by Michael S. Kaplan, published on 2010/10/09 07:16 -04:00, original URI: http://blogs.msdn.com/b/michkap/archive/2010/10/09/10073622.aspx
Note: if you found this blog to be interesting, then the new blog written on this topic a week later (The ordinary nature of being exciting) should be right up your alley...
So, way back in 1999, Microsoft eliminated the MVP program that they had created and nurtured.
It was done quickly and entirely due to an AOL lawsuit where its newsgroup leaders sued for benefits as "de facto" employees.
Then over a weekend, so much mail was received by senior execs about how awful that decision was that they reinstated the MVPs days later.
You can see it described here. My only contribution is that I can confirm that it was the AOL lawsuit that inspired it (the Wikipedia article is less definitive on the matter) and that I had a minor impact on the list of exec email addresses (I recommended certain email addresses be removed as some of the people on the list were not the right people -- I think my advice was mostly ignored, at the time.)
You may wonder why this is relevant.
Well, because Microsoft, multi-billion dollar company that it may be, has no spine whatsoever to speak of.
Even though the cases were miles apart, even though there was no threat from any MVPs suing, they wigged out at the chance it could happen and over-reacted in a way that was not in the best interest of customers. Including some of their best customers, the ones who did so much to support their other customers.
Fast forward a few years.
And the fact that Microsoft has great health coverage.
Given my pre-existing condition coverage was a huge issue about the idea of working full time for Microsoft, as I discussed in My thoughts on the health care thing (given my life, my multiple sclerosis, and my iBot). As that blog discusses, they cleared this hurdle with ease.
Multiple sclerosis costs money -- for symptoms, for tests, for treatment.
But Microsoft has always had some of the best health care there is, something they are in fact renowned for.
Calling it universal health care is an understatement -- it is practically pan-dimensional it is so huge.
A few years later, we got a mail about changes in the health plan:
Shocking! Microsoft was taking two steps to do the thing that every other company in the country had been doing all along.
We were still astoundingly well-covered.
Now recently the new health care bill passed.
Foremost in Microsoft's cowardly mind and spineless guts was the Cadillac Insurance Plan notion, which as Wikipedia explains is "an informal term for any unusually expensive health insurance plan, usually arising in discussions of medical-cost control measures in the United States".
As it further goes on to explain:
Although neither bill uses the "Cadillac" term, the 2010 Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, imposes an excise tax on plans with an annual cost exceeding $10,200 for individuals or $27,500 for a family (not including vision and dental benefits).
Now me saying this scared Microsoft is not me spinning yarns. They directly said so in a communication just after it all passed. Sure it would be in eight years, but they stood out like sore thumb from everyone else and made it clearly they were actively worried about this tax.
Then yesterday they dropped the bomb on us, just eight years in advance: the insurance that used to never have a co-pay would now always have one. Up to an annual maximum not yet determined, we the employees would now be contributing to our health care costs. As Ina Fried reported:
"We can confirm that Microsoft has begun to evolve its employee health care benefit," Microsoft spokesman Lou Gellos said in a statement. "There will be no changes for the next two years, but in 2013, employees will contribute to their health care. A guiding principle in this evolution is that Microsoft will continue to offer market-leading health and wellness benefits that rank among the best in the country."
The company didn't go into details on what exactly employees will have to pay, but said there will be a maximum amount that workers will have to pay both individually and as a family. Microsoft currently pays 100 percent of the cost of coverage for workers as well as for a spouse or domestic partner and children.
This is like the same language they use about when the poll shows many employees feel their pay if less than the industry and we are assured how competitive they are. Of course they point out the benefits as a part of that, so that other language will now be taking a hit too as they decide that the best way to proceed is to act like everyone else does.
Because maybe if they fool the government into thinking we're a Pontiac Insurance Plan they won't call us a Cadillac Insurance Plan.
UPDATE 10:59am: I have had several people, at multiple levels of authority and influence, point out that in the announcement the larger issue of health care costs skyrocketing was also emphasized. So I will point that out now since it was not my intent to mislead, though the issue of Cadillac plans was raised as an important issue. My larger points still stand, I believe.
We don't have numbers yet but for now I can pretty much assume that I am likely going to hit that maximum any year I am working, which means I can probably look at that amount as an annual salary decrease.
And Microsoft will just get some extra money from me, so that they can try to make sure they won't have to pay more to the government in eight years.
My initial thought is cheap ass, cowardly, and greedy bastards and I'll admit further reflection does not water that sentiment down much, as people making millions and more decide that people making way less can foot the bill to protect them from the company having to pay out more.
After spending the night drinking too much and reflecting further, I have a different thought.
They no longer look as bad as they did, and I'm not angry any more.
But Microsoft now looks ordinary to me.
I never consciously thought of the health care plan at Microsoft as handcuffs keeping me here until they announced how they planned to remove those shackles.
And now I sit here and when think about Windows 7, or the next version, or Windows Phone 7, or really anything planned, and thing meh. The idea of doing my job when I am not loving it is something that I never have found appealing. But now I have a type of "short timer" syndrome, because in a couple of years working for Microsoft would be just like working for anybody, and perhaps I should not have been so hasty in turning down prior job offers on the basis of how well Microsoft treats its employees.
I'm grateful about that bonus I got a few years ago when they paid for the iBot entirely. Because in the new world, it would cost me since they've decided intrinsicly that we aren't worth as much.
They used to care about their MVPs until they proved they'd drop them in an instant due to even the most irrational fear of lawsuits.
They used to care about their employees too much to get rid of them in large numbers, and then they laid off over 5000.
And they used to care about their employees too much to give us anything other than benefits to rival and top the industry.
Now they've decided money is better then loyalty.
Microsoft did want to be like everyone else, and not be special.
Congratulations Microsoft. Now you are.
Anonymous on 9 Oct 2010 9:45 AM:
I had been thinking about going back to MSFT because of the health care and the folks working there. But, dropping health care like this caused me to put that plan on the back burner. I think many folks will jump ship now that the health care thing is gone.
s on 9 Oct 2010 9:47 AM:
Well, I feel for you but this does kind of read like sour grapes to me.
At the end of the day, all you've really said is that there aren't any 'extra-ordinary' companies out there for you to move to.
John Cowan. on 9 Oct 2010 10:01 AM:
No. No no. No no no no.
Don't believe it.
You're going to suffer a little bit of a dip in the extreme privilege you've been enjoying to up to now, yes. But "just like working for anybody"? Crap.
You and I pretty much belong to the same social class, and we both have expensive chronic diseases. I've never in my life worked for a company that paid 100% of costs. Never even heard of such a thing. Not counting summer jobs during school, I've had seven employers, all major national companies, and the insurance cost has *always* been split, *with* copays. As a diabetic, I've put up with variations in the reimbursement schedule: some don't pay for this, some don't pay for that. But there has been a pattern of overall deterioration.
Last year, I was working for Google, certainly not known as a company that mistreats its employees, and my insurance was Cigna. When I fell and broke my toe, I went to the E.R. at Bellevue, which is both near me and one of the best hospitals in the country. I was there for five days because I had a nasty infection; then Cigna called me and told me I had to leave, because Bellevue wasn't an in-network hospital. Everyone at Bellevue was outraged by this, but I checked myself out against medical advice, taped a copy of my chart to my clothes, and went to the E.R. at an inferior but in-network hospital not too far away. It seems Bellevue doesn't process their paperwork fast enough to suit Cigna.
Now Cigna has refused to pay for the room and board at Bellevue, only the actual medical services, and Bellevue is after me to the tune of $10,000. As the sole support of five people right now, I simply haven't got that. Life goes on: they dun me, I explain I haven't got it.
Now I work for Lexis-Nexis and my carrier is Aetna. So far so good, but prescription things, like my insulin, go through Medco instead -- and Medco's plan is beyond belief. Instead of the $10-$25 copay per drug per refill (per month, typically) that I'm used to, the co-pay is 25% of list price -- and that's huge, hundreds and hundreds for some drugs. *And* that's only if I do business through their mail-order pharmacy in 3-month lots, with a *minimum* copay per drug of $62, though typically it's much more.
Mail-order has been okay for me so far, though I know others have had long shipping delays, double-billings, and such problems with Medco (bing for it if you're interested). But if I don't use mail-order, I pay 100% of list price instead of merely 25%, excepting the first three refills per drug. So I pay for my cheaper drugs at my local pharmacy out of pocket and don't bother Medco about them at all. (The local pharmacy even gives me a discount on the generic drugs because I'm such a good customer.)
Yesterday, I made a boneheaded move; I went off on a three-day trip, literally leaving my insulin behind in a bag. No, it wouldn't kill me to go without -- I'm not that sensitive. But it sure wouldn't do my organs any good either. So I've just called my doctor's answering service and hopefully it'll be called in to the local pharmacy. And I'm sure I'll have to pay list price for the stuff, so I'm going to be hundreds more out of pocket. And I really can't afford that. My own fault, but does recovery have to be so damn difficult?
Be glad you've got what you have while you've got it.
Be glad you have a long way to fall.
Be glad your company is still taking care of you.
Be glad they give a damn at all.
Michael S. Kaplan on 9 Oct 2010 10:09 AM:
Well nothing extraordinary that I know about.
The grapes are indeed sour, I am talking about my own feelings of disillusionment!
Michael S. Kaplan on 9 Oct 2010 10:43 AM:
John, you left Google? When did that happen?!?
The problem in spoiling people is that they seldom handle the corrections to it when they happen. That can seriously affect loyalty....
Bryant on 9 Oct 2010 12:44 PM:
John, you make good points, but if Michael doesn't stand up for himself and everyone else in Redmond as Microsoft cuts costs to make ends meet, what would stop Microsoft from continuing the benefits-cutting spree? Microsoft is risking losing employees to any cuts which occur as time goes on... except not, because who else around Redmond/Seattle would have the ability to hire a bunch of laid-of softies? Nintendo closed shop, and Boeing isn't in the midst of hiring anyone right now. Microsoft is a major region-supporting employer around Seattle, and having a company such as Microsoft bleed employees into a job dead-zone is bad not only for Microsoft (which would be losing valuable talent) but for the entire region (thanks to unemployment's regional toll).
What stuns me the most is that Microsoft increased their dividend by 3 cents this quarter.
Michael, fight the good fight.
Felloe Msft-er on 9 Oct 2010 2:09 PM:
Good for you for speaking your mind! I also work for Microsoft in Redmond, and ever since having joined only a few years ago, I’ve witnessed a steady and strong decline in benefits, culture, and morale.
Rest assured, Microsoft is on a path towards ordinary, just as you say...
- Dysfunctional Culture: nauseating performance reviews, who-can-we-blame-now politics, deep-rooted insecurities, not-invented-here syndrome, terrible work-life balance...
- Bean Counters Galore: disgraceful raises even when promoted, ongoing stealth layoffs, year over year cuts to benefits, a seemingly constant focus on the bottom line instead of growing revenue in real, meaningful ways...
- Zero Accountability: terrible mismanagement at the hands of executives, millions in wasted money and time, total self-deception in terms of our competition (e.g. Linux vs. Windows, Google vs. Bing), bloated layers of bureaucratic management, destroyed relationships with partners and OEM’s, scorched mindshare among our customers...
And yet, Microsoft had one of its best years financially! It has billions in the bank, only issues debt to award shareholders, and has an extremely dedicated and diligent workforce willing to sacrifice their weekends, their families, and their health for the organization.
For all of this, the end result is benefit cuts, no clear vision, no clear leadership, and having to fight just for the mediocrity of an A/70. Disgusting!
The medical insurance issue could have been handled differently. People like you don’t deserve to be treated this way. You’re not just a cost. :(
John Cowan on 9 Oct 2010 6:04 PM:
The good news is that I got my doctor and the local pharmacy (where I am) to have a cellphone meeting of the minds, yea even on Saturday, and I got a few days' worth of insulin -- and Medco didn't even charge me a cent, presumably because it was considered an emergency rather than a maintenance med, even though its the same damn drug I take all the time.
Michael: I didn't actually "leave Google", they awarded me the Order of the Boot, with stars and clusters, in April. I didn't find another job until the end of July, but I was able to live off my Google stock options in the interim. (What with everything I've mentioned and a bunch of things I haven't, I don't get to save money.) In hindsight, I'm very very glad I'm not working there any more; I'm much happier with everything about my new job *except* the drug coverage, and I don't mean to suggest otherwise. Even if Lexis-Nexis *is* just a tentacle of Reed Elsevier, the Evil Content Empire. :-)
As for the spoiling business, that's true. The whines on the "misc" internal mailing list when Google cut back on the choices (mostly in candy) in the micro-kitchens were entirely beyond belief. And then there was the fellow who complained because he couldn't get a particular journal article under Google's subscription. I used my daughter's university account and sent him a copy. Only later did someone tell me the fellow was a pre-IPO employee and certainly a millionaire. (I'm neither, obviously.)
Bryant, *nothing* stops Microsoft from cutting back to a level of benefits that is no worse than the worst employer in the area, no matter how Michael struggles or doesn't struggle. He's powerless against this. The only thing that could was a really strong union, and most geeks have been buffaloed into not believing in unions: they think, for some reason, that only the rich should have unfair privileges.
Felloe, you and Michael are *not* just costs, that's true. No, you are liabilities. Ask any accountant: employees are people you owe money to (because you pay them after they work, not before), and that makes them liabilities on the balance sheet. The fewer of those there are, the better Wall Street likes it. And since Microsoft has a death grip on certain cash cows, as long as it doesn't lose those -- well. Mene mene tekel u-pharsin.
Michael S. Kaplan on 9 Oct 2010 6:52 PM:
The comments in threads on the Internet that I find most amusing from an anthropological point of view are the ones that blame it all on insurance companies (even though Microsoft is self-pay for the insurance, using Blue Cross to administer the plan). What bothers me most is how much of the underlying problem can be blamed on the "Blue Cross" factor (I have in past blogs described mistakes that I believe they have made in both directions) and their management of the plan. Why would Microsoft not hold the insurance company administering the plan's feet to the fire before picking on the one segment they sometimes claim loyalty to (employees).
I was once told that the vadt majority of all claims are handled just by Blue Cross on first claim with no appeal initiated, which suggests that *if* there is any conspiracy of improper insurance usage that Blue Cross et. al. is at best the unindicted co-conspirator here, and at worst a principal cause. So maybe blaming insurance companies still is the answer here, ironically enough. Just not in the way people mean it.
Why wouldn't they start there in investigating their procedures which have many flaws in them, on many levels? Unless my suppositions here have truth to them?
John on 10 Oct 2010 2:46 PM:
I'm not an MS employee. But looking from outside, I can tell that you guys aren't performing like you used to. I mean, you keep shipping crappy products that keep losing (big) money all the time. The talent is NOT at Microsoft anymore, and it's been the case for years! It's only normal that you don't get the great treatment anymore. You're not entitled to it for life you know. MS is now mostly a bunch of losers trying to milk the 2 cash cows to death. No innovation, no greatness, nothing, just cash-cow milking. That's (hopefully) not going to last forever.
I'm sure there are still very talented people at MS, but they must be like 10% of the workforce.
So, quit whining please, go worry about making a killer product rather than your health coverage. Look at Win Phone 7: Ballmer laughed the iPhone out in 2007, a year later Windows Mobile was shutdown and rewritten from scratch!
MS is ordinary, choke full of ordinary employees who think they're extra special...
Former Microsoft intern on 10 Oct 2010 5:12 PM:
I worked for Microsoft for 16 months as a student intern and I really loved my stay.
Now just from a numeric perspective, there's something I don't understand. Microsoft has over $37 Billion in CASH right now and only about $6 Billion in debt. Quarterly revenue growth is at a fantastic 22% and they have a profit margin of over 30%!! (I'm a finance major and these are FANTASTIC numbers!) Google has $30B in cash and a lower profit margin, Apple is at $25B and only 23% profit margin.
Financially speaking, Microsoft is the overall winner in the tech industry, bringing home 3 times as much cash as Google every year and over $10B more than Apple. (facts come from finance.yahoo.com/.../ks)
Yet, what I don't understand is how the company can decide to destroy employee morale and potentially lose some of their best employees because of these issues. Yes, the great health care coverage was one of the greatest perks of working at Microsoft, which explained in part the lower than average salaries of MS workers compared to the industry average, but for current employees, it's a given. Unless they improve miserable bonus averages or increase wages, working at Microsoft is going to lose its appeal for many intelligent grads and for successful professionals.
I don't understand why Microsoft doesn't decide to just increase wages across the board, OR hire hundreds of awesome programmers, the core workers of a tech company, to create great software. Microsoft is struggling in many areas of its business and focusing on the core products to boost the company's brand perception would PERHAPS one day get my MSFT stocks up (I'm losing confidence).
MS has the tech and the workforce and the intelligence to create amazing innovations like Kinect for Xbox! We'll see how well it'll sell but i'm betting that just because it's NEW, it'll sell really well. Why isn't the Surface technology (which came out several years ago) being used in cool new applications like households yet?? Why is this giant bureaucracy WAITING for a competitor to basically "test" the market before getting the product out?
Microsoft really isn't what it was before. It lost it's soul kinda - it's just a big american corporation now. A bit like IBM. And it's definitely by reducing employee benefits that they'll get out of their hole. HR is gonna have a lot of work on their hands.
Bry on 11 Oct 2010 11:32 AM:
The question you should ask yourself is, if you were currently unemployed, where would you go work? And Microsoft still fits the bill as one of the top software companies, and still has the best benefits amongst them. Sure, now they get a B+ instead of an A+, but when everyone else is a C-, things aren't so bad, no? If you lack appreciation for the situation you are in, you should leave and see what else is out there (not much).
Anon on 11 Oct 2010 1:11 PM:
I read somewhere the cap was $1k for "maintenance" and $2500 for "catastrophic" - a slight pay decrease for us, yes, and makes you wonder if the bad PR was worth it. We are up to 100k people, right? And let's suppose the average payout per employee is $1k so that's $100 mil in savings to MSFT which all things considered, doesn't seem like much. But wait, how would families work? is that $1k per family member? Hmm - that could be some big money...
anon on 17 Oct 2010 12:09 AM:
I was with Microsoft for 4 years and left involuntarily this January. Lost a bunch of money in stock grants, and my new healthcare is noticeably inferior (at least for now, from the sound of it). My wife has type-2 diabetes and some other problems, we estimate our out-of-pocket expenses will be $4-5,000 by year's end.
But as often happens, if not for the better, the new job is at least as good. Some combination of skill and luck landed me a job within a couple of weeks. My new position is a level higher (long delayed at Microsoft), with a better yearly bonuses. Just as importantly there is much less politics, and my extended team are more supportive.
Meanwhile back at my old group forced attrition has led to a downward spiral. The product group was somewhat profitable and market leading, but our large customers were already unhappy with the slow pace of development. Now 4 people have left since my position was eliminated leaving just 6 to do what overloaded 11 while I was there. I know at least 2 of those 6 are seriously looking externally. Not a happy place to work...
Aside: assuming they really did value those employees who were placed on internal job search, whoever chose the November layoffs really screwed up. There were very few openings afterward, as might be expected immediately following a company-wide layoff. Then when jobs opened up in December, the "priority" given to internal job searchers effectively killed anything but the perfect match. I went through a number of enthusiastic phone screens, but each time after the manager checked the rules they declined to formally interview me. Turns out that if they did interview me, the rules would have forced them to make a hiring decision by Dec 31 (last working day). Needless to say with key personal on vacation, they would be reluctant to make hiring decisions for any but the most perfect of candidate. I would be very surprised if more than 10 or 20% of the "valuable" people on internal job search were retained.
2013/02/07 The exciting nature of being ordinary, Redux
2010/10/16 The ordinary nature of being exciting
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