In ‘Ideas That Will Shape the Future of Management Practice' (Bohl, Luthans, Hodgetts & Slocum) human resources is described as being the way of the future with it being argued that we will see a more mature articulation of the importance of people as a firm's only sustainable competitive advantage. The change is described as giving high reward for high performance with the focus on a partnership.
As we have seen, Gates recognized the importance of his people from the beginning and this is reflected in the reward systems, that not only rewards for current achievement but rewards stocks to those that are seen as valuable future assets of the company. This can be seen as a prime example of the focus on a partnership, those that are seen as being valuable to the company, are rewarded with shares that will increase in value even as that person assists in moving the company forward.
Important to the reward system is also the fact that there are two reward paths available, one for those following the technical path and one for those following the management path. The skills of employees can be divided into three areas: conceptual skills, human skills and technical skills. Typically, conceptual skills become more required and technical skills less required as one moves up the corporate ladder (Daft 15). Microsoft is a company valuing technical skills, due to the nature of its product. In most organizations, employees with conceptual skills would be rewarded by moving up the corporate ladder, while those with technical skills would not advance. Microsoft, however, offers two advancement path, allowing those with technical skills to advance as technical experts, just as those with conceptual skills advance as managers.
Reward systems are an important part of organizational culture, they communicate to employees what is valued by the organization (Robbins, Bergman & Stagg 84). By having these two reward systems, Microsoft effectively communicates that both sets of skills are valued. This is also an important sign of Microsoft's consistency. They recruit people for technical ability and so not rewarding for it would be dissatisfying to employees.