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The Microsoft Salary and Review System
f1055man writes "If you can make it through the obvious bias, Washington Alliance of Technology Workers (WASHTECH) has put together a revealing article on Microsoft's salary and review system. 'Internal Microsoft documents obtained by WashTech News show that Microsoft salaries have been stagnant or nudged only slightly higher over the past two years. Comments from current and former employees about the company's compensation and performance review system suggest a growing level of frustration among rank-and-file workers.'"
It may be for nerds, and it may at some level matter, but it's not news.
Whats the difference between a sweeper who is working very hard expecting a bonus at the year end and a programmer who does the same ? Whats is required is a difference in thinking. Never work expecting something. Work honestly and sincerely and do your best. In the end if u dont get the recognition u expected, move on... The important thing is being your own boss. Think of the value you are generating... If the company doesnt recognise it, maybe its time to realign yourself with the corporate goals, do some soul searching too. In the end, maybe it just maybe the time to move on...or better still start something on your own.
I have a big problem with salaries in the U.S. -- employees believe they have a right to a raise every year, even if they are not providing more service or helping the company with added efficiency.
The big problem in the States is the government's crazy dollar creation (what we call inflation is directly caused by the Fed's out of control printing of dollars). This inflation creates cost of living increases (including the housing bubble in my opinion). Because of this inflationary cycle, people demand cost of living increases.
For my businesses, I pay my employees the lowest salary possible, in some cases minimum wage. I myself only earn minimum wage. Yet my employees also get a much larger share of profits, up to 70% on a given project. They are directly tied to the performance of their work, as well as the performance of the market. I'm one of the lowest paid in my IT business (although I also do less work than most).
To get raises, your company has to be making more money in terms of net profits. Microsoft is a company that has to constantly find new ways to profit in order to grow. With the added competition in the marketplace, it surprises me that slashdot geeks constantly berate Microsoft for being a monopoly when they have one of the most volatile markets to sell to -- they're constantly having to find ways to keep customers happy.
I wouldn't work for (or invest in) Microsoft or any large tech company. The red tape and bureaucracy is enormous, and the management system is bound to fail at multiple places when their market turns.
If you are an employee of a company that isn't getting a raise this year, consider the realities of your market:
1. Is your company growing?
2. Is the growth reflected in real profits?
3. Does your company see a volatile near-future that they need to save for?
4. Are you personally more efficient or creating more income for your company?
5. Is your government printing more currency than the economy needs, causing inflation in consumer and housing prices? Does this inflationary cycle hurt your employer?
6. Is your employer's tax burden increasing even if they're paying you the same? Is this increased tax burden causing you to earn less?
When you're an employee, you put off the reward of a very high salary by hedging against the risk of running a business. Some people believe a business' only goal is to generate profits for the owners, but this in totally untrue. A business operates to generate profits in the long run, not the short run. The only way to profit in the long run is to make your customers happy and return for more. Also, the only way to profit is for your employees to be operating more efficiently (more work or less cost) than your competitors. Profitable years might be needed to cover unprofitable years, so you can not focus on only one year or 5 years -- you have to look at the overall picture. When you take a salaried job, you give up having to worry about these things in exchange for job security.
Sometimes you won't get raises, but the world will get more expensive around you. You can almost always blame across-the-board cost of living increases on the guys printing the money. Across-the-board prices don't go up unless the money supply goes up. Don't blame your boss for not being able to compensate for these mistakes made by the central banks.
"I love working at Microsoft but cannot stay in an environment where I am treated shabbily and afforded no opportunity to defend myself against such treatment."
So are we to deduce that this person at one point loved working in an environment where they were treated shabbily and could not defend themselves? Or they did not know this was the culture at Microsoft and later found out the hard way?
The whole quote about favouritism in reviews (unfortunately) rings true about many companies, not just Microsoft. My advice is if you are unhappy - leave, no one is forcing them to work for Microsoft. And it might just be the best move of your life.
He who knows best knows how little he knows. - Thomas Jefferson
For all the talk about the economy picking up, jobs being plentiful and it being an employee's market, I have to say the raises for the past few years have been dismal at best. A raise of about 3% has been pretty much standard this year, which doesn't even keep up with inflation, let alone the rising cost of keeping your home (presuming you've bought one in this crazy market).
The value of my home just went up by $146,000 this year alone -- and before you start accusing me of being too greedy, know that I'm not interested in selling, just living here. All that extra value is pure fluff, the stuff that dot-com stocks were made of. The problem is, I'm being forced to pay property taxes that are going up at the rate of 25% a year just to keep my house. Fat chance trying to find a job where my income increases commensurately.
I've no idea what to do, and I'm seriously considering moving to India, and joining the growing contingent of foreign workers there.
Somebody explain to my why it seems that despite the dollar figure of my salary that's far above what my parents earned at my age, I still feel poorer.... and I'm a good saver!
I have a big problem with people like you who have that attitude. Have you heard of a cost of living increase? I have been working for three years without even one of those. In essence, although my value to my company has increased, they are lowering my salary.
For my businesses, I pay my employees the lowest salary possible, in some cases minimum wage. I myself only earn minimum wage. Yet my employees also get a much larger share of profits, up to 70% on a given project. They are directly tied to the performance of their work, as well as the performance of the market. I'm one of the lowest paid in my IT business (although I also do less work than most).
That may be great during good times, but what happens if your business falls on hard times? If you aren't compensating your employees appropriately, do you think they are going to stay? You see, salary is a form of compensation. If you don't pay your employees anything but or near minimum wage, you must not think very highly of your work. Just because an effort fails, does not mean that it was for lack of trying. Profit sharing should be an extra incentive to work even harder.
Its all very simple: if you are paid below your worth, look for an employer that will pay what you are worth. If you can't find one then adjust your concept of what you are worth.
There. One could even make a flowchart of that.
I strongly advise getting a passport and going to see how the rest of the world lives if you think 2-3% inflation is out of control.
What I'm listening to now on Pandora...
I have a big problem with salaries in the U.S. -- employees believe they have a right to a raise every year, even if they are not providing more service or helping the company with added efficiency.
Typically, technical employees DO provide more service every year, based on constantly learning how to do what they do better, as well as commonly picking up other skills from surrounding employees. In addition to this, many times, when an employee quits, it is up to the existing employees to pick up the slack, because the company won't hire a replacement, or hires an entry level replacement which can only pick up a small amount of the work that was done by the outgoing person.
In addition, every year, the cost of living goes up. Many companies consider a Cost of Living Adjustment a raise, but it is absolutely not. It just allows you to maintain the same style of living you had last year. If you do not receive even a Cost of Living Adjustment, your style of living must diminish, and your company is saying to you that you are worth less to them this year than you were last year.
You mention several things that may be affecting the companies ability to pay raises. Well, that's life. We justify high CEO salaries by saying that they take all the risk in running the business. But in reality this is purest BS. The employees take all the risk because they will be fired, not the CEO. They will not receive raises if money is short. Even if the CEO gets canned, he will get a glorious severance package. Plus, the fact that he was a spectacular failure as a CEO is worth more on a resume than if hw was a spectacular success as a programmer.
You also mention that businesses have to look long term, over 5 years or more. In publically held companies, I observe that the "public" will not allow them to look more than one quarter in the future. Investors will not allow them to spend more money on research or developing new products. Everything is quarter to quarter financials until the old products you have become obsolete and your business fails.
If you are not allowed to question your government then the government has answered your question.
The big problem in the States is the government's crazy dollar creation (what we call inflation is directly caused by the Fed's out of control printing of dollars). This inflation creates cost of living increases (including the housing bubble in my opinion). Because of this inflationary cycle, people demand cost of living increases.
I agree that the reasoning behind cost of living increases is somewhat circular. But this tail wagging the dog notion of inflation applied during the 1970's when US government fiscal policy was inflationary. That is no longer the case. We have plenty of other problems instead. The housing bubble was encouraged by persistent, historically low interest rates. It enlarged the number of buyers. It allowed people to buy up in value. Those same people continue to flip properties in the virtuous (I say vicious) cycle. Low interest rates are due to the insatiable appetite of export economies (like China and Japan) for US treasuries and other investments. They make enormous profits, they don't consume, so they have nowhere to put their money. You can't 'invest' in over capacity forever. They also have their own real estate speculation problems. At the moment we in the US are partying on their cheap money. Enjoy it while it lasts.
an ill wind that blows no good
You will not advance over the 50% mark of your company's pay scale. Since the 1990s, personnel and payroll departments in companies have instituted a graduated pay structure often called "Banding" or "Leveled Pay" to save costs. The concept behind these systems is to organize employees into similar grades depending upon job category and responsibility. A secretary and a construction worker may be placed into the same grade, while their managers and engineers would be placed at a higher grade. These grades span a set amount of money, so for example the construction worker may earn anywhere between $30,000 and $50,000 per year.
However, this system was also structured to keep dangling a carrot in front of the eyes of the employee. The midpoint in these systems is designated as the "market average". Therefore, if you are near this midpoint, you are considered "paid competitively" compared to the rest of the people in that niche market. This makes the possibility for future raises smaller or nonexistent. For the sample construction worker, this would mean that he would not advance above $40,000 per year. While you may believe that you have the possibility of getting up to the top point in the grade, the system is intentionally designed to retard compensation.
I welcome any thoughts if this could be stated better.
--Chag
Whats is required is a difference in thinking. Never work expecting something. Work honestly and sincerely and do your best. In the end if u dont get the recognition u expected, move on... The important thing is being your own boss.
Agreed, and this is what I *hated* about the review process. I spent a lot of time generating immense value for Microsoft. I helped bring success in a number of venues and yet any time I attempted to bring these up in review, I was *criticized* for helping out other divisions of the company. Something about me being an employee of my team rather than the company as a whole. My review scores were always 3.5.
I hated reviews. It was a process I generally barely tolerated because it turned the managers into backstabbing weasels. Interdepartmental politics always trumped the significant value of my contributions at a time when I was helping to write the strategy of competing against Linux (as a Level 54, no less). My managers would encourage me until review time and then cut me down in the review over it.
I personally will not consider going back to work at Microsoft. Even though I left largely due to personal issues that left me no choice but to quit, I would not willingly go back.
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