Supplier Diversity: Microsoft to implement a pioneering bonus pay scheme

Microsoft announced that the company has launched an innovative effort that uses a “pay for performance” approach to enhance diversity in the U.S. company’s law firms. According to this new bonus pay system; law firms will receive a 2% bonus if they meet the required Diversity targets. Firms have two options to measure their progress on diversity; either they achieve a 2 per cent increase in the Diversity of their teams working specifically for Microsoft, or if they achieve a 0.5 per cent increase in the Diversity of the firm as a whole.
Microsoft general­counsel Brad Smith states that the Diversity of their legal team is crucial for the overall success of Microsoft: “The better we can understand and appreciate the interests and need of the incredibly diverse array of individuals who make up our stakeholder groups, the more effective we can be. If we can’t understand how other people are thinking, there’s a greater likelihood that we’ll fail to address their needs or persuade them of our position. In this sense, diversity is not simply something that would be nice for us to have; it’s a prerequisite for our success,” Smith said. Thus this new measure can be seen as a financial incentive by Microsoft to motivate and support their law firms to continue to foster Diversity in the workplace.