One of the major design goals of the CPU scheduler is fairness. CPU time consumption of virtual machines has to be faithful to the resource specifications like CPU shares, reservations, and limits. The CPU scheduler is based on the proportional share algorithm. The CPU scheduler aims to maximize CPU utilization and world execution efficiency, which are critical to system throughput. The scheduling is usually based on world.
For an example, A virtual machine consists of one or more vCPU worlds on which guest instructions are executed. For example,a 4-vCPU virtual machine has 4 vCPU worlds. There are other worlds associated with the virtual machine that execute management tasks like handling the mouse and keyboard, snapshots, and legacy I/O devices. Therefore, it is theoretically possible that a 1-vCPU virtual machine can consume more than 100% of a processor,although this is unlikely because those management worlds are mostly inactive.
Refer http://www.vmware.com/files/pdf/techpaper/VMware-vSphere-CPU-Sched-Perf.pdf for more information.