gates/Ballmer or employee holders, but external shareholders who control 80% of the company. When all the bullshit is removed, what you "deserve" is based on what bottom line results you "deliver" for them and as the chart above shows (and the stock performance confirms), you're not doing a very good job at all.

Anonymous said...

Like any job role in the world, HR is about making the least amount of effort look the best.

MS HR is no different.

Can you imagine the number of meetings and negotiations that went into the decisions to return free towels and keep the cafeteria later? Those people make millions of dollars making the kind of decisions the average joe makes in his household over dinner after a long day at work. "Yah, let's just keep the computer on 24/7 and do laundry whenever you need to; no need to wait for the weekend for it to pile up."

The new non-curve performance rating might be good for a one-time morale boost, but rank and file have actually been screwed in the transparency process because now one doesn't know how that new 3.0 results a 0% merit increase and 4% bonus. Meanwhile, the other 3.0 in your group might get a 10% merit increase and 20% bonus. The curve is still there except now it's invisible to you!

I have to wonder how a consistent 3.0 performer is going to feel after a few years of being compensated in the lower half of the 3.0 curve - with no immediate ability to compare his compensation to other 3.0s in his group - while his 3.0 peers are buying new houses and driving new cars to work.

Anonymous said...

Scoble and others wonder why there's continued negativity. It boils down to 2 reason:

1 - Trust is hard-won and pretty fragile. This is something we must keep in mind with regards to our CUSTOMERS and the QUALITY of our PRODUCTS. But in this case, Sr. leadership and HR have seriously breached employee trust, so it will be a long road coming back.

2 - The announcements included SOME change and SOME smoke-and-mirrors. There is much truth to the claims that really nothing has changed in the review model and comp distribution. It's not ALL true, but I believe that there has largely been no change at all. I'll find out as they give Leads more info, but I am not betting on much being different.

There has certainly been some change with regards to the added services and "quality of workplace" additions. Fine, but those were not really dealmakers/breakers anyway. For example, how many of us actually have a lot of dry cleaning to do? Most of us wear cotton washables it seems like.

And PLEASE stop harping about the towels either to stick up for them as symbols or ragging on them as literal benefits. Not very intersting either way now that both those points have been made a million times.

Anonymous said...

The biggest problem MSFT faces right now is not towels, stocks, or bottled water. It is the near complete disconnect of Dev with PSS and our customers.

When I say Dev, I am not just talking about the empty suit PM's - I also mean the myopic SDE's. When I say Dev, I do not just mean Vista Core - I'm also pointing at you, WinSE. When I say Dev, I do not just mean Windows - the creators and maintainers of SMS, MOM, Virtual Server, ISA, etc. are in my sights as well.

Allowing customers and FTE's in PSS/PFE/MCS to evaluate your offerings is not useful when you withhold it until it's nearly "feature complete" and you are totally unwilling to use the feedback - the feedback of experienced engineers that have been integrating, debugging, and un-doing the damage of MS programming missteps years before before most SDE's were out of grammar school. Not understanding how your components are used in the real world or how they interoperate with complex systems is why you fail endlessly to close pain points. Repeatedly shooting down bugs because "it's always been that way" instead of taking the opportunity to correct mistakes is why many customers use our products only begrudgingly (this is why WinSE needs to be RIF'ed before all - my favorite is when a component owner who has never worked on anything else in his short professional life tells you how easy it is to fix his crummy app based on its random symptoms - then refuses the offer to break a colleagues machine the same way and see how long it takes a novice to figure out.).

Dev, until you realize that outside of a few square miles of Redmond, the people that deploy, use, and fix your products are an asset you need to utilize, we will continue to struggle. You have real, honest competitor products out there for the first time in 12 years - if you continue to ignore the real-world experts, customers will find them.

Anonymous said...

It's sad that the company heard it's employees and made a number of key steps to fix things, and on this blog we get lots of comments like:

"Oh yeah?? Well this doesn't fix the middle management/cronyism/fiefdom problem!"

Give me a break. Like Lisa was going to come up with a plan in 6 months to solve ALL the problems at the company.

Look, these changes set the stage to solve a number of other important issues, such as holding managers accountable and getting rid of poor performers. If you didn't get the subtext that they're going to put the hammer down on the middle managers who aren't excellent, you weren't paying attention.

I can't WAIT for the big RIF. It's going to be glorious. Mini, you should be thrilled.

So yeah, these changes were only a first step, but a very good one, and a necessary one ahead of addressing some of the other issues.

Think of it this way: Microsoft has a number of festering boils. Lisa just sharpened the scalpel.

Anonymous said...

I have to wonder how a consistent 3.0 performer is going to feel after a few years of being compensated in the lower half of the 3.0 curve - with no immediate ability to compare his compensation to other 3.0s in his group - while his 3.0 peers are buying new houses and driving new cars to work.


You have got to be kidding me. What I have to wonder is why we would even have "consistent 3.0 performers" to wallow in angst to begin with.

One can only hope that the rumored RIF will get rid of the "consistent 3.0 performers." At least from the dev teams.

Anonymous said...

As a long term employee I do not see any big change here. The company suffers from the excesses of its culture set by sr.executive management....arrogance, superiority, greed, hyper-competitiveness, and distrust. As long as the same executive managers are there, it will be the same just the process in which these attributes permeate the company will change. Steve Ballmer loved the stack rank system since it resembled Jack Welch's attitude toward the bottom rung. He was so enamored with Welch. (what a virtuous and sincere man Jack is!) So much for original thought from Steve. The fact that it takes so many years before they even realize they have problems and only when it coalesces on a public blog should make your mad. All of them are arrogant starting from their superior gene pool, their Stanford/Harvard education and their first job becoming a monopoly making them rich beyond their imagination. Where is the defeat, the pain, the deprivation that gives birth to wisdom? They simply have not experienced it; this fact plays out on how they mismanage a public company....eg steve ballmer throwing chairs and screaming when threatened by an employee leaving..what an image for a CEO? The fact he remains in that job for a public company is ridiculous.

Anonymous said...

Also implicit seems to be an attitude of who cares where the money comes from to pay for it? Taking away towels may have seemed petty to some and sounds like it was poorly handled, but it was part of a $1B expense reduction in a year when, importantly, the company was facing its slowest growth rate since going public.

--

Slashing the number of partners by 25-35% would have been a better approach.

Anonymous said...

Interesting interview in Barron's with Joe Rosenberg, an adviser to
the Tisch family for many years.

What about Microsoft?

A few weeks ago, Microsoft announced that it was going to increase spending in its next fiscal year by $2.4 billion above what analysts thought. The stock fell 15%, and I think a lot of the decline resulted from frustration among analysts who have lived through so many years of sideways movement. That $2.4 billion is equal to about two months of free cash flow, and the market knocked $40 billion off the value of the company. Now that's insane, and it offers a wonderful opportunity for people who want to buy the stock.

What should Bill Gates and CEO Ballmer be doing?

Management's response should have been: "Great! Wall Street is
insane. Since we have $35 billion of cash on our balance sheet and
no debt, why don't we announce an immediate tender offer for two
billion shares of stock." That would cost about $50 billion.

That's almost 20% of the stock.

If Microsoft believes that the extra spending will result in better earnings down the road, they should be buying back a lot of stock. I think Steve Ballmer spends too much of his time on the operational side and not enough time on the financial side. He unfortunately shuts himself off from the financial community. He only meets with the financial community once a year. Since I can't tell him in a private forum, I might as well tell him in a public forum. If
Microsoft reduced its share count by 20%, it still wouldn't be a
terribly leveraged company. Now having said that, even if Microsoft doesn't buy back a lot of stock, the shares are still attractive because if you project forward, Microsoft probably sells at 10 times its free cash flow in 2011.

At 23, Microsoft is at 16 times earnings.


That's about right. Microsoft is expected to earn about $1.40 per
share for the fiscal year ending in June of '07. When you look at
that multiple, you should really take out the $3 to $4 a share of
cash. However, if do that, you should subtract from earnings the 5% interest rate on that cash.

Microsoft also owns a hundred million shares of Comcast [CMCSA].
It's a wonderful company, and we own it. But the Comcast investment
isn't serving any corporate purpose I'm aware of.

I just read on Bloomberg that Microsoft is adding employee perks
like a free towel service and increasing its employee stock awards by 15% to help raise morale that has been depressed by the weak share price. This is another example of how Ballmer doesn't
understand the financial markets. What he should do is announce an
immediate tender for the stock, which would help both employee
shareholders and outside investors. Ballmer is hurting employees because the added dilution caused by these awards is depressing the stock. If this continues, the employees are going to need those towels to cry into.

Anonymous said...

Tecnically Raikes was right (though his tearing up the article was a classic case of ballmeresque stupidity.) The title of the article was wrong. Microsoft doesn't have trouble hanging onto employees. People aren't dumb. If they can collect a good paycheck and benefits they will come back day after day. Its about respect and its correlation to delivering products. Today, no matter how officious and busy Microsofties appear (they may be here 60 hours a week, they may appear to be giving 150%) there is a massive work slowdown at Microsoft. Its not a slowdown in industrial labor terms but a personal policy of not engaging on important projects at critical times (EVEN THOUGH YOU APPEAR TO BE.) That's what the meeting was about Thursday. Its about getting respect worked back into the quotient. Its about breaking the stalemate that has developed due to lack of respect. Instead of giving lip service to loving their jobs and working in a great environment, employees want that to become an ACUALITY. As was mentioned in the meeting, this is a working draft, there will be more changes. Believe it or not this was a concession on the part of management. There are some huge competitive challenges on the horizon. Management wants all troops fully engaged and fully committed. Employee morale has hit them like a punch in the face over the last two years. They know it has to be fixed.

Anonymous said...

So "Microsophist" wanted to see more discussion about growing the company value. This has everything to do with the agility of the company. You grow company value by growing revenue. You grow revenue by reducing expenses (fire middle managers), growing market share (for us that means new businesses) and by actually getting money. Fact of the matter is that there is money EVERYWHERE in the software market, but we are just not agile enough to be able to quickly go after it. And because our business model is not agile, we really only know how to make money in one way, when there are so many other ways to make money. We just refuse to do it, and if we wanted to, process is bogging us down.

Anonymous said...

Windows NT is at the end of its useful life, and I expect that Service Pack 1 will not make a dent in the massive app-incompatibility problem.

How many apps are designed for Windows and work flawlessly?

How many apps are designed for other OS's and work flawlessly?

In short, what app incompatibility problem? EVERY OS has app compat issues found DURING development. Vista is no different. Those apps are patched, or there are workarounds added to help make critical apps work. Will EVERY app work? No, and you shouldn't want it to. The more garbage that gets added in to make busted apps work is more legacy baggage that has to be maintained for the next OS.

Office12 will see significant customer resistance due to its new UI and sky-high employee retraining costs.

You clearly haven't used it. The new UI is different, but I think it's fantastic. And I haven't talked to any peers internally who think otherwise (and we are definitely not drinking the Office koolaid). There won't need to be any "retraining" really...there might be a few extra minutes spent finding where all of your old favorite features were, but that's it. It's very easy to use.

Anonymous said...

I see very few people asking to be a multi-millionaire. Many people are concerned that with their current salaries that they cannot afford a decent house close to their office. Sure, it's MUCH worse in SVC, but it's bad in Redmond too.

This is so true. Looking at the past 2-3 years it has became increasanly more difficult to just pay all the bills. Despite the fact that I am a senior SDE and have had a better than average performance (mostly 4.0s) and consistently put 50+ hours a week my compensation is still lagging behind the growing costs and my debt is steadily increasing to the point when it starts to really depressing me.
Now with the recent MSFT stock drop I've lost $20K+ in options and stock awards value. That may sound like small amount for some peope postng here but for me it still means a lot. I was gong to use that money to pay down some debt and go on vacation with my family. And now when that is gone my morale has dropped down and I just can't force myself to focus on my job. I am sure there are a lot employees that feel the same pain.

Anonymous said...

Okay Mini, this is the right time to go on a 2 month blog break. Let us all get to doing some work now that the towels are back for the masses.

Like others said, thanks for providing the vehicle for the message. The ball is in my and others court now, and we will continue to deliver.

Anonymous said...

How much time does Ballmer have before there's a significant public challenge to the board of directors by some serious heavyweight investors? Right now you see funds reducing their MSFT positions but at some point won't a public opposition leader emerge -- maybe a top value fund manager -- and start demanding action, start organizing around a slate of alternate board members, etc. Disney and Time Warner went through it -- when is our Roy Disney or our Carl Icahn going to appear?

Anonymous said...

"Unionize Microsoft."

Good plan. That ought to destroy the remainder of MSFT's market cap even faster than 5 more years of Steve as CEO.

Anonymous said...

"Unfortunately, these changes don't address the greater problem with MSFT: stagnant market value."

Stagnant market value is not the problem. It's the logical result of the problems. Big difference.

Anonymous said...

Ode to Towels

Many people have expressed utter confusion on why the towels became a lightening rod issue.

A few years ago, like many people, I was looking for ways to combine time-efficient exercise with alternative commuting methods (to use less gas, not occupy a parking space, etc.). I started bicycling to work. I discovered that Microsoft had locker rooms with towel services. Fantastic! What a progressive, forward-thinking company. Yet another cool thing about working here.

Then, one day, I get to the locker room and see a sign: Effective July 1st, towel service will be discontinued. Hm, that's unfortunate. Well, I guess I can bring my own towel, but it'll have to hang in my office to dry.

We find out that it's part of the $1B cost cut. Okay, great! That'll drive down expenses, which will drive profit which will drive the stock price, so I'll be able to buy lots of towels with the stock price increase. Oh wait, the stock is flat....

Just how much does the towel service cost? Somewhere between 100-200K? At most, 0.02% of the $1B cost cut? The reaction to the loss of towel services came from the fact that it was so cheap relative to the other expenses. If you were to ask the people who used the towels whether they would have shared the cost, most would have said yes. But we weren't asked so we didn't have the option.

Use the towels, now that we have them back. Hey the Pro Club is a fantastic benefit. But sometimes you just want to jog around campus for a short break and to clear your head. It's a lot less time away from the office, but it's great for your physical and mental health.

Anonymous said...

Report card

Let's grade the changes against the goals they were aimed at achieving:

Attract the best and brightest to Microsoft

My grade: D. There's very little here that will tip the scale in favor of Microsoft for a candidate who has competitive offers.

Improve 'the deal' for existing MS employees

My grade: C. Some of the conveniences will help with work-life balance, and some of the discounts will result in a net-positive for the people who use them. But the message was clear: the vast majority of you will not be financially better off after the change compared to before.

Incent collaboration, team-building, making each other great

My grade: D-. Absolute performance vs. relative performance review is a great step, don't get me wrong. But the curve does still exist, which means that calibration still happens and performance envaluation is likely to stay as subjective as before. Team-based rewards will need to happen in the next round of changes.

Provide real incentive to deliver results

My grade: F. You've all said it. A few more shares of stock aren't going to make you bust your butt all that much more. Profit-sharing could be an incentive (after all, profits *are* increasing), but Steve has consistently resisted offering profit-sharing to anyone but the partner pool.

Remain fiscally responsible

My grade: A- (grading the changes only). The changes effectively add their value without hitting too much on the bottom line. But we all agree that (at least in parts of the company) there are too many people and too many layers, and that redistributing people to jobs and/or RIFfing would actually be a good thing now.

And now for something completely different: the field

I loved my time in the field. In the field you get hard requirements, objective measurements, quick feedback, and COMMISSION (i.e. incentive).

Anyway, I have a question for you field people. How many of you would be willing to host a product-team buddy on a customer call? Many of the product people have never visited a customer. You should. You'll inevitably say "Oh, so THAT's what's important to customers!" You'll take that back and build better products. It's win-win.

Anonymous said...

We have about 20% 2.5 and 3.0 folks in the company. I think t is a grave mistake to get rid of LRA. I would think most whiny idiots here have a LRA under 3.2.

Why not simply get rid of these 20% of lazy or low IQ idiots and raise the base pay from the saving. This is simple to do. I bet more whiners in this blog will be gone.

There are too many self-centered, ego-centric political animals complaining about this and that. MS is a great company if we let go these poisonous political NATO folks. NATO here refers to no action and talk only people who think they should be MS partners.

These habitual 3.0s are venting their angers here. Stop it.


Why is SteveB only firing 6.5% of the workforce if 20% of the company consists of low IQ idiots?

The hiring process at Microsoft must be really broken if 20% of the employees are low IQ idiots.

How many of your co-workers do you consider to be low IQ idiots?

Why would a company continue to employ workers who are low IQ idiots?

Wow! What kind of people would have to be in charge if all that were true?

Anonymous said...

"We have about 20% 2.5 and 3.0 folks in the company. I think t is a grave mistake to get rid of LRA. I would think most whiny idiots here have a LRA under 3.2."

3.68 here as of the LRA retirement, level 63, been at msft for 12 years. (started as an "old level system" level 8 in PSS at a sub, back when we did TWO review scores a year)

Don't dismiss people here. This blog has become an extremely important feedback tool for management. Sure some of the comments are a bit lame, but in general I learn more here about the "pulse of the company rank and file" than I do at work itself. Thanks mini.

Anonymous said...

"The writing on the wall is plain. Delight your customers with innovative products and service, and you will be rewarded."

Agree. Somewhere along the line the entire company developed a sense of entitlement. Gates/Ballmer spend their time jealously smak talking GOOG instead of focusing on the tough changes needed to drive MS's results; Senior VPs who've overseen some of the biggest screwups in company history, line up for their $20M/yr+ bonuses that would make many F100 CEO's envious and walk around like they actually deserve them; Product groups act surprised when the same marginal upgrade (only now delayed 3-5 years) meets continually declining customer adoption or even - gasp - movement to a competitor with a cheaper/better alternative; Employees who've received tens of billions collectively in extra incentives since the Y2K bust, hold their hands out for more despite demonstrably declining marginal productivity; Massively unprofitable bets are made in virtually every industry segment after someone else does the hard work to prove out their profitability - just because MSFT figures it deserves its slice; Simlarly, application partners who work their asses off to create/develop/secure a profitable niche, find themselves eventually competing against MSFT once those profit streams become sufficiently attractive; Shares are massively diluted because MSFT's appetite to do whatever it wants and hire whoever it wants hasn't diminished even though its growth and future propects clearly have; Shareholders are treated to one of the worst 3 year performances of any large cap tech company and then management scratches their heads when those investors finally start bailing en masse, etc. etc. etc.

MSFT is like a former star basketball player who's still under a longterm contract for a ridiculous amount of money, but got busted on a drug rap several years ago, has had several relapses, never really got his game back (though the promise is still there albeit getting fainter), yet is bad-mouthing other current league stars and asking for even more pay while simultaneously wondering why he ain't gettin' no respect.

Anonymous said...

I think this change is a good move in the right direction. As a manager with a team of high perfromers I will not be forced to screw someone based on arbitrary trending requirements. However, the goodies are still limited and rewarding top perfromers will still force a stack of some kind. There's just no way around that. The thing that did annoy me is that on the morning of the town-hall meeting I and every other grunt manager get email from Lisa telling us that it is our job to accuratly message these changes to our directs. That's great, except the ONLY info I got was that which was delivered during the meeting. My directs know as much as I do. This is a clear sign that the "old" MSFT is alive and kicking.

Anonymous said...

"Is there a responsible company on the planet who wouldn't have taken measures to reduce expenses in that situation? "

So, I think to voice what a lot of people are thinking as employees: Microsoft has been pummeled in the market guidance based wise exactly twice in history. In one case, Microsoft made a shitload of money and analysts were expecting "an incredible shitload of money". In the second case, Microsoft announced we we made amazing money, and would be investing a "shitload of money" in future bets. And analysts were expecting Microsoft to say "We're investing a normal amount of money in future bets"

The "any reasonable company would have taken the towels away during the dark times" argument is infuriating to me. Because Microsoft is simply the greatest money making concern in the history of the planet earth and it shows NO SIGN of stopping any time soon.

Let's look at the history: The stock last hit its high in december of 1999 at a stock split adjusted price of $59.59. The bubble crashed starting in April of 2000.

Since that time, Microsoft has continually and consistantly increased its revenues and profits year over year. As a reward, the market, our investors, are trading us at $23.50. Even if you argue we were over priced in 1999, its been nothing but an ever increasing amount of money, non stop, no pauses, since then. yet our stock is trading at the exact same price it traded at, stock adjusted, in 2002.

And yet, employees have not blinked, we've in many cases doubled our efforts. A great example of this is Windows XP SP2, a cost based FREE upgrade to Windows to increase security. (I know, I know, we needed to do it, I'm not arguing that customers didnt deserve SP2 for free, I'm saying it was EMPLOYEES that have busted their ass in the past 7 years since our stock high, as a generalization)

But the market has not rewarded the fact that Microsoft has been an ever increasing earnings machine for 7 years, through the horrible dark times of 2000-early 2003. And in that time, Microsoft as a company began to severely curtail employee bonuses and stock benefits and normal benefits *despite* the fact that even during the economic collapse of the NASDAQ and the purging of thousands of fly by night .com bubble companies, and the losses of much larger companies that didnt plan as well, Microsoft employees never paused, never wavered, never stopped for one second in making sure we did the ultimate to make the company successful.

It's easy to sit there and say we don't deserve our compensation. It's easy to say "you buncha whiners, you should try working at Boeing for a while". Remember what I said, it's undisputed by anyone: Microsoft is the greatest money making machine in the *HISTORY OF THE EARTH*. It is so, not because of monopoly or business practices, it is so because employees have worked to make it so.

We deseerve our slice of the pie. The company has enough money, CASH ON HAND, to pay every single employee a cash bonus of $523,000. (34 billion divided by 65k)

I'm not saying that should be done. I'm saying that with that STAGGERINGLY HUGE amount of cash generation, There has to be some way to make employees AND shareholders get the rewards. This program we have just announced is merely one way to do that. Non microsoft employees can bitch all you want but hey, we have open head count, if you want to join the greatest money making engine on earth just apply. Otherwise, stop telling me I'm whining when suddenly despite the fact that we emereged from the worst economic and stock market crash since the 1930's completely unscathed profit wise, they take away a simple benefit like SERIOUSLY JUST BEING ABLE TO GET A DAMN STAPLER. Thats not reasonable. It's criminal, it's idiotic. It's cost cutting gone insanely awry.

It wasnt shareholders who, even through the darkest of technology market dark times, still made MSFT pull through with ever increasing *record breaking* profits. Hell, remember that the stock market is made up of investors. If anything, our investors HAVE PUNISHED US.

And if you do stupid retarded things like take away services and (seriously) OFFICE SUPPLIES as cost cutting measures than the company has NO RIGHT when Google starts poaching and offering free chef cooked breakfast, lunch, and dinner, as a base benefit.

Anonymous said...

In the 2 years the average level for a new hire in Microsoft was bumped up at least 1 level (2 levels for some disciplines). However the quality of people hired diminished and bar getting lower and lower these days. Now this means at lease two things: 1. the level increase you worked for in the past 2 years has been completely offset by the rise in the new hire level; 2. Microsoft cannot attract new talent on vision and potential anymore and it has to rely more and more on hard cash - however its a known fact that most of the really good people are motivated by vision and need to impact the world. With these in mind the current changes do nothing to fix Microsoft's long term problems.

Anonymous said...

I'm not saying that should be done. I'm saying that with that STAGGERINGLY HUGE amount of cash generation, There has to be some way to make employees AND shareholders get the rewards.

-
It is a mistake not to offer the greater stock benefit to partners. It is their vision and strategy that has taken MSFT where it is. It is not the employees.

Anonymous said...

How much time does Ballmer have before there's a significant public challenge to the board of directors by some serious heavyweight investors?

At this point, in the historical CEO quality ranking, Ballmer is one notch above Sunbeam's Chainsaw Al Dunlap. That he tried to be like Jack Welch and failed has cost him some points.

Anonymous said...

The more things change the more they stay the same. Beyond the towels and new food court vendors, have things really changed? I think not.

Compensation - As many pointed out there wasn't anything in Lisa's plan to address this.

Stack Rank - Those of you who believe it's gone, give me a break. OK, so you change the number, but that's the small part of the issue. The big part is how bonus and stock is distributed (a la the Review Model Tool). Given the type of management we have in place and given the changes here I'm betting that most will stick with their stack ranging and life boat drills. Only time will tell on this one, but it really depends on how much the VPs/GMs will delegate down the flexibility they have been given.

Performance based rewards? - The big issue that wasn't addressed is how the bonus/stock will be divided across the VPs/GMs. There is still no concept of performance accountability that rewards great teams and holds back from poorly performing ones.

15% increase in stock - So, the top performers will be rewarded with more stock. Great. At this point in time show me folks who will want to go long with their stock awards. Selling short those grants, which still take 5 years to vest, is about the only real option.

A Bush Tax Cut as the model? - Remember the line that Lisa said about the standard stock grant? Well the median point is still the same with the bulk of the new stock going to our top performers. Let's see how much filters down through the management chain as it's passed President to VP to GM to PUM. It's for the top performers, which is a good thing, but in reality this means that the average employee won't see much of a change.

Tarnished Gold Stars - It's good to see more bonus for top performers, but that should only be a start. Let's look back to Win2K and XP. How many of those Gold Start stock grants are under water :-). My point here is that the hard work of the past still is not rewarded other than a nice pat on the back. Kinds of warms my heart thinking about how much we're appreciated.

Anyway, time will tell, but from my point of view, these changes are superficial and don't nearly go far enough.

Anonymous said...

I was researching MSFT’s SEC filings and I have come to the conclusion that the stock price is being intentionally manipulated to help MSFT’s bottom line. As long as the stock price remains below $28.73 by December 2006, the company will not have to book the $2.21 billion in stock option expense on the shares that were sold to JPMorgan.

JPMorgan most likely sold the shares to other Wall Street firms. Now you know why Wall Street is going crazy about the stock price and they have finally started to speak up. The $2.21 billion in stock option expense was already booked by MSFT in FY2004. How will MSFT pay for the $2.3 billion in building Moogle. Hhhhhhhmmmm, by moving the $2.21 billion the company booked in 2004 for the stock option expense. If the stock options fall out of the money, the company can then reuse the money and it will not affect this year’s numbers.

These guys are smart. Is it legal? Perhaps! Is it ethical? Maybe! Whoever said BillG and SteveB made their fortunes by being ethical.

In addition, on September 30, 2003, there were 1.48 billion vested and unvested options were outstanding. On March 31, 2006 there was 556 million unvested options compared to 832 million on March 31, 2005.

I think the company is working hard to lower the stock option expense since the accounting rules have changed. Also, by holding down the share price, the new options being handed out will be more attractive and an incentive for people to stay. I have listed below my supporting documentation below. I welcome all suggestions, corrections or additions.

http://www.microsoft.com/msft/earnings/FY04/earn_rel_q2_04.mspx

In the second quarter of fiscal 2004, we completed an employee stock option transfer program with JPMorgan. ….A total of 344.6 million (55%) of the 621.4 million eligible options were tendered. Under the terms of the program, JPMorgan paid Microsoft $382 million for the transferred options. Microsoft made an initial payment of $219 million to participating employees for the transferred options, with a remaining portion to be paid in one or more payments that are subject to participating employees’ continued employment over the next two or three years. The options that were transferred to JPMorgan resulted in a stock based compensation expense of $2.21 billion ($1.48 billion after-tax or $0.14 per diluted share).

At December 31, 2003, 1.08 billion stock options were outstanding, compared to 10.79 billion common shares outstanding. The stock option figure includes vested and unvested employee stock options and includes the options transferred to JPMorgan.

http://www.microsoft.com/msft/download/FY06/MSFT_3Q2006_10Q.doc

As of March 31, 2006, 240 million options transferred to JPMorgan remained outstanding and are excluded from the amount noted as options outstanding in the table above. These options have strike prices ranging from $28.73 to $89.58 per share and have expiration dates extending through December 2006. Included in the options outstanding balance are approximately four million options that prices presented. These options have an exercise price range of $0 to $170.87 and a weighted average exercise prices presented. These options have an exercise price range of $0 to $170.87 and a weighted average exercise price of $12.27.

http://www.microsoft.com/msft/earnings/FY04/earn_rel_q1_04.mspx

At September 30, 2003, 1.48 billion vested and unvested options were outstanding, compared to 10.81 billion common shares outstanding.

http://www.microsoft.com/msft/download/FY06/MSFT_3Q2006_10Q.doc

The 556 million in unvested options is listed in a table on page 6.

Anonymous said...

I'm the partner who has been posting and I wanted to provide my reaction to the announcements. I would also like clarify that I am not the person who posted the SPSA goals (can't confirm or deny if they are accurate) - somewhere along the line both of us got mixed up.

Now my comments …

First, Kudos to Lisa. She came across a passionate, energetic person trying very hard to fix a deteriorating situation. She is a go getter and I knowing the internal torpor, I can imagine what it took for her to extract these concessions. However, it does not go far enough so don't declare victory yet but press on.

The upfront strategy talk was long winded and boring. We seem to lack an overarching mission or vision regarding why we exist or what our future is. Like a dog who hasn't yet found a bone that it doesn't like, our mission is making money whereever we can and however we can - this approach is disaster for a company the size of ours because it means we'll be constantly reorging, readjusting to the soup du jour. In the early years of MS, we had a clear mission and we all marched towards it - "PC on every desk …". Steve made a big point of Software and Services. Then what is the XBOX business about? Why are we then in the hardware (console) business? That's a loaded q - I understand why but I don't believe the vast majority of the company gets why. The point is we had a great opportunity to provide clarity and focus but we missed it.

I buy the services story but there are a lot of big numbers being tossed around without clear articulation regarding how much of that we can tap and exactly what we are going to do to tap it. Advertising is a cyclical and finicky business and I don't get how much predictable revenue streams exist there. Just as newspapers ceded to TV which ceded to the Internet, it is not clear what the ROI will be for all this investment. Thus, I argue that Google is not yet proven from a long term perspective. Further, Online Adverstising is still unproven from a results perspective (kind of like the Gold Rush - every advertiser wants to advertise but how effective is it really?). I would think twice about betting the farm on something that we clearly don't have a good handle on.

Great disappointment with the senior team. Even a L68 like me feels a tremendous sense of foreboding. With the exception of perhaps Robbie Bach, that gang came across as a bunch of tone deaf people who are out of touch with reality with all their funny math. Steve is so financially unsavvy that it is embarassing - he actually seemed puzzled (and not in a pleasant grandfatherly kind of way) with the stock gyrations - his comments had me cringing. What an idiot! I can't believe I have to kiss up to these people. Jeff Raikes is an arrogant snob and it showed. "KJ", "KT" I believe. He calls them the quartet - I think that is probably the most interesting thing he said. I'll offer him one correction - he should call them the Barbershop Quartet and get matching striped jackets and an organ grinder. "SB" already plays the prancing monkey well so there's some cost savings there.

Perhaps my biggest disappointment was with Bill Gates. What an incredibly TONE DEAF man. We work hard to build his company and make him the world's richest man - and he demonstrates his sense of commitment and respect for the company & us by not even making a token appearance at an important company wide meeting. Of course, he had more important things to take care of - after all a Bridge game with Warren Buffet is pivotal to Microsoft and the future. I ask, no DEMAND, that he return (not sell) 50% of his shares to the firm into the employee pool.

As far as the compensation goes, nothing really changes. The curve still exists in another form. The changes are designed to reward the minority of top performers only and not the rest - i.e. - the vast majority. That is a great thing but most of you will not see any major changes in Aug. The moves also put managers in the driving seat and clearly there is good and bad there. There are also some very obvious ways to game the system again. I'm sure some of you smart people will figure that out.

One missed opportunity was to make a good adjustment to the base salary - I read many of the comments here and it is a sad day if the salary we pay you makes it hard for you to make a decent living.

Still Kudos to Lisa - these changes are not token and it took a lot of Courage and Conviction for her to drive to these outcomes. I hope she continues to be successful.

Dear colleagues, I'm sorry for the predominantly negative post but I personally am disappointed for all of us and Microsoft.

Anonymous said...

What I saw about 4.0 persons, they are mostly noise generators. They generates a lot of pressure on others, quickly get a promotion and leave the team. And 3.0-3.5 folks have to fix everything, make it working, fix all these bugs in quickly brewed code of "high performer", rewriting most of it.

Anonymous said...

News Flash: If you want to be a multi-millionaire (without becoming a partner) and retire by age 40 MS is not the place for you. The stock will NEVER see performance even close to what it was in the '90s. That was lighting in a bottle, and you missed it. If being a zillionaire is that important to you, you need to leave and go take a risk at a startup and hope that you win the lottery.

That's the problem. Anywhere else, a chance at becoming a zillionaire required serious risk. In the 90s, you could work for MS, have 0 risk (MS could always make payroll ...), and still walk away with a dumptruck of money from the rocketing stock. People here want the big rewards, but they don't want to take any risks. Why should they? They never used to have to, and the elite at MS still don't.

If you picked the best and brightest from the halls of your building, and asked them about joining a startup, I predict that most would feel so uncomfortable about the risk that they'd announce that it isn't for them. And you know something? They're missing out on opportunities to see how other companies do things. Just because it's different than how MS does it doesn't make it wrong. If they chose to return to MS, they'd have a much broader perspective, and that can only help.

While I say that I agree that the people who want to get rich should take some chances, at the same time, I also believe that MS is underpaying employees, as a remnant of compensation that was appealing when it came with a rocketing stock. 65th percentile is over the entire software industry. That includes the most trivial programming jobs and the most elite. Note though that Microsoft pays above average in that classification. However, the classification is unfair. The skills needed, for instance, for key kernel work (Test, PM, Dev, whichever) in COSD are much rarer and precise, than than someone excelling in Javascript. A comparison of salaries of similar jobs across the industry (or go ask a recruiter trying to fill slots in the toughest positions, whereever they are [I just used COSD as an example, I'm not making a statement about COSD being the toughest or anything]) shows that Microsoft definitely finds it difficult to make competitive offers.

Microsoft is an excellent place for those who crave stability. The benefits package is perhaps not what it once was, but it's still among the best in the nation.

I don't appreciate the attempts by many to squelch discontent here. Microsoft employs me (and I work for them) in what is called 'at-will employment'. I can leave when I choose. When the time is right, I very definitely will. However, should I choose to voice my opinion that the compensation system is wrong, unfair, or anything else, attempts by many to call me a 'whiner' simply sounds like the elite dismissing the masses.

I was not surprised by the announcements. I was surprised by the number of people who were ecstatic with them. If you're thrilled, then by all means, enjoy them thoroughly. If you weren't thrilled, what were you expecting? Those in charge to take responsibility when they don't have to? Serious pay increases? Those who made their name shipping Windows 95 admitting that this doesn't justify being mega-compensated eleven years later? Nah, that won't happen without hacking the top off of Microsoft, and the odds of that are zero.

If you're unhappy, find the right opportunity, and leave. If it frightens you and you're a good performer, you need not fear: The odds are good that Microsoft would hire you back, with a raise and a promotion to boot.

I'd like to directly request something of Venture Capitalists: Please start opening satellite offices in Redmond or Bellevue. There's an awful lot of talent that, if they can master their fear of insecurity, may be the core of your next booming startup.

Anonymous said...

Why not simply get rid of these 20% of lazy or low IQ idiots and raise the base pay from the saving.

Yes, I was shocked when my GM bragged that one of the great attractions is that we don't need to worry about resources. This is why we got too many fat in the org. I we cut our product group by 20%, we should be able to ship sooner. We have too many people working on create problems to justify their job.

SteveB and BillG, you need to wake up – We have too many PMs trying to coordinate to solve problems they created themselves; too many researchers in MSR publishing useless work or creating useless demos for Techfest BS shows; too many VPs doing nothing like these PMs... It is time to get engineering centric discipline back to the company!

Anonymous said...

It is a mistake not to offer the greater stock benefit to partners. It is their vision and strategy that has taken MSFT where it is. It is not the employees.

Would all partners who believe that they're highly deserving for overwhelming reward due to providing the vision and strategy to bring Microsoft to where it is today please stand up?

For those who are standing, please explain the vision and strategy you've used over the past six years for those of us who're apparently too dumb to see the brillance. Remember to point out how the plan involves the continual decline of shareholder value over that time period.

I'm sorry, I don't buy into the belief that since Microsoft was booming in '94 when you worked hard and made your name in the company, that you forever deserve ridiculous rewards. If you continue to claim a right to these rewards, you must accept blame as well, especially for the last six years.

Anonymous said...

It is a mistake not to offer the greater stock benefit to partners. It is their vision and strategy that has taken MSFT where it is. It is not the employees.

When was the partner program put in place? Where has Microsoft gone from a vision/strategy standpoint during that time?

Yeah, that's what I thought.

Now, I'm not arguing that there aren't plenty of partner-level employees who are great contributors, but if you don't think that the partner ranks are swollen with rest-and-vest holdovers from the 90's who are just dying for the stock to hit $40 so they can finally cash in and retire, you are blind.

And you are completely wrong to discount those who actually design, write, and test the code. If you don't think the in-the-trenches engineering teams are responsible for our successes, you are completely insane.

Anonymous said...

A few comments from a new hire:

i) Many have "bagged" the changes and clearly haven't read them fully.
ii) Several posts here are from people who are not going to be happy regardless...
iii) Microsoft needs a more open culture that will allow creative ideas to percolate up, without having to resort to anonymous blosgs (yes, I'm anonymous, I know :-)
iv) Try working at IBM, where you can very easily get misplaced (I was there for 6 years), I sense that many here commenting have not worked anywhere else and don't know how good it is compared to "outside".
v) What concerns me is the many places I see long term employees not really performing and they are allowed to stay?
vi) I agree Steveb needs to be more accountable for the stock value

Anonymous said...

What is a RIF?

Anonymous said...

One can only hope that the rumored RIF will get rid of the "consistent 3.0 performers." At least from the dev teams.

---

this has been a targetted plan for quite a few years .. i had an alias which was similar to a "partner" and ended up getting an email from Steve in 1999/2000 which basically indicated "more than two or two 3.0s in a row start moving them out"

which is why sometimes you end up in a new group after leaving a group with a 3.0 (warranted or not) and you amy find that the new group is also treating you the same way within a few months the same way as your old group did (YMMV)

No one answered it but i seen a question here about those who have been wronged by the old system ... will they have a chance to a) come back and b) be able to succeed? (b is clearly subjective at this point but a) is interesting)

Anonymous said...

I watched the Webcast the other day and was gob smacked at the level of benifits that the US gets to compared to the rest of the world.

Towels for Goodness sake!

Dinners cooked so you can take them home and eat them!


In the MS Sub I'm in we get "discounted" meals at best. It took 3 years to get "free" drinks enabled as part of our package.

Some of the changes are a good start , but the rest of the MS world have just seen how good people in Corp have it.

Anonymous said...

Okay Mini, this is the right time to go on a 2 month blog break. Let us all get to doing some work now that the towels are back for the masses.
What? Nothing has been achieved. We still desperately need this blog to talk indirectly to the management.
This HR adjustment is a minor change. The profound problems at Microsoft are still here and very real – useless layers of management, integration deadlocks, omnipresent bureaucracy.
These must be fixed.

Anonymous said...

The biggest problem MSFT faces right now is not towels, stocks, or bottled water. It is the near complete disconnect of Dev with PSS and our customers.

When I say Dev, I do not just mean Vista Core - I'm also pointing at you, WinSE.

Repeatedly shooting down bugs because "it's always been that way" instead of taking the opportunity to correct mistakes is why many customers use our products only begrudgingly (this is why WinSE needs to be RIF'ed before all - my favorite is when a component owner who has never worked on anything else in his short professional life tells you how easy it is to fix his crummy app based on its random symptoms - then refuses the offer to break a colleagues machine the same way and see how long it takes a novice to figure out.).


Amen to that brother (or sister)!!!

WinSE doesn't do any engineering. Next to HR, they are probably the most useless group of folks on campus. Their mission in life is "try not to fuck things up too much". How many hundreds of people do they have in the US and India working in this group? And they apparently STILL can't manage to get SP3 out until the second half of NEXT year (http://www.microsoft.com/windows/lifecycle/servicepacks.mspx). WTF?

And if you do stupid retarded things like take away services and (seriously) OFFICE SUPPLIES as cost cutting measures than the company has NO RIGHT when Google starts poaching and offering free chef cooked breakfast, lunch, and dinner, as a base benefit.

That's a great point. They could've matched google on something like this, and it would've made an impact on thousands more employees every day (way more than will be impacted by the "dinners to go" program). Or at least subsidized the cost of meals in the cafeteria. Don't tell me that they are doing that already. I think it's $3.50 for a cheeseburger now. $1.70 for ONE cookie. And they even have the balls to charge people $2.25 for a 16 oz glass of orange juice!!! I guess this is the way they stick it to guests who don't know that all of the regular drinks are FREE!

Oh, and the cost of the food has gone up while the quality has gone down. Service time is also an issue (I've waited 15 minutes for a simple grill order before...and that's after confirming it with the cook several times). If parking wasn't such a huge problem in my building, it would be cheaper for me to drive off campus and get lunch.

In the 2 years the average level for a new hire in Microsoft was bumped up at least 1 level (2 levels for some disciplines). However the quality of people hired diminished and bar getting lower and lower these days. Now this means at lease two things: 1. the level increase you worked for in the past 2 years has been completely offset by the rise in the new hire level; 2. Microsoft cannot attract new talent on vision and potential anymore and it has to rely more and more on hard cash - however its a known fact that most of the really good people are motivated by vision and need to impact the world. With these in mind the current changes do nothing to fix Microsoft's long term problems.

Another post I completely agree with. It makes me sick to see this stuff happening. They're also getting bigger stock awards (because they're at higher levels), so they generally don't understand what all of the bitching is about, because they assume that everyone else already has a better deal than them. Try telling the n00b in your group that they're a higher level than you, thanks to the new hiring restrictions. See if you can spot the exact moment the twinkle leaves their eyes.

Anonymous said...

--The more things change the more they stay the same. This is the same review stystem we had 5 years ago... same BS

--Incompetent Billionair's Boy Club is still in competent, unaccountable and out of touch with employees, customers and reality
--Execs that dress like crap (Brummel) and act like jack-asses (Ballmer) hurt us
-- What does KT do anyway? Why is he traveling the world?
--Did we need the first 1.5 hrs of we are the best and we have a vision....? Same old
--It's the stock price stupid!
--Really take care of your employees stupid! Don't insult us.
--This meeting left me depressed and disallusioned.
--And who is Ballmer kidding? We'll look back in 2016??? Most of us, including him will be long gone.
--We are in year 6 of Ballmer's 2000 ten year plan. How are we doing? He just reset the clock and started another 10-yr plan. Give me a break.

Anonymous said...

"I'm the partner who has been posting and I wanted to provide my reaction to the announcements. I would also like clarify that I am not the person who posted the SPSA goals (can't confirm or deny if they are accurate) - somewhere along the line both of us got mixed up.
"

I just wanted to say thanks for posting. Your posts seem much more beleivable than the troll-like posts of the other "partner".

I would be interested in hearing if you have any observations on something I have been wondering about. When many good people are leaving a team, do the people at the partner level generall know / care?

I wonder because on my fairly small team I have seen several very good people leave. During thier last days I would talk to them and the story was always the same. They would say that nothing happened for most of their two weeks notice, then thier lead would come and make a pitiful offer for the person to stay. Anyone higher than 2 levels never even spoke to them.

Of course we have had open reqs for these people for many months and I doubt we will find people who are as good.

Thanks for listening

Anonymous said...

Plenty of good jobs around outside Microsoft?

I've Heard a lot of "if you don't like it - leave!", and, "there's a ton of opportunities around right now!" talk recently.

So, in the spirit of a "Mini Microsoft", why don't prospective employers (or former employees that have 'made the jump') post links to where these other opportunities are?

Now just isn't a good time to move internally (you likely won't get permission to move in Windows at least), so why wait for the rumored RIF? (Where did that rumor come from, anyway?)

What do you think Mini - seem reasonable?

Anonymous said...

"What is a RIF?"

Reduction in force. Another fancy way of saying you are fired.

Anonymous said...

Mini, just a few thoughts - BillG and SteveB seem to have mangled their proverbs - instead of "It's an ill wind that blows nobody any good" and "A rising tide lifts all boats", they appear to have "It's a ill wind that lifts all boats" and "A rising tide that blows nobody any good".

To get specific, I'm the fellow who wrote a few weeks back, explaining how he had tried to install Visual C++ Express but was stymied by its internal beaucracy.

What I'm dying to ask is this - how is this going to affect my chances of actually installing VC++ Express on my MS Win2k partition? Without VC++ Express throwing its hands up and demanding overtime for actually being expected to work? Don't get me wrong - I think the CHM file format for help files is probably the best help file format around, so good it should be taken to the ECMA and made a public standard.

But if VC++ Express won't allow me to use whatever HTML engine I choose, and forces me to use something I personally distrust - MSIE6 - then this changearound at Microsoft, no matter how useful (or not) it may be to Microsofties won't be of much use to me at all.

"It's a ill wind that lifts all boats" : "A rising tide that blows nobody any good".

Anonymous said...

"How many of those Gold Start stock grants are under water :-)."

I received a gold star every year at Microsoft. All of my Gold Star awards were a non-trivial chunk of cash (level 61-63 in Windows)

Anonymous said...

I completely agree that most of the MS employees are frustrated and piseed that they are not becoming rich like others who joined in early 90's. This is a classic stock hype case.

People in early 90's who joined MS, never imagined that the stock options would make them millionares. I did not expect to become one when I joined in 1994, when they offered me a job out of college, and gave me 800 options(which became almost 10000 options due to splits. Frankly I did not know what stock options were). So people in the late nineties joined MS hoping to become millionares after seeing this, and came with expectations that they would be millionares in 7 years, and when that did not happen they are frustrated.

My sincere advise, if you want to make money, you need to take risk. I left microsoft 8 months ago, and joined a startup, so far we are doing good, and the options they give are plenty(just imagine 50K options at 11 cents). I dont have big hopes on them, but even if they do OK, I will strike it rich again, but if I dont then that is OK, I still make a good living. One needs to take risk to make money. You cannot have the comfort of great benefits, confirmed salary and then a million in 5 years. That does not happen to people who wont take risk.

About a month ago I was talking to Google recruiter(somehow google always gets the names of people who leave Microsoft). She was mentioning all the great benefits and technology etc, and then she mentioned that "look how great the stock is doing". Because the stock is doing great, it will compensate the salary hit you will take(they were offering me 10% less than what I am making, and about the same I used to make as L63 in MS). I just laughed and told her that I used to be a hiring manager in Microsoft, and I used to lure potential fence sitters using the same stock options story in early 2000. If someone is joining Google assuming the stock will make them rich, then they are dreaming. She was surprised that I was talking like that. Finally I told them that I would take 50% less stock from google, if they would increase my base pay by 25%, and she said that she would try. She has not got back to me even after 3 weeks.

Hang in there folks. There are many startup's here in NW, and they are hiring. Many of the startup's are moving from Bay Area to Seattle, as things are very expensive in Bay Area to operate, and many startup's feel they can hire some great experienced folks from MS, RealNetworks and Amazon, since these companies are not doing good for employees anymore.

Anonymous said...

From two seperate comments:

What is a RIF?

Reduction in force, aka layoffs.

Dinners cooked so you can take them home and eat them!

Employees pay for this; they aren't given out for free.

Anonymous said...

I think the changes are good, at least for moving things arround.
But it would take more then two years to filter out bad managers and IC. You cannot take a decision based on one review, specially one that is the first based on a new review system.

Anonymous said...

Back to the town hall meeting, and Stevie's comment, "everyone should buy the stock."

Holy cow, Steve does one hell of a imitation of Ken Lay!

and remember Steve hasn't bought shares in years. He just sells'em.

[As a side note, did anyone pick up the inconsistent comments between Kevin and Steve regarding the cause of the $2.4B gap? One says marketing, the other says xbox cogs... snd this was during the same meeting. Even with the telepromters, they couldn't get this part of the story right.]

Anonymous said...

Question to the poster that said that there are many startups in the NW looking to hire tech talent:

Any hint on where to find/research these companies and open positions?

Thx

Anonymous said...

What I saw about 4.0 persons, they are mostly noise generators. They generates a lot of pressure on others, quickly get a promotion and leave the team. And 3.0-3.5 folks have to fix everything, make it working, fix all these bugs in quickly brewed code of "high performer", rewriting most of it.

Survival of the loudest. Unfortunately, loud doesn't equate to smart. And its starting to cost us.

Anonymous said...

Of course, he (Gates) had more important things to take care of - after all a Bridge game with Warren Buffet is pivotal to Microsoft and the future.

I've been at Microsoft for awhile. Gates was sending a message to us via Ballmer. He's essentially saying: 'Chortle if you like. Its all a game to me.' Don't believe that? Stick around awhile. You'll see. Is it reprehensible and stupid? Yeah, it is. He's a moron.

Anonymous said...

There are two ways to justify getting more money:

1) You NEED more--yeah, right. "Waa, property prices are so high. Waa, BMW wiper blades are so expensive. Waa, Daniel's Broiler just raised their prices." Dammit, you're making us all look bad.

2) You DESERVE more--much better reason. You probably do tangible work on a product that makes billions of dollars. Where do these billions go?

a) Executives' pockets. They're already way richer than you and they still make many times what you do in salary and bonuses. (Even though it's obvious that they aren't very good at their jobs.)
b) Stock buyback programs which supposedly increase the value of the stock but really just allow executives to shower each other with more options.
c) Colossal f***-ups like MSN and XBox that burn through money like it's going out of style.

So, right, almost all the money you make for the company is being pissed away when at least some of it could just be returned to you. I'm surprised there's not more indignation about THAT.

Anonymous said...

I received a gold star every year at Microsoft. All of my Gold Star awards were a non-trivial chunk of cash (level 61-63 in Windows)

I got a gold star award last year. No cash, but a "review's" worth of stock grant. I must suck.

Anonymous said...

Towels for Goodness sake!

Dinners cooked so you can take them home and eat them!


MS must have made a mistake in hiring you if you think these are the top wishes of most people in the Redmond campus.

These weren't the main changes people wanted - look around and you'll find topics around compensation, curve, and process being amongst the top complaints.

Anonymous said...

>my debt is steadily increasing to the point when it starts to really depressing me.

And that's Bill and Steve's fault?

Like Steve Martin said on SNL a few weeks ago: If you don't have money, don't buy it.

Anonymous said...

"In the second case, Microsoft announced we we made amazing money, and would be investing a "shitload of money" in future bets. And analysts were expecting Microsoft to say "We're investing a normal amount of money in future bets"

You're a little confused here. After waiting 3 years for the long-promised earnings acceleration from the much-delayed "greatest wave of products in our history", analysts were sand-bagged by management who decided (w/o advance warning) to take most of that upside and spend it. Analysts don't like being surprised and there would have been a price to pay for that anyway, but they might have been pursuaded to cut the company some slack if not for the juvenile "and we're not going to detail it 'til the analysts meeting" and of course management's absolutely hopeless track record of getting a payoff from the shitloads of money pumped into other emering bets since 00.

"The "any reasonable company would have taken the towels away during the dark times" argument is infuriating to me."

Then perhaps you should concentrate on reading. What I said was, any reasonable company would have taken steps to trim expenses in the face of the worst growth in company history as a public entity.

"Because Microsoft is simply the greatest money making concern in the history of the planet earth and it shows NO SIGN of stopping any time soon."

Yes, it's one of the greatest money makers ever and while there's no sign of that stopping, but there are numerous signs of it slowing and margins being impacted not just by pricing pressures but importantly company specific decisions (dilution, emerging bets, employee perks, etc).

"Since that time, Microsoft has continually and consistantly increased its revenues and profits year over year."

Continully yes, consistantly increased absolutely not. Until a year or two, income was near totally flat vs 00 and of course, revenue last year saw its worst rate of growth since the company when public. BTW, also keep in mind that MSFT restated prior years financial performance when they ended options. This was onstensibly to make for more accurate compares but in reality, it provided for easier compares.

"As a reward, the market, our investors, are trading us at $23.50. Even if you argue we were over priced in 1999, its been nothing but an ever increasing amount of money, non stop, no pauses, since then. yet our stock is trading at the exact same price it traded at, stock adjusted, in 2002."

Yes, because again, earnings have not followed revenue for most of that period due to Steve's maasively expensive emerging bets and the out-of-control headcount increases post 00. Additionally, the early to mid part of the decade was dominated by legal uncertainty and fines, and the subsequent period has been marred by massive execution failures and concerns about slowing growth and frankly management incompetence.

"And yet, employees have not blinked, we've in many cases doubled our efforts."

Puhlease, you've received extra options hand outs, across the board pay increases, underwater-option trade in, grants, etc. The company has done a lot to shield you folks from the pain you otherwise would have suffered. Regardless, hard work doesn't mean squat - results do. What part of that are you confused by? Do you think workers at many failed tech companies didn't work their ass off? Wake up.

"A great example of this is Windows XP SP2, a cost based FREE upgrade to Windows to increase security. (I know, I know, we needed to do it, I'm not arguing that customers didnt deserve SP2 for free, I'm saying it was EMPLOYEES that have busted their ass in the past 7 years since our stock high, as a generalization)"

Glad you agree that SP2 was a requirement not a gift, but unsure why you see it as success? Frankly, I see it as a massive failure to deal with security seriously until it exploded and was costing sales - with the result that everything had to be dropped, Vista delayed and employees work their asses off for something that should have been there in the first place and hence had to be given away. That's a multi-billion dollar fuckup in my book - but kudos to the team who worked hard on it - it's a much better product.

"But the market has not rewarded the fact that Microsoft has been an ever increasing earnings machine for 7 years, through the horrible dark times of 2000-early 2003."

Again, you're wrong on the "ever increasing". Yes, there has been massive P/E compression in MSFT over that period but as above, there's always been some major bad news every year and for much of that time, one could argue that the market was cutting MSFT slack by allowing it to maintain a 20+ multiple despite single-digit growth in revenue or even negative earnings growth. Lately, the issue is more confidence - I think the Ballmer et al have clearly lost any credibility with the street and investors.

"It's easy to sit there and say we don't deserve our compensation."

I said you deserve compensation commensurate with your results. Results haven't been stellar, so rewards overall should have been modest. I do however agree that your executives are recieving an asinine share of the overall despite pathetic leadership.

"It is so, not because of monopoly or business practices, it is so because employees have worked to make it so."

Company success is a function of good strategy, good leadership and good excecution. All are critical with none more so than the other.

"We deseerve our slice of the pie. The company has enough money, CASH ON HAND, to pay every single employee a cash bonus of $523,000. (34 billion divided by 65k)"

That cash belongs to shareholders who've lost $370B since Ballmer took office. Think they'll vote to give it to you as a bonus?

"It wasnt shareholders who, even through the darkest of technology market dark times, still made MSFT pull through with ever increasing *record breaking* profits."

No, they just underwrote all the costs via a lower stock.

"Hell, remember that the stock market is made up of investors. If anything, our investors HAVE PUNISHED US."

No, investors who stuck by you (me being one) have been royally screwed while your insiders have made numerous fuckups and yet been paid ridiculous amounts of mostly stock compensation which they have then turned around and sold - thereby helping to punish the stock. Look, I agree that general employees perhaps deserve more. However, I believe that extra should come out of the executive pot because MS's total comp is already outrageous and results don't support increasing that. If you do anyway, then the stock will fall and shareholders who've lost 60% since 00 will lose even more. But I think they've had enough - so even further screwing them isn't an option.

Anonymous said...

>>By the way, during her world tour, Lisa dressed like we do here in our field office.

Uh yeah... do you dress the same way you dress "at home" as when you leave "home"?

She even explains that here:

http://channel9.msdn.com/ShowPost.aspx?PostID=158478

Anonymous said...

>We do a good job, we're expected to work sweatshop hours, and we're just asking to be fairly compensated and be able to spend some time with our families.

Somehow, making 20% more than the area's median salary isn't "fairly compensated"?

Try getting a job at Yahoo - you'll get a double pay cut (salary, and California taxes). Sure you'll hear stories of people getting big raises on leaving - but those are top performers, not you.

Anonymous said...

>>Some of the changes are a good start , but the rest of the MS world have just seen how good people in Corp have it.

Uh... even Google's field offices don't have all the luxuries of their HQ. What do you expect?

Anonymous said...

No, investors who stuck by you (me being one) have been royally screwed while your insiders have made numerous fuckups and yet been paid ridiculous amounts of mostly stock compensation which they have then turned around and sold - thereby helping to punish the stock. Look, I agree that general employees perhaps deserve more. However, I believe that extra should come out of the executive pot because MS's total comp is already outrageous and results don't support increasing that. If you do anyway, then the stock will fall and shareholders who've lost 60% since 00 will lose even more. But I think they've had enough - so even further screwing them isn't an option.

Angry shareholders and angry employees seem to be a clear sign that the leadership has screwed up big time and yet is showing no signs of any meaningful corrections.

Anonymous said...

It is a mistake not to offer the greater stock benefit to partners. It is their vision and strategy that has taken MSFT where it is.

EXACTLY why not only shouldn't they be getting a bonus, but they should be forced to pay back some of the compensation they've already received.

Ok, I know that would NEVER happen. But letting them make 50% of (some huge number of shares) for FAILING is a major management disaster.

I received a gold star every year at Microsoft. All of my Gold Star awards were a non-trivial chunk of cash (level 61-63 in Windows)

I've talked to dozens of peers, many of which I know have done a lot better than me performance-wise. I've even talked to my managers over the years, and some of their peers. VERY FEW of them knew what a gold star was. None had ever received one. So if you've received MULTIPLE awards back to back (or longer), you must either be a major suck up, report directly to a VP, or both. Even those that had heard of them knew that these were supposed to be spread across the group, and that the same person should NEVER receive them multiple times, unless they were truly the only star performer in the group. Oh...maybe that's it. The rest of your group sucks and it makes you look super by comparison? Lucky you. I guess you work in MSN.

Anonymous said...

Wrote the partner:

"Then what is the XBOX business about? Why are we then in the hardware (console) business? That's a loaded q - I understand why but I don't believe the vast majority of the company gets why."

OK, I'll bite. It's off topic, but why are we in the Xbox business? Because the Xbox team is doing a pretty good job executing--imagine if they worked on Windows, Vista would have been out by now, not to mention the extra $billions we would have in the bank. So I'm sure many people are curious about the grand plan there.

Anonymous said...

Steve Ballmer loved the stack rank system since it resembled Jack Welch's attitude toward the bottom rung. He was so enamored with Welch.

GE was able to build business silos. What does broadcasting (NBC) have to do with building jet engines? Very little. Separate them. When you have completely disparate units you have to come with some template for managing them. There, in that case, for GE, stack rank might work. Microsoft is a spaghetti of interrelated businesses, the total success of which depends on the parts pulling together. If you put the parts in contention with one another then all of a sudden the boat is put in reverse and we start heading opposite of where we need to be. Software has always been sort of a counterintuitive enterprise. Its amazing that steveb doesn't have a feel for that.

Anonymous said...

To the "investor" who posts his infinite rantings about "destruction of shareholder value" and the like. It is your own fault. Microsoft is not a "get rich quick" scheme that you thought it was when you bought it. Just be thankful that you didn't lose all your money like those who invested in dot.coms.

Unless your name is Bill Gates or Steve Ballmer you don't have any influence on how the company is run (just like the rest of the employees). Instead of making us read through another "Mommy, they've taken my money and they are not coming back" of yours, do the only thing a general shareholder can do to send a message: sell.

Anonymous said...

I am pretty surprised by the I Love Lisa camp. Have you guys even read the benefits fully? Just top few things

1. Compensation: No change in base pay. Big stock awards to top 10%. Ok so this means 70% of folks are going to get the same stock grant - an asset that is down 20% in the last month. So oops - your pay remained the same, the stock remained the same, but the total value of your comp went down 5-105 depending on how much stock is part of your total comp.
2. Workplace Enhancements: Drycleaning - yeah drop your shirts off Monday and maybe get them that Friday or most likely the next Monday for $2.50 a shirt. The neighborhood drycleaner I have charges $1.50 and turns them around in one day. So tell me again what this is about?. Food in the cafeteria - you know this is only in certain cafeterias, right? So now if you are in say building 10 you need to haul your ass over to 25 if you want Shamiana food - and wait in line and pay market rates or more. Tell me why you wouldnt dash off to Kabab Palace and get better food in less than half the time? Pet Care - 'nuff said
3. Performance Management - Ok this is the most stupid program any one could roll out. I am not surprised LisaB got 3.0s. She doesnt seem to be able to think through basic scenarios. How many of you manage weak employees? How do you set their goals? Yeah you know what I am talking about. You give weaker employees easier stuff to do. I mean are you going to give the really tough work items to the weak folks, see them fail and then have your project suffer? So now - you have a weak employee who you are giving stuff that you know makes them stretch a bit but you are hoping they will achieve their goals and guess what - they are a "meet expectations". So if you are a good resource planner you are going to hopefully have everyone be a "met commitments" or "exceeded commitments" - because if people didnt meet commitments - meant your project just had work that didnt get done. Now suddenly this rating has zero value. Frickin' idiots.
Curve - once you believe in differentiated rewards, this isnt going anywhere. And it shouldnt. Infact managers who peanut butter rewards should be called out for being weak managers.

Anonymous said...

"So, in the spirit of a "Mini Microsoft", why don't prospective employers (or former employees that have 'made the jump') post links to where these other opportunities are?"

http://seattle.craigslist.org/sof/

There's like, hundreds of them, in Seattle metro area. Saw few offering 100-125k for senior SDE, that's better than L63 SDE gets at MS - and, in smaller company you might get stock which will actually be worth something if the company takes off in few years. And, there's no multiple layers of parasite senior management in small company, they can't afford it, everyone has to contribute for the company to have chance to take off. And, these smaller companies are experts in whatever they do - MS just cannot compete with them, just only having started in areas where others were for years. Once it comes to battle (competition), smaller company fighting for survival will do whatever it takes, first of all promising to share the prospective winnings with its soldiers. It's Sun Tzu's Art of War 101, soldiers have to visualize the reward, and this reward has to be meaningful enough for them to justify risking wounds, otherwise they won't fight with commitment. MS doesn't share the winnings appropriately with soldiers, they don't have no prize worth striving for in their sight (7% bonus won't change typical SDE's life in any meaningful way, sure, you can buy nice drunk trip to Vegas for it, but that's not something worth sacrificing health). That's why MS will start to lose the battles soon, and eventually will lose the war.

Anonymous said...

So if you've received MULTIPLE awards back to back (or longer), you must either be a major suck up, report directly to a VP, or both. Even those that had heard of them knew that these were supposed to be spread across the group, and that the same person should NEVER receive them multiple times, unless they were truly the only star performer in the group

Lord have mercy. See what the superstars have to suffer? This turd thinks there is no way one can bag accolades by merit. Another poster thinks one can be a superstar only by having no life.

These are the people clamoring to make MS a socialist state. You know, equalize everybody and let their be no difference between the top and the middle class.

But there is a God. The stack is still there where it matters most and the top performers will still reap the rewards of their exceptional contributions.

Yes LRA is gone but a good hiring manager worth his salt can still sniff out the dreg seek to go sediment in another group

Anonymous said...

In the 2 years the average level for a new hire in Microsoft was bumped up at least 1 level (2 levels for some disciplines). However the quality of people hired diminished and bar getting lower and lower these days. Now this means at lease two things: 1. the level increase you worked for in the past 2 years has been completely offset by the rise in the new hire level; 2. Microsoft cannot attract new talent on vision and potential anymore and it has to rely more and more on hard cash

Yes, this year, someone with no experience doing exactly the work that our group does was brought in two levels higher than my current level. I walked in the door two years ago with a 10-year track record in our group's niche. No, he doesn't have more degrees than I do. No, he didn't come with an impressive management background. The reason: he wouldn't sign on the electronic line for the kind of laughable salary I grudgingly accepted 2.5 years ago during the nadir of the dot com fiasco.

Yes, I know. I accepted that salary, along with the recruiter's promises of an amazing upside to compensation, with quick promotions, huge bonuses and stock grants, and 7-10% increases per year that would "quickly get me back up to where someone with my expereience should be." Nope. I received 250 or so shares last year. After taxes, that's not even 1K/yr in additional compensation, at 20% per year. Of course, I came in low, so my initial stock award was also paltry, and since I was hired during an industry downturn I didn't even get a signing bonus. And yes, I negotiated hard for better. I own this, and I also own the decision to take my two-gold-star-earning self out of Microsoft if proper leveling is not forthcoming soon.

LisaB, are you listening? The company picked up more than a few stars during the downturn a few years ago. I strongly advise you to go back through the hiring that has been done over the past few years, and find the people with decades of industry experience who were hired into levels that generally reflect 2-5 years of experience, and JUST FIX THIS using HR level adjustments, unless it's OK that we leave. Another way you can identify compensation problems in groups is to compare the experience levels and hourly rates of recently-hired contractors to those of employees hired 2002-2005. I've had THREE AGENCIES see my resume on the net and call me for temp work -- IN MY OWN GROUP -- at 25% more per hour than my current compensation (and that's before any OT is factored in). It's really not sending a great message to recent FTE's (it sends the message, ha you chump!) that MS is willing to pay contractors *that* much more than recent FTE hires. Yes, we get benefits as a blue badge. I'm young and single. The benefits I use are not worth enough to me to make it worth forgoing an additional 35,000 on my paycheck anually. And yes, LisaB, that is the difference in salary I'd make as an orange badge, assuming 8 hours of OT a week (which is much less OT than I currently do as FTE, uncompensated) versus what I'm earning now as a blue badge. 35,000 would pay for great insurance, make up for a couple percentage points in 401-K matching that I'd be losing, and fund my Pro Club membership; and there would be plenty left for me to pocket.

Anonymous said...

How do you define "good job executing" ? XBox is losing money, hand over fist. Sounds like shit execution to me.

They shipped on time, hitting the Christmas season in 2001 and 2005, which was impressive. The stuff basically works. They beat Sony and Nintendo with next-gen. The PLAN was to lose lots of money up front and they are executing on the plan. The question is why was this plan approved.

Anonymous said...

OK, I'll bite. It's off topic, but why are we in the Xbox business? Because the Xbox team is doing a pretty good job executing--imagine if they worked on Windows, Vista would have been out by now, not to mention the extra $billions we would have in the bank. So I'm sure many people are curious about the grand plan there.

Everyone in xbox is excited about their jobs. There's a lot of great buzz about the part of the business. So, why is the xbox team so excited about the work that they are doing when few if any people in the Windows division are excited about what they are working on? Figure that out, and then maybe people over in Windows will execute better.

How do you define "good job executing" ? XBox is losing money, hand over fist. Sounds like shit execution to me.

They were late w/ the first xbox. So they lost market share. And they must've screwed some big things up, because the PS2 just slapped it around (I didn't follow the launch too closely, so I don't know what they screwed up). And they haven't figured out Japan (and that didn't get fixed w/ the 360 launch). But now, with the HUGE lead they'll have on the PS3, they have a real chance to kick the hell out of Sony. If nothing else, they're going to force the competition to take an even bigger loss on their systems (several hundred dollars each, probably $300-400). They've also set the bar pretty high for the competition. EVERYTHING I've read from E3 - even from Sony diehards - is that the PS3 info was a MAJOR disappointment. Sounds like GREAT execution from the Xbox team.

And just for the record, I work in Windows.

Anonymous said...

(Possible book title flashes through my mind.)

"So long, and thanks for all the towels?" ;)

Anonymous said...

"To the "investor" who posts his infinite rantings about "destruction of shareholder value" and the like. It is your own fault. Microsoft is not a "get rich quick" scheme that you thought it was when you bought it. Just be thankful that you didn't lose all your money like those who invested in dot.coms."

MSFT has underperformed every major market index for 4 years. It's the 5th or 6th worst performer on the DOW 30 since '98 and I believe the 1st or 2nd worst so far this year. Yeah, us dissapointed investors are really just impatient complainers who wanted to get rich quick and should be thankful MSFT didn't lose all its value. Grab a brain.

"Unless your name is Bill Gates or Steve Ballmer you don't have any influence on how the company is run (just like the rest of the employees). Instead of making us read through another "Mommy, they've taken my money and they are not coming back" of yours, do the only thing a general shareholder can do to send a message: sell."

Michael Eisner at Disney used to share your delusion as well. MSFT is a public company and therefore accountable to shareholders. Gates, Ballmer and folks like yourself might be confused about that but it's true nevertheless. BTW, if you don't like the posts, don't read them.

Anonymous said...

"The question is why was this plan approved."

Because Gates got into a spat with the head of SONY when the latter wouldn't cave in and run Windows on the PS. So Bill retaliated by going head to head with SONY despite any real chance for a payback on the investment. It's all about trying to cut off SONY from owning the home.

Anonymous said...

Just read this full blog...and was surprised to even see the mention of "COLA" - in local, state and federal government, perhaps, but in the private sector??? I continue to be dismayed by the sad sense of entitlement that's spread through this company (guess that comes as we get bigger and more bureaucratic). If you don't like the gig here, leave...go get a job with the government and then you can get your COLA (and nothing else). Oh yea...hmmm, free towels, sodas and parking places -- forget about it.

Anonymous said...

LisaB, are you listening? The company picked up more than a few stars during the downturn a few years ago. I strongly advise you to go back through the hiring that has been done over the past few years, and find the people with decades of industry experience who were hired into levels that generally reflect 2-5 years of experience, and JUST FIX THIS using HR level adjustments, unless it's OK that we leave.

This is an interesting comment. I myself had been a 10yr softie in fall 1999. So with the stock at record highs and visions of early retirement in my head, I quit.

Then in early 2002, I got an unsolicited call from HR, asking me if I was interested in coming back to MS. (Someone must have been "mining" reviews of folks who had recently quit.) By now, I was on the road to becoming a new dad, so a stable income and insurance would be a Good Thing.

Long story short, I came back (with seniority, thank goodness - hello window!) but at a reduced level. So now I’m doing work 2-3 levels above where I currently am. I'm glad to hear that its not just me that experienced level-deflation upon re-hire.

Anonymous said...

Microsoft is always at it's best when it has tailights to chase. It has NEVER been good trying to innovate. Microft's money has come from selling someone elses idea better. From the origination of DOS to Windows, it's never been about innovation. Spending a huge amount of cash on research is a waste. Stop trying to crush any competition by leveraging the Windows platfrom.

Build the most stable, stripped down, secure, OS..... and let people build on top of it. Give them the APIs that they need. Spur innovation instead of crushing it. Let the market dictate what peoople want.

Cut the fat and give people the best steak (to order) that they've ever had. Let me order the side dishes a'la cart. Don't force feed me the things that I can download for free.

Spending on research is a very bad idea. Microsoft BOB.... I rest my case. Sadly

Anonymous said...

MSFT has underperformed every major market index for 4 years. It's the 5th or 6th worst performer on the DOW 30 since '98 and I believe the 1st or 2nd worst so far this year. Yeah, us dissapointed investors are really just impatient complainers who wanted to get rich quick and should be thankful MSFT didn't lose all its value. Grab a brain.

Microsoft has consistently met its profit targets and predicted them without surprises (expect for the last quarter). If you can't calculate the value of a company, it's your own damn fault!

Michael Eisner at Disney used to share your delusion as well. MSFT is a public company and therefore accountable to shareholders. Gates, Ballmer and folks like yourself might be confused about that but it's true nevertheless.

You're the one with the delusion. Gates and Ballmer have enough shares and influence to run this company as they please. The only thing that would get their attention is a significant stock drop. If you think that posting here will make senior leadership care about common shareholders, you deserve to lose all your money!

BTW, if you don't like the posts, don't read them.

How about: "if you don't have anything new to say after 10+ identical posts, don't post".

Anonymous said...

I thought more about the comment of a blogger about the company executives lacking wisdom.It is indeed true. Without not getting what you want, pain and defeat you lose keen senses of perceptivity and empathy along with wisdom. Those are the traits that allow executives to decipher proactively the warnings of the organization, the employees, and the customers that something is wrong.These traits help you to be proactive in assimlating the consequences and developing the solutions. Our executives throw money at problems or reorganize.When stock was splitting and resources were boundless they did not have to hone in on their skills to motivate a company. Ballmer keeps doing the same dance year after year. He will not change the formula.The execs simply have not developed those skills. When a country wants to go open source, they throw money at the problem, when emerging markets are a challenge they dole out money to that country like China. In essence being a monopoly has hurt them from learning these skills that they lack inherently. They know how to buy love but not earn it.

I recommend that the Board of Directors give some thought to this and make changes. They need to bring in industry people who have demonstrated through their performance both inherent and learned skills in effective executive management.

Anonymous said...

Microsoft Policies

Is Windows Genuine Advantage nothing more than officially treating everyone to be guilty until proven innocent? Think about it, you go buy a new PC that had Windows pre-installed, as if you had a choice. You got your receipt in hand, and the first time and thereafter everytime you must prove you are innocent if you want to download from Microsoft software which you had already paid for in full. On top of this, Microsoft tells you in their EULA, which you have no rights to even negotiate, that their software is only license for you to use, but how can this be true since they are making you prove time over again each and every time to prove you already had paid for this software. Doesn't this make you feel treated like a criminal to be subjected their policies, honestly?

Anonymous said...

Spending on research is a very bad idea. Microsoft BOB.... I rest my case. Sadly

Perhaps the former Melissa French (and current Mrs. billg) might have a different view of the ROI in this instance...

Anonymous said...

so you've been dugg, and for those of us who don't work for MSFT, an explanation of the following would be appreciated:

(feel free to point me in the right direction if an explanation can be easily found elsewhere)

-- the 5.0/4.5 // 4.0/3.5/3.0 // 2.5 scoring system; is this for both managers and employees? I understand that managers heavily impact employee scores, but how are manager scores impacted?

-- work/life balance; is this an official initiative? are managers told to implement some arbitrary weighting system for performance based on whether someone spends more/less time at work?

-- "Level 59s in a group. 60s, 61s and 62s in a group. 63s and 64s in a group." Clarity on these level/groups would be nice.

I'm not asking for anyone to go tremendously out of their way to provide this information; any one who can fill in a few blanks for (and likely others) would be greatly appreciated.

Anonymous said...

Long time reader (really long time), ok lurker. Like I am sure most people do, I don't agree with everything here (who would other than you right?). But I have no qualms with not agreeing, thats fine, thats what gets people to think.

I have done well at the company by working hard. I have given 60-118 hours a week for almost 5 years of my life. All for almost 300 million customers to get the best product. Am I full of myself? Maybe. But without keeping the end goal in mind, working that hard is just sadistic.

The only time I had an issue with the review system was after moving teams... before the review. Of course I knew what was coming, and even then it was only a 3.5, but it still messed up my average.

Other than that, I don't think I have ever had a problem with the way the review system worked. I have of course read many of the articles and comments here and don't disagree with everything, but the way I see it is that better the devil I know than the devil I don't. For instance I know I can make it to the top of the stack. I have managed to do it for years now. I know what that brings and the merit associated with it.

With this new system, am I now going to be punished? So now being at the top means nothing? I just have to share the merit with everyone else? I know that sounds selfish, and I can see how it can look like from everyone else. I am sorrty for that, but keep in mind I AM giving up my life here for our customers and the company.

I will be interested to see how it works out in September. But I did well with the old system. If the new system hurts the top performers (which I am basing on the fact that now the "fixed merit budget" may have to be spread across an entire org rather than the performers), then what is the motivation for them to stay at the company?

Anonymous said...

Clarity on these level/groups would be nice

L59 - starting SDE and SDET level for someone fresh out of college with NO work experience.

L60 - same as L59, but coming with 1-2 years of experience.

L61 - L60 + 2-3 years at MS.

L62 - L60 + 5 years at MS. This is the core developer level for an average developer job on an average product.

L63/L64 - senior developer owning core features in areas such as MSN Search, Windows Fundamentals, SQL Server Engine, other server products. L63 is also where the leads (first-line managers) start.

Anonymous said...

I've read enough here. I'm getting really tired of the complaining. The party is over guys. Congrats, you're an stuffed polo shirt working in a Fortune 500 company with all the bullshit that that entails. Now, can we get some work done here? We can change the world. Let's try that again shall we?

Here's what I think makes more sense.

Profit and Recognition for shipping product. If you sell a lot, you get a bonus based upon Sales. New Product gets a bigger bonus because it's harder to become successful with say... Onenote than it is with Word. Every product Microsoft ships comes with a read only file with the names of everyone who worked on it, and their position in the company. That way, if it's a shit product, you take the wrap equivalent with your responsibility. If it's a great product, then you get the accolades. (And no doubt some decent offers outside the company)

We keep scaling down Enterprise products for Small Business. Let's stop that, and do more for Small Business than we do for Enterprise - It's where the majority of US Jobs are coming from. No more SMB product that's just Enterprise product with Feature lists slashed. Let's do more with Small Business Server, it's a killer product.

Stop these goddamn betas and CTPs. They're killing the company. People see the product too early on and piss on it. Vista is a fantastic example of how not to release a product. With builds leaked and released on a near weekly basis, there's no surprises or buzz to generate anymore with the exception of screwups and crashes. The company is now getting slammed when one beta doesn't work well with another (Even when there's planning for them to at a later date) Involve real customers but make them sign NDAs - 15 year olds with blogs and a home built machines with neon lights in them are reviewing our products online and distorting the focus of our products.

We need a big push in Education for our platform. The majority of colleges pay us lipservice and then teach the kids with Java, Linux, Oracle and C++ We need a lot more Dot Net Developers. The Express products are a helluva start but, we're not there yet.

Bill needs to stop with the keynotes. He's as interesting as watching paint dry. We need to find the next Steve Jobs who can dazzle the customers with bullshit and generate a buzz - and that means keeping out mouths shut about products until they are out the door.

Create an Open Source Linux Distribution - if only to give the slashdot crowd something to moan about.

Release Windows 2000 for free to developing nations. Stop this crap with cellphones and TVs, or renting them software. We need to build bridges with the developing nations, this is where our next customer base could be.

Get the documentation done on the EU Compliance thing. This is a millstone hanging around our neck and no good will come of it until it's completed.

Dump 15 percent of the cash to long term stockholders and non-partner employees. Show the world that loyalty is appreciated.

Quit the comparisons with Google. They do search. We do everything. They are starting to piss people off too. A couple of years of Microsoft flying under the radar and they'll be the big bad enemy.

We lost the Portable Music war. Find a way to get WMA content on an Ipod and stop pushing the crap from the Hardware OEMs - they're wasting their time.

Ok - That's my rant. What do you think?

Anonymous said...

>>The towels became the symbol of poor leadership. That and the office-supply hide-and-seek.

Going back further, how about the shredding paper towels in the bathrooms, Talking Rain in plastic bottles, spicy-hot V8, et cetera....

Anonymous said...

A nice summary of Microsoft's problems here:

http://toorg.blogspot.com

Anonymous said...

I'm not an MS employee. I use WinXP (home) and Win2K (work). I think MS is too big. There is a limited sized market, and MS has too large of a share of that market.

The company needs to divide itself. Home products, Biz OS, Biz Applications (including Office), Net software (including IE/OE/Outlook), XBox, MSN -- six separate companies, with separate ownership, management, goals, and futures.

Right now, other companies are afraid to partner with MS, fearing that they will be the next WordPerfect to be turned on and devoured. If Office was separate from the OS company, then competitors to Office would be more willing to work with the OS company.

Likewise, the Business Applications (Office) company would be able (and hopefully willing) to compete on other OS platforms. Maybe they would be willing to adopt ODF instead of that truly awful OpenXML format.

The big antivirus and antispyware companies are now shaking in their boots, seeing already that they are the next targets. There are definitely things that can be done to make the OS more secure, but this seems to be invading turf solely because growth is stagnant.

For you employees, your work has truly been helpful in making computers easier to use for the masses. Let's hope that the company will make the changes needed to continue that work.

Anonymous said...

For every Mini-Microsoft and other anonymous employee posting on the blogs, there are many, many more employees inside the company that are helping to make the changes that are needed to bring Microsoft back from the brink. It started in late 2004 (mini certainly had a seat at the table) and really kicked off at Bill's Winter Thinkweek in Jan 2005. People captured the problems that were facing and published them for all to see. When the changes were made to the HR leadership (behind the many stupid changes that impacted employees) and LisaB was promoted, it was a real change on the move.

And the towel thing? How many employees really lost any sleep over the towels missing from the showers? (I bring my own.) I do get that it's more of a statement. I would much rather have seen the old ESPP program reinstated than the towels.

LisaB has listened to employees, and is the driving force behind many changes... some that SteveB and the execs may not agree with at first look. Many of the 5,000 regular employees who attended Lisa's listening sessions were the ones who helped make the changes happen.

And I agree with anonymous ("stuffed polo shirt working in a Fortune 500 company"): let's get some work done here and kick some booty. We will improve change the world. Change isn't what the company does for you, it's what you make of the company and the products we produce. If there's crap coming out of 98052, it's not due to Steve, Bill or any of the presidents. it starts with each one uf us: the employees.

One exec said this week, Ship It, don't Ship Sh*t. I agree.

Anonymous said...

"I've read enough here. I'm getting really tired of the complaining. The party is over guys. Congrats, you're an stuffed polo shirt working in a Fortune 500 company with all the bullshit that that entails. Now, can we get some work done here?"

Translation: I'm getting paid to build my little personal empire. I don't produce shit, but I still get paid. Could you people stop talking about these problems so I can stop worrying that someone might notice that I don't really produce shit but get paid well?

Microsoft is producing worse and worse products by breaking previous products and bloating .NET 2.0 broke so much existing code that it isn't funny. Seriously, the industry is pissed. Microsoft doesn't notice and doesn't want to. No one is particularly responsible so no one gives a damn. Their little empire within Microsoft is getting paid so who cares how the product turns out. That’s some one else’s fault. People add their crappy little 2 cents worth to a product then claim what great features they produced.

Microsoft should have a 50% RIF immediately. People should get back to producing solid products and not producing personal empires. Most of Microsoft’s gain in product “features” seems nothing more than academics. Solutions looking for problems; empire building.

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