Microsoft Takes Steps To Discourage ‘Sharking’ Software Giant Caps Pay Raises For Temporary Workers

New caps on raises for temporary workers at Microsoft may prompt some free-lance workers to go elsewhere. But company officials say the plan will prevent in-house raiding.

The software maker is considering a 5 percent annual cap on pay raises or possible wage freezes.

Company officials say managers sometimes steal employees from each other - known internally as “sharking” - by offering huge raises to sought-after workers.

“We wanted to make sure that we had consistency across the board,” said Sharon Decker, contingency-staffing director at Microsoft’s Redmond headquarters.

But the move is unpopular among contract workers after years of double-digit increases for even routine promotions between assignments.

The policy has gone into effect in Microsoft’s Interactive Media Group, which oversees some of the company’s high-profile Internet publishing projects.

It will expand to the estimated 5,000 temporary or contract workers companywide in mid-July.

The move could undermine one of the key strategies Microsoft uses to help keep overhead expenses low and profit margins high: Quick hires for short-term projects, now a common practice throughout the industry.

Temps at Microsoft are usually employed by outside companies that supply workers to the company on contract.

The contractors, who have to make do without the million-dollar stock options and software discounts permanent employees enjoy, say the move may eliminate their only incentive to stay with Microsoft.

“The main thing about being a contractor at Microsoft is you’re able to change jobs and make more money,” said one temp who started in November at $16.50 an hour and now makes $30 an hour after two raises.

The new push hasn’t hit his department yet, but if it does, he says he would leave the company.

The changes have prompted some workers to try organizing protests, with one group even threatening a walkout. Some have hinted the move could provide an opening for a labor union to launch an organizing drive.

The strong reaction from employees has policy-makers backpedaling - but not much.

Decker said the 5 percent figure is “not an absolute. It’s just a guideline.”

Still, she said managers would be given the guidelines and told, ‘Here’s the policy, it’s been reinforced from the top down, from the vice presidents.”’

Microsoft’s hiring policies angered employees earlier this year when 90 receptionists were laid off and told to re-apply for their jobs through a national subcontractor. Some found other permanent jobs in-house, but others had to take jobs without Microsoft benefits or wound up unemployed.