New York, Apr 22 (PTI) As part of its efforts to retain talent, software giant Microsoft is all set to hike employee salaries and increase funding for bonus and stock awards

The company is announcing changes, including higher compensation, that would benefit employees, Microsoft CEO Steve Ballmer said in an internal memo.

These changes represent the most significant investment in overall compensation we have ever made, he added.

He said the there would be readjustment of a portion of stock options which would result in "more cash up front" to employees

Microsoft had about 89,000 employees worldwide at the end of June 2010, with 54,000 in the US.

Like many other companies, Microsoft too is grappling with the possibility of talent being poached by competitors.

Also, increasing competition and rising number of start-ups are also posing problems, especially in terms of talent retention.