In spring 2016, Microsoft was ready to go public with some important data: The company said it had nearly eliminated the gender gap in pay among its employees.
Women made 99.8 cents for every dollar made by men in the same role.
The software giant marshaled a public-relations rollout for the triumphant news, including outreach to the media and an all-employee email.
But at 10:02 p.m. the night before the data was published, a human-resources employee wrote to Gwen Houston, the leader of the Microsoft diversity initiatives, with a warning.
“I expect this to land poorly” the HR manager wrote, citing distrust she was seeing among women at the company when Microsoft discussed its efforts to diversify its workforce. “They’ll look at this as a cover up.”
She was right.
After the announcement, Microsoft’s human-resources chief received dozens of emails from employees picking apart the data. Many said their experiences ran contrary to the upbeat tone of the message. Microsoft, some said, was trying to whitewash a serious gender-discrimination problem that extended beyond pay equity.
The announcement “does not honestly represent us as a company,” wrote one woman, part of a team where men outnumbered women 5-to1 in its senior ranks.
Another employee wrote: “I’ve seen little change in the day to day inclusiveness of our culture, nor any strategies in action aimed at retaining diverse talent.”
She added, “I am surrounded by men and only men in most of my meetings.”
That is a common refrain among women at the company.
As technology giants face scrutiny for their hiring practices, interviews with employees, past and present, help explain why Microsoft has struggled to build a balanced workforce many years after declaring diversity a priority.
Isolation and impatience
The high-tech industry is under fire for the way it treats women in its workforce.
Jobs in science, technology, engineering and mathematics are held up as career paths of the future, and are among the most lucrative and prestigious careers today.
But the biggest companies in technology have a glaring diversity problem: They don’t employ many women.
The workforce of the five most valuable U.S. technology corporations — Apple, Google parent Alphabet, Microsoft, Facebook and Amazon — taken together, is less than one-third female.
Microsoft, based in Redmond, is the most male-dominated of the five.
Interviews with more than three dozen current and former employees and a review of hundreds of pages of court filings and internal documents illustrate why Microsoft has failed to hire more women or retain those within its ranks: Widespread complaints focus on a culture of casual sexism, a male-dominated hierarchy slow to change, and poor resolution of employee grievances.
Some of the documents came to light as part of a lawsuit that alleges discrimination in pay and promotions at the company. Katherine Moussouris, a former Microsoft cybersecurity engineer, sued the company in September 2015. Two other women later joined the suit.
Microsoft’s discrimination cost women up to $238 million in compensation and more than 500 promotions during a four-year period, their lawyers allege, based on an analysis of data provided by the company. They are seeking class-action status, which would give them the right to represent some 8,600 women who have been employed in technical roles at Microsoft in the U.S. since 2012.
The company denies the allegations, saying there is no pay gap in its ranks and that its treatment of women complies with the law. Microsoft also says it has been making progress in making its workplace culture more welcoming to women and people from underrepresented racial groups.
The company’s budget for diversity and inclusion projects — including training, recruiting efforts and other programming — was $55 million this year, up from $13 million a few years ago.
Executives and spokespeople say they are grappling with an industrywide problem. Twitter, Google and Oracle are also facing gender-discrimination lawsuits, and Uber recently settled one.
The Labor Department is investigating Microsoft’s pay practices, has accused Google of withholding information in an equal-pay probe, and has accused Oracle of systemic discrimination against women.
All of the companies have denied wrongdoing.
The skeptical responses to Microsoft’s equal-pay announcement were disclosed in the Moussouris lawsuit, which has brought to light the frustration and isolation that many women felt after years of management promises on diversity issues.
Among the earliest: In 2001, the year Microsoft hired its first diversity and inclusion czar, the company won a court order denying class-action status for a high-profile discrimination lawsuit that would later be settled out of court. Then-human-resources chief Deborah Willingham said the company was “committed to doing even more to promote diversity at Microsoft.”
Women at the time made up 26.4 percent of the company’s U.S. employees.
That total has declined since. In 2016, the most recent year for which data is available, Microsoft’s U.S. workforce was 24.5 percent female.
Sharon Cunnington joined Microsoft in 1989 after earning degrees in computer science and criminal justice at Washington State University.
She described a college-like atmosphere at the company. “People playing video games and pinball in the hallways,” she said.
Microsoft was just starting its meteoric rise. At the same time, the share of U.S. computer-science degrees going to women was plunging, a phenomenon that some researchers attribute to the marketing of personal computers as toys for boys.
Microsoft, with an insatiable appetite for workers, filled its most important roles with men. And like many companies, Microsoft had a tendency to hire people who looked like those already there.
For women, there was tremendous pressure to adapt to that culture, current and former employees say.
One woman, who joined Microsoft in the late 1990s, recalled some of the first instructions her manager gave her: Dress like the men.
“You have to fit in,” she was told.
She learned to curse, sprinkling profanity into hallway conversations to develop a rapport in overwhelmingly male groups.
“My first week there I cried because I was the only woman [on my team],” she said. “No one looked me in the eye.”
She requested anonymity, as did all 12 current employees interviewed for this article. Microsoft prohibits its workers from talking to the news media without authorization. The company offered informational conversations with people involved in its diversity efforts, but declined to make anyone available for an on-the-record interview.
“Bullying and loud voices”
A defining feature of Microsoft’s culture that dates to its early years is confrontation. It stemmed from the top.
Co-founder Bill Gates was brilliant. He was also relentless in his criticism of errors or what he thought were bad ideas. One of his regular retorts is Microsoft lore: “That’s the stupidest f—ing thing I’ve ever heard.”
Under Steve Ballmer, the sales executive who succeeded Gates, the tone was similar.
A generation of leaders rose through the ranks with the impression that they needed to be assertive, and pipe up authoritatively even when they might not have anything to add.
“Microsoft has kind of a traditional culture of being very comfortable with bullying and loud voices,” said Barbara Gordon, an executive who left in 2013. “The loudest voice in the room gets the attention.”
Such an environment, sociological research says, puts women at a disadvantage. In group settings, while a man might be seen in a positive light for speaking up, a woman is often viewed negatively if she behaves forcefully. Many women aren’t socialized to thrive in those settings, especially, research shows, when many rooms are male-dominated.
This culture was built into the company’s infrastructure, ingrained in part by a rewards structure that created an incentive for employees to prioritize their individual performance over that of their colleagues.
Microsoft performance reviews for years used a system, popularized by General Electric in the 1980s, called stack ranking, which required managers to grade employees on a curve. No matter how well a team performed, some team member would receive a potentially career-crippling evaluation at the bottom of the curve at review time. (Microsoft switched to a new system in 2013.)
One former Microsoft engineer describes the effect of the old policy.
Her unit was trying to stabilize a behind-schedule project in the early 2010s. Weekly product-review sessions seemed designed to devolve into shouting matches as people competed to dismantle the ideas of their peers. Slip up, and “it was like blood in the water,” she said.
“You got brownie points for tearing someone down,” she said. If you were the target of the criticism, “You’d have to endure a verbal lashing, in front of everyone, until they were tired of yelling at you. And then the next person got to go.”
Gordon, the former executive, tried to snuff out those habits during her years leading Microsoft’s customer-support group.
She convened her deputies for training aimed at enabling introverts and limiting bullying. “It made a difference for people,” she said.
Diversity effortsChange at the company as a whole was slow in coming, though.
For most of its existence, Microsoft was organized into silos around individual business units like the Office suite, online products or small-business sales. The company’s diversity initiatives were similarly splintered, with cross-company efforts limited to a guide of best practices and a mandate to employ more women and people from underrepresented ethnic groups, people who were involved in those efforts say.
“It is a ridiculously tough area to make sustainable progress,” Gordon said of efforts to bring more diversity to the technology sector.
Microsoft started to respond to workforce diversity issues after its employees organized career-development groups. Blacks at Microsoft was founded in 1989, and Women at Microsoft followed a year later. The company’s human-resources department eventually started providing financial backing for those organizations, called “employee resource groups” in business-speak.
“It was hugely beneficial,” said Sabina Nawaz, who, when she started as a software engineer at Microsoft in the early 1990s, was the only female engineer in her building. “Just the ability to connect with other technical women and know I wasn’t alone was super helpful.”
The late 1990s and early 2000s brought other steps, including hiring a diversity chief, paying employees to attend diversity-related conferences and funding programs to encourage young women to go into high-tech fields.
Microsoft also pushed to eliminate pay disparities between men and women.
Sheila Henderson, a former Microsoft sales manager who at one time oversaw 120 people, recalls that, after doling out annual raises and bonuses among her employees, someone from human resources would often come back to her recommending pay bumps for specific employees.
The recipients of those raises, she said, tended to be female employees, people of color, and older employees. It wasn’t a problem if she had exhausted her budget. Human resources, she said, would offer “more money out of this pool we’ve set aside.”
“They were concerned with looking at the entire organization and needing to appear they had fairly distributed everything,” she said.
Despite the pay bumps, a 2011 memo described a budding retention crisis. The proportion of female senior engineers was falling. And the company was tracking a worrying rise in the number of women at Microsoft’s principal level, the gateway to management ranks, who were leaving the company.
Data at the time showed 56 percent of female engineers left the company in the middle stages of Microsoft’s career ladder.
The memo recommended steps that had become common prescriptions for the industry’s diversity woes, including funding employee groups and highlighting examples of prominent women.
It also suggested that Microsoft encourage female engineers to stay in technical jobs, rather than the company’s prior practice of suggesting women pursue “broad business leadership” instead of engineering.
Within a year, Cunnington, the longtime engineering manager who wrote the memo, would leave Microsoft herself.
Steeped in a workaholic culture that more than once had her sleeping on the office couch, she was afraid of missing her school-age daughter’s childhood.
“I discovered how important family was,” she said. So she quit.
At Microsoft, as in many companies, taking time off to care for children can have the practical effect of derailing a woman’s career. In general, men often aren’t penalized in the same fashion even if they do take time off, researchers say.
On paper Microsoft’s family-leave policies, which offer 20 weeks of paid time off for new mothers, have expanded to become among the most generous in the industry.
In practice, those benefits can be useless if there is pressure to stay at work or return quickly after the birth of a child. One employee recalls a warning she received from a manager: Never tell anyone you prioritize your family above the company.
Several current and former employees say that when they’re considering switching to a new unit at Microsoft, they vet the teams by how many of its leaders have kids and how common it is for employees to take full parental leave, or even regular vacation time.
Kieran Snyder, a linguist who spent nine years at Microsoft, leaving in 2014, recalls a conversation with a manager when she was a single mother raising a 2-year-old.
Her manager said his wife was out of town and that the experience of caring for their dog alone finally gave him a sense of what Snyder’s single-parent days were like.
She transferred to another unit. “He wasn’t evil,” Snyder said. “But was he leading a team I wanted to work at long? No, he was not.”
Others found more support from the company.
Claire Bonilla recalls a meeting of up-and-coming women in her group a decade ago. The unit’s vice president asked for a show of hands: Who wanted to make general manager, a big step in the march toward Microsoft’s executive ranks?
Bonilla didn’t. “I look at how hard the GMs work here, how many hours they put in, and I want a better work-life balance,” she told the executive.
The result was a compromise. Bonilla participated in what was then a new job-share program, that, with the approval of her manager, split her role with another Microsoft employee when she needed time to care for a newborn. Her husband, who also worked at Microsoft, did the same after the birth of another child.
She ultimately made general manager, and would stay with the company for years before taking an executive role at a Seattle health-care company.
“Your manager,” Bonilla said, “can make or break your career.”
Managers are given wide latitude to shape their teams, and the workplace culture varies widely at the sprawling company, which has more than 120,000 employees.
One female computer scientist joined Microsoft after graduating from a prestigious university in the late 2000s. Her first two teams were diverse and professional, geeky and supportive. She earned a spot in one of Microsoft’s programs for top performers, and a mentorship with an executive.
Her third posting was different. She found herself one of just a handful of women in her unit, welcomed by hallway chatter along the lines of “Oh no, not another girl.”
That group’s leaders and top performers would get together regularly after work for cigars and poker. Women, it was clear to her, weren’t invited.
“They might as well have had a secret handshake that they did in front of everyone,” she said. “It was that blatant.”
Facing limited options for advancement, she left Microsoft. Within a few years, so did all of her friends — primarily women and people of color — in Microsoft’s group of high-performing young employees.
Another employee, a marketer, recalls an episode with an abusive male manager a few years ago. The women on his team left, one by one.
“I felt so alone,” she said. On the advice of a mentor, she accepted an eventual layoff instead of fighting back against the manager’s harassing comments and what she thought were unfair performance reviews.
“It’s like an underground railroad,” she said of the people who try to steer employees away from bad managers.
She would later return to Microsoft, and today is happy in a more diverse group.
Satya Nadella, in one of his first major public appearances as Microsoft’s third chief executive, unintentionally shined a spotlight on deeply held biases in the technology industry.
Asked in 2014 at the Grace Hopper Celebration of women in computing what advice he’d give to women asking for a raise, he suggested they shouldn’t ask, and instead trust the system and good karma to reward them fairly.
The backlash was swift. Nadella apologized, and set about expanding Microsoft’s programs to recognize and remedy bias and discrimination.
The company implemented an online course designed to highlight unconscious bias — the only training, aside from a general business conduct guide, required of all employees.
Last year, the company added a new element: a workshop for managers featuring actors demonstrating how bias seeps into common workplace interactions.
Some employees who have gone through that training say it is the first time they’ve had space at Microsoft to discuss diversity, leading to new conversations and an outpouring of emotion.
As the company has refocused its diversity efforts under Nadella, it has exposed just how far it still has to go.
Microsoft’s Office group last year audited its interview process, finding that, in the pool of employees authorized to interview candidates for senior roles, men outnumbered women by a 13-to-1 ratio. Among the employees called in at the end of a successful visit to check whether the candidate was a cultural fit, the entire interview pool was male.
The team disbanded the latter group, starting over with a new set of volunteers balanced along gender lines.
Executives also started conducting focus groups with employees from diverse backgrounds.
One participant said she was optimistic at first. In practice, though, the exercise felt geared toward educating white male executives on what it was like to be in someone else’s shoes, instead of trying to reform the culture and change habits.
She stopped attending.
“We’ll never be done,” Nadella said last year of Microsoft’s inclusion efforts, in comments to an audience of students. “I would not by any stretch say at Microsoft we have excellence in it.”
“I’ll say one thing,” he went on. “We are going to, every day of the week, push to get better and better at creating that more inclusive culture.”
Many employees and outside observers say Nadella has set a good tone. But some remain frustrated by the pace of change, and the fact that some leaders with reputations for bullying or failing to promote women remain at the company.
“I think Satya Nadella is probably the best thing that ever happened to Microsoft,” said Ellyn Foltz, a former sales manager who left at the end of 2014. “But having been an executive in the technology industry, you don’t make deep, important cultural change without owning up to what’s going on. I don’t think that’s happening at Microsoft.”
Lack of support
Microsoft says employees who feel they aren’t being treated fairly should inform their supervisor, human resources or the company’s legal department. The company says it does not tolerate bias, discrimination or harassment, and offers a variety or remedies, from formal complaint processes to anonymous hotlines.
As the #MeToo movement of women sharing their experiences with sexual assault and harassment intensified late last year, Nadella and human-resources chief Kathleen Hogan sent employees an email reminding them of ways to get help and “our absolute commitment to ensuring each and every employee here has a voice, is respected and can do their best work.”
Yet many women say they don’t trust Microsoft’s HR group to give them a fair hearing if something goes wrong. Some cite that perceived lack of support as a reason for seeking work elsewhere.
“HR is there to protect the company’s interests,” said a longtime Microsoft employee who left the company last year on good terms. In her final year at the company, she says, “I saw a dozen women with very specific grievances and concerns who got zero traction.”
Most, she said, ended up leaving their teams, or the company.
In some cases, employees say Microsoft failed to protect them from retaliation after they reported harassment or discrimination, or resolved situations in a clumsy or tone-deaf manner.
In one instance, first reported by Bloomberg News, a Microsoft intern alleged that a fellow intern raped her after a social event in Seattle. She reported the incident to the company and police. No charges were filed.
Both people were subsequently hired to full-time jobs at Microsoft, and their jobs required them to work in close proximity, the woman’s lawyer alleged in a 2014 letter to Microsoft seeking a settlement and severance.
Microsoft said in a statement that the company worked to support the employee who had made the complaint, but provided no other details on the resolution of her case.
Another woman alleged that her manager made repeated unwanted advances, propositioning her for sex on company trips and sending lewd emails.
After reporting him to human resources, she was transferred to another unit, only to find that, after a subsequent shuffle of office space, she was posted just two doors down from her harasser, she said in a lawsuit. She developed post-traumatic stress disorder, her complaint said, and left the company.
In another case, a woman told a high-ranking manager that her male supervisor made demeaning comments and gave her unfair performance reviews. Her supervisor found out about the exchange and confronted her: “Who did you escalate to?” he said.
She was unable to transfer to another team at Microsoft, she would claim in a subsequent lawsuit.
Microsoft denied wrongdoing in the two discrimination cases. Both were settled out of court.
Excluding the current class-action lawsuit, at least 16 women have sued Microsoft in state and federal courts for gender discrimination, sexual harassment or gender-related retaliation since 2009.
Microsoft won the only one of those cases that went to trial. Of the rest, it’s unclear how many were settled out of court or withdrawn by the plaintiffs, or how the total compares to cases brought against other large firms.
Inside the company, female engineers in the U.S. complained about gender-related mistreatment 238 times between 2010 and 2016, according to documents cited by Moussouris’ lawyers. Among gender-discrimination complaints, Microsoft’s internal investigators determined that just one of 118 complaints over that period was found to violate company policy.
Microsoft said that tally was misleading, and responded with separate data showing that, during the most recent fiscal year, investigators determined 10 percent of gender discrimination complaints were founded in whole or in part. The company added that it fired about 20 people following sexual harassment investigations that year.
“Relative to their size as an employer, we get quite a few calls from Microsoft,” said Stephen Teller, a Seattle employment attorney. “A lot of people feel like they’ve been mistreated.”
The full picture is difficult to determine, however.
The company requires nondisclosure and non-disparagement clauses as a condition of employee severance agreements and court settlements, according to former employees and lawyers who advise them. That’s a common practice in corporate America.
Meanwhile, one of the company’s procedures to address harassment for years included a suggestion that employees should remain silent about their experiences.
When the lawyers on Microsoft’s four-person Employee Relations Investigation Team finish a probe, they send the person who brought the complaint a memo outlining whether they found a violation of company policy.
At the bottom of each was the same sentence of guidance: “Microsoft treats employee relations situations confidentially to the extent possible, and we ask that you do the same.”
The company says it has stopped using that phrase.
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