Two people have sent me info about how Microsoft tried to make people repay an overpayment and then changed their minds.
I suppose I’m supposed to be horrified that a big, mean, evil empire like Microsoft would ask for erroneously paid money back.
I’m not.
Let’s reverse the situation. Suppose Microsoft underpaid severance (which, in actuality, they did to some people) and that person wrote a letter asking them to please pay up. Would we be horrified that that person had the audacity to ask such a question? After all, Microsoft is a publicly traded company, which means it’s owned by humans! Some of them grandmothers on fixed incomes. In fact, I’m sure some of them are great grandmothers with no money for new dentures! The horror of it all!
I think I’ve used up my exclamation mark quota for a while.
I understand the reason why Microsoft reversed itself. I understand that it wasn’t worth the public affairs nightmare. What I don’t get is why people get so outraged at this.
Someone in payroll or HR made a mistake. It wasn’t vindictive. It wasn’t mean spirited. It was a mistake. And they were within legal rights to attempt to rectify the mistake.
I would probably have sent a similar letter. I also would have ended with that letter and not pursued it any further if the person had balked. That isn’t worth the time, money and effort.
But no company should be vilified for asking for a mistake to be fixed.
totally agree with EHRL’s sentitments
overpayments happen, as do underpayments.
I work for a government agency and we have to chase up overpayments everytime they happen. Its public money and if it turns up in an audit that we haven’t recovered an overpayment, boy are we in trouble. Generally our staff are quite happy to sort out the issue quickly.
the main thing to do is to have a consistent approach to recovering the money, and to not let things drag out. Microsoft realised quite quickly that there were payment errors, and acted on it immediately. Imagine if it had been 6 or 9 months down the track and they sent out requests for the money back?
Common sense! My employer had a similar situation last year where cash bonuses were overpaid to approximately 3000 people. We went through the heartache of attempting to get the money back, because it was the right thing to do and because if the shoe was on the other foot, the employee would want their money. You would have thought we’d asked for it in blood.
When it comes down to it, people don’t think about public coporations being owned by stockholders – people like you and me.
You are sooo right. People need to think about the fact that stockholders are people too and that not every company is out to get you. We are all trying to survive here…people and big companies included. Let’s not forget that we want Microsoft to thrive, rehire and continue to provide goods in our economy. One way they way they can do that is being fiscally responsible.
Good gracious!
Just to add to the chorus – many will assume stockholders are all rich people like Bill Gates, so they still insist “what’s a couple hundred/thousand bucks to a millionaire?” Well, no – 401k’s and such have made investors out of most of us, and a few hundred times thousands is quite a big number, and possibly enough to affect the bottom line for many corporations. How many of us are forgiving when we see our 401k’s down 20%, thinking these companies maybe tried to do the right thing by hanging on to employees who would be hurt with layoffs and therefore missed profit targets, or didn’t reclaim money accidentally paid out to laid off worker and it would be cruel to ask for it back? I think most of us are just as adamant that the company try to get those stock prices back up.
One of my favourite quotes from Albert Einstein:
“Anyone who has never made a mistake has never tried anything new.”
I have to disagree. I am an insurance underwriter. When we make a mistake against an insured, we fix it; when we make a mistake in favor of an insured, we eat it. We are the experts. We have every opportunity to check our work before anything is released to a customer. We have the knowledge and, presumably, the correctly programmed computers and the accurate information in file. We are responsible for doing it right and if we do it wrong, we are responsible for the consequences.
I agree, but only to a point. A few years ago, I did some work for the government. Weeks after I had finished my contract, they transferred a few thousand (extra) dollars to my account. I called the payroll department and they said they would look into it. A week later, the money disappeared. This happened twice more with no explanation or apology before I emailed a higher-up to complain. I understand that mistakes happen, but I was sick of seeing my bank account balance fluctuate by thousands of dollars without any warning.
I think the moral is to check your figures and make sure they are correct.
I heard of a payroll dept that accidentally overpaid an employee by about US$20,000 one month, because when they updated the payroll, someone entered the wrong figure and it wasn’t checked.
When they approached the employee, he said he hadn’t noticed (even though the overpayment was several months’ worth of salary), so they asked for the money back. Then he admitted he had already spent it all. They are now reclaiming the overpayment at $60 per month.
Now, severance is a bit different, because it’s not a regular amount, and it is reasonable to assume that the employee doesn’t know exactly what severance they are due. If I calculated my severance and the company paid me more, I would assume I had made the mistake, not the company.
Tonestapel – I think it is a different case with insurance. You are the experts, and we, as your customers, trust you to get it right, because we don’t know exactly what figure we should be getting, so yes, you eat the difference (and calculate the overpayment into the next set of premiums, no doubt).
With pay, we generally get the same every week/month, so it is reasonable to assume that the employee will notice any over or underpayment, so you can claim overpayments back.
Severance and bonus payments are half way between the two. You don’t know what you are getting, so you trust the employer to get it right. If they make a mistake, the company can correct it in an ongoing employment relationship. With severance, I agree with EHRL and think the company should cover it as far as reasonable.
The bottom line is that if it was a small enough amount that the employee reasonably wouldn’t have reason to suspect overpayment, then it’s Microsoft’s problem and yes, it’s their fault. If the shareholders are upset, then they should take it out on the Controller, CFO, or whoever ultimately is in charge of the Payroll Department—he or she can pay out of his or her own pocket.
There is a reason companies are held to different rules than employees: they have more power, they have more responsibility, they take the risk and reap the profits, and they also can eat the costs of mistakes when the risks don’t pay off (or the company is simply careless, as in this case).
It is unfair to let someone go, give them a severance check, let that person plan based on that amount, and then say, “Give us back part of that money—we were careless and overpaid you.”
Now if it was a large amount, that’s a different story. Someone owed $8,000 in severance who gets $12,000 obviously should think something’s up. But if she gets $8,800, she can validly claim that seemed right to her.
It is evident in real world that employees given much would not want to return the money that was given to them but we also have to consider that this losses will greatly affect the company as a whole.Better to double check than to cause this kind of trouble.
401ks are for suckers.
Where is the integrity of individuals?
When I left a former company, they overpaid my unused vacation – I paid it back. Why? Because it wasn’t my money. Could I have USED that money at the time moving across the country and going 5 weeks without pay? Of course. But it wasn’t my money.
Totally agree. It’s really not that big a deal for Microsoft to overpay the severance package and later ask for a return.
Interesting enough, right after the Microsoft layoff, I conducted a Layoff Satisfaction Survey on my blog (see http://www.geekmba360.com/?p=551). Overwhelming majority of laid-off Microsoft workers rated their severance package as “Fair”, which is very rare among laid-off workers from other companies.
The media simply loves to sensationize stories. But, I think at least in term of severance compensation, Microsoft did better than majority of the employers.