The party's over for Microsoft CEO Nadella

Approval rating plunge of 20 points caused by layoffs and 'karma' comment

Well, that honeymoon didn't last long.

The approval rating of Microsoft's CEO Satya Nadella, once in the stratosphere, dropped by 20 percentage points this year before recovering slightly last month, according to data provided by Glassdoor, a Sausalito, Calif.-based online jobs and careers website.

Glassdoor regularly measures hundreds of CEOs by asking employees posting on the site whether they approve of their chief executive, much like U.S. pollsters quiz voters on the President's performance.

For each of the 10 months since Nadella has been CEO -- he took over from Steve Ballmer on Feb. 4 -- Glassdoor had 60 or more company reviews and CEO rankings from Microsoft employees. While the CEO approval was a simple yes-no, up-down vote, the company reviews were based on a five-point scale.

After his February start, Nadella's approval climbed for several months, hitting a peak of 94% in April, then dipping slightly in May before heading up again in June to 93%.

Had his numbers remained at their June level, Nadella would have been among the Top 10 CEOs of 2013, tying Facebook's Mark Zuckerberg and coming in a point higher than Apple's Tim Cook.

But instead, Nadella's approval rating sank, dropping 14 percentage points to 79% in July, slipping to 78% in August and September, then falling again, this time to 74%, in October.

The CEO's rating bounced back to 80% in November.

It's not unusual for a new CEO's approval rating to drop after an initial honeymoon, said Scott Dobroski, career trends analyst at Glassdoor, in a telephone interview today.

"We do see a honeymoon for almost every CEO, no matter the industry," said Dobroski. "Employees are excited when a new leader comes on board, they're excited by the new vision and talk of innovation. So it's no surprise at all that Nadella's approval rating was quite high."

What was different about Nadella was the extent of his approval decline. The sharp drop of 14 percentage points in July was much larger than the typical post-honeymoon CEO slide, which for Glassdoor runs between three and eight percentage points.

Dobroski pegged the July plunge to the layoffs Nadella announced that month, when he said the Redmond, Wash. company would shed 18,000 jobs, the majority of them formerly with Nokia, which Microsoft acquired three months earlier. Thousands of Microsoft workers were also laid off, however, in multiple waves this summer and early fall.

There were early hints from Glassdoor that the layoffs had soured employees' opinion on Nadella.

The four-point drop in October -- from 78% the month prior to 74% -- also had an explanation, Dobroski contended, as did November's six-point rebound.

"His comments about gender came under fire in early October," said Dobroski, referring to Nadella's answer to a question at a women-in-computing conference on Oct. 9. "It's not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along," Nadella said when asked how women should push for promotions. "That's good karma."

The backlash was immediate, and Nadella quickly backtracked.

"Those comments definitely affected his workforce," said Dobroski, and was reflected in Nadella's approval rating.

"But we're a forgiving people," Dobroski continued. "It's like a celebrity mishap. They say they're sorry, and the audience forgives them. It's the same thing here." Apparently, Microsoft employees did just that: In November, 80% approved of Nadella's performance, a six-point increase.

Yet Nadella's approval rating, even though down significantly from its peak, remains above the national average. "The average CEO approval rating is 65%," said Dobroski. "And Microsoft's company rating [of 3.6 in November] is also higher than the Glassdoor average of 3.4."

But not everything is swell at Microsoft. According to Glassdoor's rating of the firm's senior leadership, employees don't think much of management overall.

The senior leadership ranking for Microsoft was 2.7 in November -- out of a possible 5 points -- the same as in February but down from 2.9 in June.

"Microsoft's senior leadership rating is a little below the average," said Dobroski, who pegged that average at 2.9. "The category is the lowest-ranking of Microsoft. That tells me that although employees there are pretty happy with their pay, they're least satisfied with the senior leadership. And that's not the best strategy for a company."

The companies that Glassdoor recently tapped as the best places to work, for example, sported much higher senior leadership ratings than Microsoft. Google, which Glassdoor named to the No. 1 spot on its list, boasted a senior leadership score of 3.7, while No. 13 Facebook's was 4.2 and No. 22 Apple's was 3.4.

"That's on Nadella," said Dobroski. "It's not going to fix itself. He needs to make sure that senior management and mid-level management are on the same page."

Satya Nadella approval rating, December 2014 Data: Glassdoor

The approval rating of Microsoft CEO Satya Nadella (brown bars) fell 14 points in July, the month he announced massive layoffs, and has yet to fully recover. Meanwhile, Microsoft employees rated the firm's senior leadership (black line) as below average.

Copyright © 2014 IDG Communications, Inc.

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