The snap reaction from Microsoft employees to today’s raise: nobody saw it coming. But they’re still not sure it will be enough to keep people from leaving.
One staffer said that he was pleasantly surprised, but also said the change was overdue. The company has been dealing with negative feedback about compensation during employee reviews for the last few years, and had to make a move now or risk losing more people to startups and other companies where the stock is rising.
The change puts more compensation in cash rather than stock — reflecting the fact that Microsoft’s stock price hasn’t moved much in the last decide.
As Microsoft HR director Lisa Brummel put it in a video to employees, the change offers “a better cash experience.”
The change also increases the amount of money put into bonuses, so that more than 80% of qualified Microsoft staffers will now get their full available bonus and stock awards. Previously, only about half of employees got their full available allotment.
Another person at Microsoft said the news was having a lot of impact — as you’d expect from any announcement of a raise — but individuals are still figuring out exactly how it will affect them. It seems a lot more complicated than Google’s December announcement of a 10% raise across the board for all employees.
In 2009, Microsoft temporarily eliminated merit bonuses as it shed more than 5,000 employees to deal with the recession. Last October, Microsoft said that employees would have to begin contributing more to their health care costs starting in 2013, cutting into one of the best perks of working for the company — Microsoft’s health plan was famous for its generosity, covering a huge range of procedures and requiring no out of pocket payments.
Anonymous employee blogger Mini-Microsoft discusses the changes in more detail here, and welcomes the new simpler ranking system.