Here's an edited transcript of Ben Romano's interview with Microsoft's Lisa Brummel about the major changes she's implemented in her 18-month...

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Here’s an edited transcript of Ben Romano’s interview with Microsoft’s Lisa Brummel about the major changes she’s implemented in her 18-month tenure as the company’s senior vice president of human resources. The interview took place Sept. 28.

Q: You’ve received a lot of praise and achieved a high profile as a human-resources executive — some have said you’re one of the highest-profile HR leaders that this company has had in recent memory. Are you surprised at that kind of recognition from the rank and file?

Lisa Brummel: When I took this job, I felt like we were missing that culture and that drive that I knew was there, that hadn’t been released yet. I really am not surprised. I’m not sure I deserve the praise, but I am invigorated by the fact that employees are again saying, “Hey, you’re right, I do love working here.”

Q: Would you agree that myMicrosoft is the biggest and most noticeable change you’ve implemented?

LB: Sure. It’s the most visible. It’s the thing that people can point to. And I think this is one of the things that we’ve been lacking over time. We haven’t had a regular rhythm of showing employees, and having employees participate in what they get here. …

I’m heading into my 18th year here and there’s been a lot of great HR initiatives. There are a lot of things that we’ve done with employees, but we’ve done them in a singular fashion. We’ve never rolled them up and said, “This is about you. … You get to have an opinion about it.”

Q: By mid-September, everybody should have had their review done, gotten their bonus and merit pay and know how they’re doing under the new system. What’s the feedback you’re hearing from people on myMicrosoft?

LB: I’ve gotten incredibly positive feedback from managers because we’ve given the opportunity to really look at someone’s performance and we’ve given them tools to look at that in as positive a way as we possibly can, and we’ve helped them give better feedback to employees about where they are and where they’re going without the penalty of a number having to be associated with that….

I’ve gotten generally positive feedback from employees. I think employees are still trying to understand what the implications are because with the first version of anything, you know, they have a certain experience — they like it, they don’t like it, they’re confused by it. Then they want to know what it means. Is it something that’s going to propel me to the top in my career, is this going to slow me down? And, in fact, we don’t know, because everything will build on what we did this year, next year, and the year after, and the year after, and we’ll start to create a new pattern for how people will move through their careers at the company. …

I’ve gotten a lot of great feedback from employees just from the change itself.

Q: Can you say whether under this system employees are going to be earning more or less? Or is there a certain type of employee who should be earning more or less under this system?

LB: There’s not a way to predict that because we’ve left a lot of the flexibility in the hands of the managers. Taking away the forced distribution that we had in the past has allowed managers to really dole out rewards in a way that they think best fits the people in their organization and the work that’s been done.

We put more dollars in the system and we talked about that. And I think by and large, they’re going to the people who are rating at the top of a manager’s list of people. So I think from a distribution standpoint, the people who are doing the most outstanding work are being rewarded above and beyond where they were rewarded in past models.

Q: Even though it’s no longer company policy, have you heard of a forced distribution occurring in practice?

LB: I haven’t heard specifically that there’s a forced distribution in place around the company. I have heard that there are managers around the company who have tried to find a way to be more systematic about how they do things in their organization. To my knowledge anyway, there isn’t a group that has a forced distribution in place.

But you do have to distribute a finite pool of rewards, so at some point you have to find a way to do that in a fair and equitable manner based on the work that people have done. That may feel a little bit like a forced distribution to people. I don’t believe it is. I think managers are trying to do the right thing, to be fair and equitable to everybody based on their performance.

Q: Has there been any budgeted increase for the merit awards, taking into account head-count growth?

LB: “We continue to put money in merit. … We try to grow appropriately for our marketplace, appropriately related to the cost of living, appropriately to the fact that we are a global company, which means the merit pay has to be appropriate in every company from India to China to the U.S. to San Francisco to New York to Africa. You can’t universally say, gosh, we’re going to add 50 percent in China, but 2 percent in the U.S.

Q: Would you say the increases exceeded the local cost of living here?

LB: I don’t actually know, because I don’t know what our local cost of living is exactly. We absolutely take into consideration the local cost of living in all of our markets. …

One thing we do need to help employees understand is their total compensation. For example, we have a tremendous benefits package. I’ll make the bold statement that nobody has a better benefits package than we do overall. … And if you look at that, we would be far above any cost of living in any of the markets that we’re in.

Q: At this point, from management’s perspective, are the goals that you set out to accomplish with myMicrosoft being accomplished?

LB: The HR organization has never introduced anything this big at one time into the company. I think people would give that thumbs-up. Management thinks it’s very positive.

If you look at each of the elements, did we invest in exactly the right things in each particular area? I’m not sure yet. And we’ll see. … The way we distribute compensation: I think we’d say that is a good investment, but we need to do more analysis. Literally, we just finished Sept. 15.” …

With myMicrosoft we have a new model, where each year we’ll continue to iterate. So we make it better for people, we change based on the marketplace, we change based on what works and what doesn’t work. … Just like shipping a product in the company.

Q: Are the company’s hiring goals for the coming year as aggressive as they were in the past year?

LB: I think it is. … We have a lot of great work going on here. We do look for great talent. I don’t think we’ve decided to change our direction at all in terms of getting people on a global basis to work for Microsoft.

Q: What does attrition look like at the company now?

LB: Attrition is quite low in the company. We’re currently overall at what we call 8 percent, around 8 percent. … in the industry, that’s incredibly low. High-tech is well above 12 or 13 percent typically. So we feel pretty good about where our attrition is.

Q: Are there any plans in place to make internal transfers smoother?

LB: We just introduced … a new internal-transfer process.

It shortens the internal interview loop that people have. It allows people to move more freely. Managers are notified, but you don’t have to have a manager’s permission to move. So there’s much more flexibility on the part of employees to be able go out and look for things when the time has come for them to finish a project, or if they think there’s a better opportunity for them in another group.

Q: You’ve asked company bloggers to be responsible. What do you mean by that?

LB: What I’d love to see is more suggestions about what could help [the company] move forward. But when you start talking about things that are not disclosed, when you start talking about things that affect our ability to compete with the intellectual property we’ve put together, I don’t think that’s a responsible way to be out there talking about the company.

Q: You’ve talked about fostering more dialogue about issues within the company. Do you have any specifics on how that will be accomplished?

LB: In the middle of October, I’m going to sponsor a blog. I want to be clear about that. There will be an internal blog that will be open to just Microsoft employees, and I will comment on that blog as often as I feel it would be productive, to help clarify things, to help add my thoughts, when I know it’s a dialogue among our employees. And I’ve always said that. I want us to solve our problems. I don’t need the outside world, necessarily, who doesn’t have the same knowledge we do, to make this company a great company.

Q: Will employee postings be anonymous?

LB: It’s up to the employees.

Q: Critics might characterize something like that as a Mini-Microsoft killer. What’s your response to that?

LB: From the beginning when I started this job, I’ve been all about talking to employees. I did listening tours. … I’ve answered thousands of e-mails from employees.

I haven’t yet found a way to have a one-to-many conversation that I can participate in and every employee can as well. This to me is the very natural next step to doing that.