Creating a Compelling “Employee Value Proposition”

2. Creating a Compelling “Employee Value Proposition” Rose Clements HR Director Microsoft

3. A Recipe for Success... Step 1 : Understand Talent Step 2 : Know Why People Stay ... And Why They Leave Step 3 : Get Personal Step 4 : Create a Strategic Plan Step 5 : Make it Real

4. Step 1 : Understanding Talent “Human Resource Management becomes the business strategy when knowledge workers are the winning resource for an organisation” Adapted B.Groysberg, 2005 Harvard Business School • The most productive employees are about TWICE AS GOOD as the least productive • In Knowledge industries stars’ impact is out of proportion to their numbers • R&D : Top 1% : 5 to 10 times • Computer Programmers 8:1 • Analysts : Top 5% : 6 times

5. “Nature vs. Nurture” : The Theory • Nature • Star performers are born • Managers attribute the differences in productivity between star and non-stars to differences in in-born traits • Managers will hire large numbers of workers, hoping that with some luck, some stars will emerge • “Magic bullet: : An in-coming star will quickly bring in huge business • Nurture • Star performers are made • There’s little difference in the cognitive abilities of stars and average performers • Stars can be developed through training, mentoring and incentives • Stars are dependent upon their surroundings and environment

6. “Nature vs. Nurture” : The Reality • Stars’ performance is NOT portable across firms • Stars need to learn the new culture and develop workable relationships – very time consuming tasks • Even with developmental guidance from the organisation, stars still face stiff odds • Stars show resistance to change, believing that they have little to learn • Stars have invested in a “recipe for success” which they are fearful of tampering with • Stars who switch employers show an immediate decline in performance which can persist for up to five years Growing & Retaining Talent is a Commercial Imperative

7. Step 2: Knowing Why People Stay ... Systemic Variable pay to reward contribution Informal Market competitive fixed pay Formal Pay Recognition Variety / Quality Support throughhard times Work / life balance Natureof work Ability toimpact Employee Value Proposition Time forrelaxing Network / access to Leaders Careerpath Time forwork study Challenging work Global, Lateral, Upward Transparency of promotion path Development

8. ... And Why People Leave Pushing Factors ... • Don’t enjoy the work that they do • Poor work-life balance • Not a good values “fit” with the culture / industry • They do not like / respect their manager (# 1 reason) Pulling Factors ... • Career growth will be better • Compensation & benefits are higher (real or perceived) • Skill marketability • Competitors brand and reputation

9. Step 3 : Get Personal • People are individuals first and employees second • Trust them • Help people say “YES” to these four key questions: • Do I know what is expected of me? • Does my Manager care about me? • Am I a good fit? • Can I see a future here?

10. Step 4: Create a Strategic Plan MyMicrosoft

11. Focus on What Matters Most ... Differentiated Reward for Performance Coaching & Mentoring Flexible Working Options Congruent System & Symbols Leadership Behaviour Global Mobility Initiatives Training & Development Career Path Planning Citizenship & Community Efforts Diversity Strategies Benefits Choice Recognition Programs

12. ... To Build an Integrated Approach Fixed Variable Benefits Recognition & Reward Managers & Above Remuneration Packaged Benefits Profit Share Additional Company Benefits Formal & Informal Recognition Below Manager Discretionary Bonus Development & Career Path Planning Nature of Work / Job Design Work / Life Balance Brand, Citizenship & Culture

13. Step 5 : Make it Real • Be Curious • Leadership Commitment – are they up for this? • Building Management Information • Avoid defensiveness - See “the Gap” as an opportunity to improve • Invest in People Managers • Prioritise • “Show me your cheque book and your diary and I’ll show you what you value”

14. Final Reflections • A Clear People Strategy is an Essential Commercial Imperative • Good Diagnostics are Critical • Invest Purposefully • The Grass is Not Always Greener • Managers Matter • Get Personal

15. What’s the Prize? “Every day I face new and different challenges. Every day I learn something new from an avenue I didn't expect. Every day I grow a bit more in myself, as I understand more about myself and how I react to different situations and pressures. Every day I report to an open and respectful manager, who encourages and motivates me to achieve. Every day I meet new colleagues who are intelligent, dynamic and passionate about what they do, and who vary greatly in terms of experience and background. Every day I speak to customers who are genuinely happy to have impactful and important conversations with me about how our technology can help them to improve their business in better, faster ways. ... And every day I love to come in to work.” Microsoft Employee (Anonymous), Source : Hewitt Best Employer Survey, 2007