Performance Appraisal in Microsoft Corporation

The human resources department is considered one of the key support factors of a company from the highly competitive and unstable business environment. The companies have recognized the growing dependence on qualitative and satisfied employees, while at exactly the same time they concentrate on expanding techniques and ways of managing their human resources. Recruiting management considers the employees as its most important asset, which are capable of giving to the company a energetic and sustainable competitive benefit. The decisions related to the Human being Resource Management are necessary for the completion of business strategies. Among the most crucial functions of Management is the planning and analysis of human resources.

This paper focuses on evaluation methods which have been developed by theoretical and functional researchers and how these methods are put on Microsoft UK.



Performance evaluation is the process whereby organizations examine the performance of employees. Provided that it is done correctly, the employees, their supervisor, the field of recruiting and the company as a whole reap the advantages of realizing that their individual work donate to the achievements of strategic aims.

Of course, the appraisal is influenced by several other activities that take place within the business and can affect its success. Performance appraisal is performed in Microsoft UK. Senior managers' performance is evaluated one per year, whereas the other employees' performance is assessed twice annually. Direct Reports to the Managing Director are assessed by him/her one per year, and they're the only real ones that can evaluate the performance with their immediate supervisor, i. e. the Managing Director.

Objectives Assessment

Apart from the accurate and objective way of measuring of performance, specific aims of this process are

1. Decisions regarding campaigns, salary boosts, layoffs, etc.

2. Identify training needs.

3. Performance improvement and development of employees.

4. Determining the validity of the techniques of staff selection.

5. Better interior organization of the company.

6. Establishing a specific and acceptable system of calculating performance.

The performance appraisal is not usually an overall assessment or an over-all information of the worker, but it concerns specific dimensions. These dimensions derive from the work analysis and are related to specific skills that the staff must have.

Every staff of Microsoft UK has employment evaluation and the targets of performance appraisal are relative to all these.

General categories

The examination methods can be divided into two categories

The objective methods are based on measurable conditions and data (e. g. ratio of sales, variety of products produced, the amount of mistakes, etc. ). A key drawback of objective methods is the fact they cannot be applied to professions where in fact the productivity is qualitative in aspect (e. g. secretary, directors, etc. ), but also when doubt factors, beyond your control of the individual, influence the produced outcome.

Subjective methods are applied more frequently and involve the use of some judgements usually created by supervisors to their personnel. However, the subjective methods cannot ensure the overall reliability of the results of the appraisal, since they can be inspired by the prejudices and biases of the evaluators. For example, an assessor can be affected by an individual aspect, either positive or negative about the image of the person being evaluated and this judgement can affect all other aspects. Furthermore, professionals often desire to show leniency or even to avoid the displeasure of their subordinates, so they make fewer negative appraisals or have a tendency to rate all subordinates in the common.

In Microsoft UK both goal as well as subjective methods are used in employees' performance appraisal. The worker writes the duties that s/he is going to perform within the next half a year and what s/he wants to accomplish from them and has got the authorization or remarks on these from his/her immediate supervisor. In the appraisal period, the worker assesses himself/herself according to the goals achieved, then s/he discusses his diagnosis with his/her supervisor and provides the appraisal make.

Employees' performance is placed from 3 to 5 5, whereas three shows the least accepted staff performance and five the best. Most employees get 4, which is the average for the reasons mentioned above. To be able to achieve objectivity, objective methods are used to a big extent, whereas the utilization of subjective methods is minimized.

Appraisal Process

Creating a reliable method of employees performance appraisal is a hard task and is dependant on lots of key procedures where

The first step is to analyse the task of a particular position (job evaluation), for the easy reason that before someone is judged along the way s/he acts, it ought to be clarified what is desired from him/her. Such an analysis aims to review the responsibilities and activities, the monetary resources, the way to achieve the goals and their importance, and finally it includes this is of knowledge and skills had a need to carry out the duty successfully. In some occasions, it was pointed out that the job analysis for certain positions in Microsoft UK was somewhat vague which resulted in having difficulties in appraising specific employees. An issue that occurred quite often was the number of responsibilities that an employee should have. In some events, the staff was appraised for responsibilities that s/he could not do since s/he got limited authority to execute.

Then, the results or attitudes that lead to the successful project execution should be decided and weighed, as much as possible, according with their contribution to success. The weighting can be done corresponding to estimations or in line with the contribution of these data to the costs or earnings of the business enterprise. This has been proven particularly difficult for qualitative positions like the Licensing Director and/or the Antipiracy Director, etc.

Finally, ways to measure achievement of the performance appraisal methods are located, after having averted errors which could decrease the trustworthiness of the evaluation.

Limitations of the performance appraisal process

Many factors from the internal and external business environment impact the performance appraisal process. As key external factors may be looked at the staff unions and the law, whereas as inside factors may be considered the culture of the business and the increasing use of teams for the work execution. In Microsoft UK, there are no worker unions and since a multinational enterprise is incredibly careful to any legalities. The culture of the business, although it stresses staff initiatives and team work, maybe it's said that it is rather rigorous and the worker must follow the hierarchy instead of taking 3rd party decisions. This actually is a hindrance to staff empowerment.

Legal restrictions

The form of assessment chosen by the company should be reliable, accurate and most importantly legal. Normally, the conclusions would not be a reasonable basis for decisions on issues relating to employees and potentially regulations such as similar employment opportunities may be affected. Such issues happen when a worker is dismissed, demoted or his/her campaign is not realized.

Microsoft UK is particularly careful on issues such as racial, religious and intimacy discrimination. All employees acquire equal treatment regardless of their religion, contest or making love. However, it is noticed that top management positions are typically occupied by white guys.

Evaluators' prejudices

The challenge with subjective methods is the possible influence of the outcome by the evaluators and the personality qualities, ideas and thoughts that they have, or even the sort of relationships they may have with the evaluated employee. Working out of managers that carry out assessments will help to reduce subjectivity.

So considerably, only the Managing Directors of all subsidiaries have obtained training on worker performance appraisal and even though subjectivity is not reduced, it was taken out to a big extent.

The training should be broadened to the other managerial positions since it has been noticed that subjectivity played an essential role in subordinates' performance appraisal.

The error of the central tendency

Some reviewers do not wish to present employees as completely effective or inadequate, and so they rate everyone close to the accepted average, something this is the case in Microsoft UK. The conclusions provide assessments that aren't equivalent with themselves, and they are unsuitable for statistical research or other purposes.

Grace and rigor

In the first case, the assessor makes the diagnosis with relative efficiency and ranks favourably while the opposite happens with the director that seeks to appear 'rough' which is negative in appraising employee performance. Ramifications of grace and hardness are extreme, leading to grievances and problems and are usually shown in companies with hazy ideal performance levels.

This is also the case with some qualitative careers in Microsoft UK where as the performance levels were obscure, the line of responsibility was also obscure and the employee was subject to the assessors' personal grace or rigor.

Intercultural effects

Everyone expects others to develop responses and behaviour predicated on his/her own culture. Problems come in the cases where people from different nationalities have to work together. Microsoft is a multinational company and people from different nationalities have to cooperate. Up to now, there has not been a particular programme aiming at training visitors to work with people from other ethnicities.

Personal bias

Negative perceptions associated with an evaluator for a group of individuals can distort the score they receive. For example, it has been detected that some male supervisors are unfair to women subordinates who maintain traditionally male jobs. The sensation of discrimination between women and men is something that still is accessible to a lesser degree than before.

Effect of recent past

When subjective methods are used, the credit score is heavily influenced by the recent serves of employees, either positive or negative, which will tend to be remembered by the evaluator.


Rating Scales

It is the oldest and most frequently taking place performance appraisal method that requires the life of an evaluator who gives a rating for the performance of each employee based on a scale which range from the cheapest to the highest level. The analysis relates to the personal views of the evaluator and in some instances the criteria may well not be straight related to the work. In a very business, the position will be made by the top who chooses the most appropriate one with respect to the behavior of the worker with regards to each criterion. The reactions of the assessor can be linked to numerical values allowing this way to export average results for each employee which can then be compared. This is directly related to the incentive system and salary increase. Other advantages of this method is the low development and management cost, the actual fact that the evaluators do not require significant training or a lot of time to complete the relevant standards form in adition to that it could be applied to a large volume of employees. The negatives are also fairly. Prejudices, perceptions and personality features of the head may have an effect on the analysis to be made as well as the partnership s/he has with each subordinate. The format of the analysis form and the conditions selected may not signify or be similarly very important to all careers.

This is the performance appraisal used for any Microsoft subs.

Critical Occurrence Method

The evaluator observes and details very good and bad behaviours of the individual employee that happen during the period the appraisal takes place. The recorded happenings are accompanied by detailed and correct explanations whereas the remarks on the part of managers should be produced on a daily basis. The observations are grouped based on the criterion which such cooperativity, work quality, steadiness, etc. and then conclusions for the worker are attracted, his/her strong points as well as the details that need improvement. Employers often utilize this method in addition to the method of rating scales method. This ensures that the supervisor feels of the subordinate over summer and winter because these occasions need to be accumulated. Therefore, the scores do not only represent the recent performance of the worker. The most readily useful feature of the method is to attract conclusions directly related to the work and benefit particularly the employee. In addition, it further reduces the result of personal bias of the head when carrying out the examination as it happens in other styles of appraisal methods. The main drawback is the inclination of assessors to record events in the beginning of the appraisal period, followed by a blank space where they overlook their duties and when the time of appraisal comes, they monitor and record behaviours. In cases like this, the assessor is damaged by the incidents of the recent past and the effect can not be objective. The method of critical occurrences consumes much of supervisor's time which is relatively have your final image of the staff since this is based on recent activities and events. Naturally, since many reviewers find difficult to keep in mind all the reality relating to each staff throughout the diagnosis period, a calendar of critical incidents can be a very helpful support tool for the other diagnosis methods.

This method has been used in Microsoft UK in combination with the ranking scales method, usually for qualitative careers. However, all the negative areas of it appeared as stated above. Furthermore, it has been demonstrated inefficient for very experienced and high skilled personnel.

Field review method

Under this method, a specialized exec visits the office and aids supervisors in the performance appraisal process. The professional derives information about the employee's performance, s/he techniques them, and then s/he ends up with the appraisal of each worker. The appraisal report is sent to the supervisor, who makes changes, remarks or notes as accepts it as it is and then communicates it to the staff. The advantages of the technique is the formality of the procedure, better objectivity and reliability of results because the personal element of the supervisor is limited to a certain as well as the uniformity in the evaluation of employees. Although the method reduces the subjectivity of the immediate superior and surpasses his/her potential weakness of being unsure of how to determine an employee, it has, however, the following down sides: a. the energy and the role of the supervisor are reduced b. it requires an exec from the RECRUITING department to learn lots of the characteristics of the work for which s/he will assess the employee c. it takes longer and costs more, and d. it may bring into conflict the special assessor with the immediate supervisor.

Since a whole lot of problems appeared in the past with the ranking scales and critical event way for qualitative jobs, this method is used in combo with those to avoid supervisor's subjectivity.

360 Level Feedback

The 360th evaluation can be an appraisal form where someone is appraised by assessors from different hierarchical levels, departments and s/he even does self-assessment.

In the employee performance appraisals the assessors may be same get ranking managers, subordinates, immediate or dotted managers, business professionals and even exterior lovers. In its 360th analysis, self-evaluation is out there and it shows the variations from the appraisal of others.

The results of the assessors are grouped aiming at finding what others think on specific points of our performance in relation to what it is believed by the employee and his/her supervisor.

It is ways to have feedback about how others understand the employee's behavior.

The name "360" originates from the 360th degrees of the group. The staff gets feedback anonymously examined by the immediate supervisor, subordinates, same ranking employees or other colleagues, customers and partners outside the group.

The 360th assessment is recognized as the most objective way for appraising the performance of employees. A uncommon number of assessors per worker is from 8 to 15 people.

Balanced Scorecard

Today, the management of a business requires the simultaneous monitoring of information regarding its performance in a number of areas. The monetary indicators alone aren't sufficient, because they indicate the monetary performance of the current time, or the consequence of the past economical performance of the business. They do not rely, i. e. , the contribution of "intangible" possessions that are essential in a company's distinguishment, like the understanding of employees, the level of satisfaction and the degree of customer loyalty, the business procedures and the organization culture that encourages innovation. The technique of Balanced Scorecard (BSC) was created by Kapla and Norton, to give a solution to this very problem. Predicated on the assumption that what's measured becomes a tool to incite shareholders to do something and thus it affects the results, the methodology proposes a couple of indicators explaining the "intangible" possessions, and that happen to be combined with financial signals offering this way a more balanced outlook. Specifically, the Balanced Scorecard allows managers to observe their business through the next four perspectives, providing answers to four key questions

- How our customers see us? (Customers' perspective)

- Where should we be different? (Internal perspective)

- How can we continue to improve and create value? (Control and learning perspective)

- Just how do we may actually our stakeholders? (Economic perspective)

The technique will go beyond observation and to the drawing of conclusions about how to achieve improvement in each one of these areas. With the implementation of Strategy Maps», companies can assess, evaluate and upgrade the most significant functions, and guide in a suitable way their investment in individual source development, information systems and organizational systems and set ups of providing competitive service with their customers.


Businesses need to remain competitive to make it through in the period of free market and globalization. To stay competitive they need a constant development of their recruiting. A dynamic system for development is the performance appraisal. The appraisal should be thorough and ongoing. With performance appraisal is intended a system of researching and assessing the work performance of an individual or an organization. However, most companies concentrate on the performance appraisal system of every staff whereas the performance of the team should also be assessed.

The performance appraisal functions several important goals. It also provides employees and the business data on current performance and is also a means where companies converse their future prospects. The basic necessity would be that the objectives of the company and the worker should be identical. It also provides information that helps in the introduction of employees.

Each method has positive and negative elements, therefore an appraisal system that uses a mixture of different appraisal methods can become more goal and less inspired by the typical errors of the appraisal process. Microsoft UK uses blended methods which have not been proven very successful, therefore a mixture of the 360 evaluation and well balanced scorecard is suggested since they are considered as the most effective performance appraisal methods.

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