Microsoft CEO Steve Ballmer just sent out an internal memo promising "significant investment in overall compensation."
The new money will mostly come in the form of more likely-to-be-paid bonuses.
"We are increasing funding for our bonus and stock awards so we can deliver 100% or more of target bonus and stock awards to 80% of our eligible employees," writes Ballmer. "This is up from about 50% in prior years."
As a part of the deal, employees will get less stock and more cash.
Ballmer is also getting rid of Microsof't current employee reviews system, in favor of "a single performance rating with clear rewards."
The war for talent is exceptionally competitive in tech right now. Last fall, Google gave all of its employees a spontaneous $1,000 bonus and 10% raise.
Here's the whole memo via GeekWire:
Reviews. We are retiring our current system (commitment rating and contribution ranking) and moving to a single performance rating with clear rewards. We are making this change so all employees see a clear, simple, and predictable link between their performance, their rating, and their compensation. Each rating at each level will now have set compensation tied to the rating.
These ratings will be based on the results you accomplished during the review period (assessed against your commitments), how you accomplished them, and your proven capability. Ratings will be a simple 1-5 system with relative performance being assessed across common peer groups.
Compensation. We are increasing our investment in compensation across the board.
The following changes will take place at review this September:
* For all employees, we will have merit increase opportunities aligned with local market dynamics and performance rating.
* We will make important increases in compensation for specific populations where the market has moved the most – early and mid-level R&D, mid-level company-wide and certain geographies.
* For all employees, we will shift a portion of stock award targets into base salary, providing more cash up front and obvious incremental employee value. Senior leaders will continue to have a large portion of their overall compensation in stock to ensure their compensation is heavily tied to the financial performance of the company.
* We are increasing funding for our bonus and stock awards so we can deliver 100% or more of target bonus and stock awards to 80% of our eligible employees. This is up from about 50% in prior years. The additional funding ensures our approach continues to support higher payouts to top performers.
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