Going for gold

Getting the most out of your employees is not just about paying them fat
salaries – when people really enjoy what they do, the ideas begin to flow.  At least that’s the way Microsoft sees
things, DeeDee Doke quizzes UK director of people profits and loyalty Steve

When you work for a global giant such as Microsoft, your area of ideological
responsibility doesn’t end at a national border. Businesses built on passion
depend on their far-flung workforces to dream up ideas to propel them into the
future. And Steve Harvey, UK Microsoft’s director of people, profits and
loyalty, is banking on those in-house innovators to both drive an intra-company
revolution in workforce motivation and further the software innovator’s quest
for excellence.

Microsoft is, Harvey says, "a 50,000-person gold mine. Microsoft is
just waking up to just how important those people really are. No matter how
tough the business world gets, it’s vital that those people are really looked
after, and I don’t mean just in financial terms. It’s about allowing them to do
what they do best, every day."

Helping employees match their strengths with the work they perform,
conducting so-called leadership interviews to gauge leader skills and potential
and relying on current Microsoft employees to recruit new ones, are among the
tools Harvey is using to carry out his revolution from Reading, UK.

And it appears to be paying off. For Harvey, who could be easily be taken
for an especially dynamic health club manager rather than an HR executive, the
annual attrition rate is his bottom line. When your peak annual employee
turnover is still 14 per cent below the national industry average, someone is
doing something right.

"I’m on this mission with my people strategy, trying to get our
mentality adopted by a lot more people," concedes the former
self-described ‘finance guy’. "The whole mentality of the company is that
you can have the idea, and if it’s a good idea, it will fly."

Like the idea from Microsoft in Brazil, which hit upon the notion of having
a party to celebrate newcomers’ arrival to the company instead of splashing out
on a major ‘do’ when someone leaves. According to Harvey, Brazil ‘branded’ the
idea, complete with party balloons, and now such arrival parties are a
company-wide tradition.

Microsoft’s core HR philosophy is to hire and promote employees "who
not only have a passion for technology and an ability to develop great products
but who also have the skills necessary to elevate the level of performance for
their fellow team members", says Microsoft in the US. The idea is, the
company says, to "foster an environment where we make others great".

Company-wide, pay is based on job level and expected performance. The system
includes base salaries, a stock options plan and a retirement savings (or 401K)
plan, to which the company and individual employees contribute.

Unlike many companies which have resorted to lay-offs in the current
economic downturn, UK Microsoft has been hiring in the hundreds in recent
months, and Harvey hopes to hire even more. At the same time, part of the
company’s success in weathering the storm is its partner-driven model which
allows Microsoft to select and work with industrial partners that "can win
off the back of us, too. We’ll never have more [Microsoft] people than we need.
We keep staffing levels at an absolute minimum because of the way we pay them,
with stock, so the rest of the world can be scaleable – not us."

In 2000, when UK Microsoft’s attrition rate reached its highest ever annual
figure of 5 per cent, the plummeting value of Microsoft stock – from $120 to
$40 per share – in what Harvey calls "a very short period of time"
was largely to blame, he says. However, money is not the primary motivator for
most of Microsoft’s workforce, as company surveys show.

‘Passion’ is a word often used by Microsoft executives to describe a key
characteristic of the company’s employees. And the presence, or lack, of
passion is critical in whether or not to hire a particular applicant. "For
us, it’s the passion for technology, passion for helping customers achieve
great things with software. It’s not how good your CV is, necessarily,"
Harvey says. He adds, smiling but not joking, "Otherwise, they’d never
have hired me."

However, the enthusiasm for passion muddies the Microsoft waters when it
comes to considering work-life balance – one of the most resounding buzz
concepts of the early 21st century. For many technophiles and today’s
Generation Y, the line between work and life is so fine as to be virtually
invisible. When is work work, and when does work become life? Who determines
the right balance? Harvey’s approach is to encourage employees to take control
of their lives, whatever their personal definition of control.

"We hire very driven people. They’ve always had a work-life balance
issue," he says. "Probably since the age of 13 or 14, they’ve had
extra jobs, extra projects going on, all sorts of things happening in their
life, lots of qualifications.

"It’s not wrong to work hard at Microsoft for five or 10 years. If the
model works, you get well rewarded. I’d rather do that than work 30 years at 35
hours a week, week in and week out. I’d rather work hard for the period of time
that suits me. So we try to make it a 50:50 deal with the company – you can get
as much out of Microsoft as you put in.

"Where it goes wrong is if you forget to take back out and you just
keep putting in. We try to make sure that doesn’t happen."

Harvey’s concept for running his operation in Reading, a short commute from
London, is to create an environment where the 1,600 workers can do their best
work. One facet of Harvey’s approach aims to remove the kinds of everyday life
inconveniences that can take a worker away from their desk and the worksite or
distract their concentration from the job at hand.

Among these amenities is an on-campus well-being centre where in addition to
having access to ‘wellness days’, workers can even get their holiday
innoculations. A concierge service is being piloted with executives and
employees who report directly to Harvey, including his personal assistant.
"In the first three months, we’ve saved more than 100 Microsoft
hours," he says proudly.

Instead of worrying that they could be replaced by such a service,
Microsoft’s PAs are eagerly signing on to take advantage of it. Making what is
basically an errand-running service available to administrative staff, instead
of just senior executives, allows them to better use their day, thereby
benefiting their bosses. "It means PAs can add even more value,"
Harvey says. "My PA uses the service as much as I do and it has enabled
her to better organise me every day. I was worried PAs might see it as a
threat. In fact, they use it more than the managers."

As to helping all Microsoft employees deliver more value, Harvey is
convinced the real answer is to ensure that each does what they do best every
day. To that end, he is using a Gallup tool called Q12 to gauge Microsoft
employees’ belief, on a scale from 1 to 5, that they are employed to that end.
Typically, such a survey finds that any given workforce will average a 20-22
per cent segment which feels they get that opportunity. "If you want to be
a finance person, and improve the productivity and profitability of a company,
and you can move that number from 22-50 per cent, then imagine a world where
you’ve got 50 or 60 per cent who do what they do best every day," Harvey

"One hundred per cent is probably unrealistic, but to move to that sort
of level, that’s where you get huge profitability or efficiency gains in a
corporation. Imagine being at work with all your friends around you, who are
doing what they do best and they love being there, and they know why they’re
there," Harvey continues.

He plans to run a Q12 survey at Reading within the first quarter of this
year, with an eye on bringing that operation’s level to "40, 50 or 60 per
cent over the next few years. Big challenge".

"But put people in a job they really love, and then you’ll see the
difference. That’s what I enjoy watching," Harvey says. "That’s why I
get up every day. My personal mission in life is to help people achieve things
they wouldn’t otherwise do."

Within his "people, profits and loyalty", or HR department, Harvey
says HR people can only succeed in having a positive impact if they "wake
up worrying about the things" that worry Microsoft’s other
departments" – business strategy, for example, and the bottom line.
"So it’s very important that my people are actually out there living and
breathing the experience. The hard thing is, how do you get them to be close but
remain independent? You have to have that little gap: ‘yes, I’m with you in the
business but I’m also here to protect the interests of all the employees at the
same time.’"

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