Internal Microsoft poll shows employees are less satisfied with pay as battle for tech talent heats up

Key Points
  • Microsoft employees were critical of their compensation relative to previous years in an internal survey obtained by CNBC.
  • HR boss Kathleen Hogan said in an attached email that the company takes the decline in income satisfaction "seriously."
  • The compensation issue is important as Microsoft looks to expand through additional hiring and acquisitions.
Microsoft CEO Satya Nadella
Justin Sullivan/Getty Images

While Microsoft is spending billions on acquisitions, employees aren't seeing such generosity in their paychecks.

According to an annual companywide survey, obtained by CNBC, Microsoft employees said they're less fairly paid in 2018 than they were in any of the past three years. When asked if "total compensation (base pay, bonus, equity) is competitive compared to similar jobs at other companies," only 61 percent said it was, down from 65 percent in 2017 and 67 percent each of the two prior years.

Additionally, just 62 percent of the employees agreed that "people are rewarded according to their job performance," down from 63 percent last year and 64 percent in 2016. Those two questions received some of the lowest scores on the survey. The company said that 86 percent of Microsoft's employees participated.

The results, shared by Chief People Officer Kathleen Hogan in April, are a further indication of the challenge that Microsoft and other tech companies face in hiring and retaining top talent. Microsoft's headquarters in Redmond, Washington, is just a few miles from Amazon's home and isn't far from the Seattle offices of Google, Facebook and a growing number of start-ups.

As Microsoft continues to expand, through additional hiring and big acquisitions like this week's $7.5 billion GitHub deal, income satisfaction could become a more critical issue inside the company.

GitHub fits rather nicely with Microsoft, says Recode's Kara Swisher
GitHub fits rather nicely with Microsoft, says Recode's Kara Swisher

In the email alongside the survey results, Hogan said the company takes the issue "seriously," and that it will work to ensure a more balanced pay structure.

"On compensation and benefits, we will continue to take a market-driven approach as we continue to invest, ensuring that our overall deal remains strong and differentiated," she wrote.

A Microsoft spokesperson didn't immediately respond to a request for comment.

Microsoft hasn't yet disclosed its median employee salary, a new regulatory requirement, due to the timing of its fiscal year. According to Glassdoor's report from last year, Microsoft had a median total compensation of $144,000, which was 19th among U.S. based companies, ranking below Google, Facebook, and Amazon.

Microsoft CEO Satya Nadella was the 17th highest paid CEO in the U.S., with $20 million in salary in 2017, according to Equilar.

Aside from income satisfaction, Microsoft's workforce responded positively to much of the survey.

Some 93 percent of respondents said they "felt proud to work for Microsoft," while 94 percent said their managers treat employees with "respect and dignity." When asked about work-life balance, 93 percent said they were given the necessary flexibility by their manager.

Here are the full survey results: