Microsoft Memo Leak Reveals Guidance For Managers: Connect 'Rewards' To Employee 'Impact,' Avoid Salary Freeze Talks

Microsoft Corp. MSFT has made significant changes to its employee compensation strategy this year. The tech giant has frozen salaries, cut bonus budgets, and increased the proportion of stock awards, Business Insider reported.

In the past, August has been the month when Microsoft informs employees about salary hikes. However, this year, during performance reviews, managers were instructed not to discuss the company's budget. Instead, the focus was on individual performance and its impact on rewards.

According to three employees, stock awards now constitute a larger part of their bonuses.

Microsoft's Chief People Officer, Kathleen Hogan, also instructed managers to award fewer “exceptional rewards,” which lead to higher pay and bonuses. The aim is for more employees to fall in the middle of the range, according to an email viewed by Insider.

This follows an announcement made by CEO Satya Nadella in May, stating that the company wouldn't be increasing full-time employees' salaries this year and would be reducing the budget for bonuses and stock awards.

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Satya Nadella Microsoft (Created with artificial intelligence on MidJourney and The Art of Pics on Shutterstock)