Starting in September, Microsoft will convert a portion of stock into base salaries, "providing more cash up front and obvious incremental employee value." Ballmer assured employees and senior leaders that they'll continue to receive a large portion of their overall compensation in stock to ensure their compensation is heavily tied to the financial performance of the company, according to a memo from Microsoft CEO Steve Ballmer.
In addition, all employees will have the opportunity for a merit-based raise come September. Microsoft also will increase funding for its bonus and stock awards, to continue to ensure higher payouts to top performers.
Ballmer also said the company would retire its current performance review system, and replace it with a simple 1-5 rating system with clear, linked rewards.
Microsoft is hoping the changes will stem employee defections and help the company attract new talent. It's also counting on the changes, due to be implemented starting this September, reducing employee disgruntlement with the stagnant stock price, one of my sources said.
Here's the full memo:
[Via: All About Microsoft]