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Google & Employee Incentives

In: Business and Management

Submitted By maabutall
Words 3077
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Introduction
There are very few companies in the world that are successful in two realms: its personnel realm and the business realm. It has become common knowledge that Google’s employees love working at Google. They don’t simply like it, they love it. Many of Google’s employees are computer programmers and coders, and it takes more than money to both motivate them and keep them content. Google’s original “campus” in Mountain View, California, otherwise known as GooglePlex, offers employees everything they may need or want – and more – leaving them with little reason to go home at all. It is abundantly clear that this costly approach has paid huge dividends to Google.

Google’s very public relationship with its employees has been a point of fascination for me for quite some time. Google’s bold approach in creating the campuses, and the fashion in which they buck the trend in the traditional work environment is admirable at the least. Other than the physical structure of their offices, Google has implemented another tool in working with their employees – they have implemented the 20% rule, first formulated by 3M. This rule basically requires employees to spend 20% of their time on projects of their own choosing – whatever it may be – as long as Google might benefit from it. This rule has had two effects on Google: (a) its employees are happier because they can spend 1/5 of their time on something they are personally very passionate about, and (b) Google has included many of the concepts developed during the 20% time in their product offering.

As the book explains, the relationship between job satisfaction and job performance is stronger in complex jobs because employees will typically have more autonomy to make decisions about their work. Google offers a significant amount of autonomy in its complex jobs, and this mix has been a beneficial one. Google stands by the conventional wisdom with respect to motivation and job satisfaction, in that they believe that without happy employees, a company cannot be successful – its managers will suffer, its customers will suffer, and it in the end the company will suffer. Although being “happy” does not necessarily equate with “job satisfaction,” nor the ability to motivate an employee, this paper explores the common threads between them, and delves into what it takes to ensure that employees are satisfied with their roles so that they can be easily motivated, accountable, and in turn benefit the company as a whole.

Background

Google was officially incorporated in 1998, and quickly moved to its current headquarters in Mountain View, California. Google was founded by Sergey Brin and Larry Page, two Stanford graduate students who would very quickly change the world. With some venture capital funds and a fantastic product, Google exploded within just a few years. Although it seems unfathomable, Gmail has only been around since 2005. However, Google’s ability to attract and retain top talent is what has kept it ahead of its competition for this entire time, helping develop products such as Gmail. On its website, Google states, in reference to its culture:

It’s really the people that make Google the kind of company it is. We hire people who are smart and determined, and we favor ability over experience. Although Googlers share common goals and visions for the company, we hail from all walks of life and speak dozens of languages, reflecting the global audience that we serve. And when not at work, Googlers pursue interests ranging from cycling to beekeeping, from frisbee to foxtrot.

We strive to maintain the open culture often associated with startups, in which everyone is a hands-on contributor and feels comfortable sharing ideas and opinions. In our weekly all-hands (“TGIF”) meetings—not to mention over email or in the cafe—Googlers ask questions directly to Larry, Sergey and other execs about any number of company issues. Our offices and cafes are designed to encourage interactions between Googlers within and across teams, and to spark conversation about work as well as play.

The reality is, Google offers even more to its employees. In November 1999, Google hired its first full time chef, Charlie Ayers, who was previously the chef for the Grateful Dead. Ayers won a cook-off competition with other contestants and what was then 40 employees chose him. Google now has over 30,000 employees around the globe.

According to Jordan Newman, a Google spokesman, Google’s goal is “to create the happiest, most productive workplace in the world.” In order to do so, it has created a workplace where there are massages, on-site dry cleaning, yoga classes, gourmet cafes, daycare, transportation services, car wash and oil changes, foreign language classes, and health care facilities – all for free. This doesn’t include the Lego play rooms, TGIF drinking days, secret rooms behind bookcases, and couches that consist of rowboats with cushions.

This also doesn’t scratch the surface of what is likely the most envied element of engineers’ jobs at Google: the 20% rule. This rule requires that engineers spend 20% of their time – or one day each week – on any project that he or she chooses. In fact, Gmail was created in the twenty percent time, and it took years of convincing to get Google to go through with it, only because they were afraid of stretching themselves too thin and extending themselves into areas that they were not previously focused on. Clearly though, they bought into it in the end, and it worked.

However, make no mistake: Google pays for these “free” services. In fact, the “free food alone costs Google approximately $63 million for just its US employees per year, or $5,000 per employee. In addition, they spend $37,000 per year subsidizing employee childcare. So, why spend the money?

Google operates under the simple presumption that the benefits outweigh the costs in the form of more productivity, lower turnover, and more great ideas that will in turn make the company money. Google associates its success with its employees’ happiness, and it certainly keeps them happy. Google has been named number one on Fortune Magazine’s Best Places to Work three times, which no other company has done. It seems to have paid off as well, with Google earning approximately $210,000 in profit per employee, more than any other tech company in its sector.

Google thinks of itself as a company that changes the world through teamwork and creative involvement, and its employees take pride in this approach. But Google also recognizes the financial importance of work, and in 2010, they gave an across-the-board raise of 10% to everyone in the company in order to retain top talent and role-players alike, all of which are integral to its success. This is not wholly out of the kindness of its heart, and Google said as much in its quarterly report:
Our future success depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees is intense, and certain of our competitors have directly targeted our employees.

Clearly, it recognizes that the paycheck still means something at Google, and all the free food, laughs, and daycare still can’t add up to a fund to provide for the long-term support of a family. In this respect, Google may be misunderstood as a place where people will work just to have fun, and although they make good money, it could be better sans perks. The truth is, the perks are above and beyond a fair and comparably wage at other tech firms, and Google is proud of that.

The work environment is continuing to evolve around the country and around the world, and it varies from industry to industry. Many more people are working from home, or doing so for a certain number of days a week. Although this is great for job satisfaction from an individual standpoint, it is a great detriment to the company in that it harms the culture and the employees’ connection to the company. This is one of the first things that Marissa Mayer, a former Google executive, changed at Yahoo! She essentially forced employees to come into work – no more working from home. Managers have to find more and more creative, yet practical, ways to lure people into work while at the same time making sure the employees are glad to do it. Google has been a leader in job satisfaction through its creative and evolving approach to work in its physical and nonphysical respects, and they offer great insight into accomplishing this at our own organizations, albeit on a different scale.

Job Satisfaction

The conventional wisdom that “Happy workers are productive workers” certainly rings true at Google, where the employees are given every reason not to leave work. Job satisfaction can capture a person’s general feelings about his or her work role, or it can be taken to be the sum of specific aspects of an occupation, including salary, hours, supervisors, and promotional opportunities. Although the book outlines that the conventional wisdom that happiness is correlated to performance at work is only moderately related to performance, Google has found a way to overcome this presumption, and at the very least makes it more correlated to performance. In fact, as the book concedes, happiness is more correlated to performance in complex jobs because they essentially require that employees are more autonomous in the performance of their work.

So, having recognized that satisfaction with one’s work leads to better performance, Google has harnessed a unique approach, and the atmosphere it inspires is not readily copied. What Google has done, essentially, is make the surroundings and the environment more comfortable. However, the work itself remains the same – tedious, and difficult. Moreover, the work that Google employees do requires out-of-the-box thinking, and the environment that Google has created lends itself to a communal approach to problem solving whereby each employee can help take an idea to the next step, while a single employee on his or her own may not have been able to do so and the project would have been rendered meaningless.

There are other positive externalities to Google’s work environment. Where there are “happy” employees, there are usually happy, satisfied, and loyal customers. As mentioned above, Google’s workforce is the envy of nearly everyone in every industry, and the treatment they get is common knowledge. It is not a spiteful envy, but a supportive envy, and customers respect and admire the work that Google, as a company, has done to satisfy and retain their employees. So, when a user goes to search something on the Internet, he or she happily uses Google not only because of the results it gives the user, but because the user appreciates the way Google treats their employees. Their at-work attitudes and allowances have simply become conflated with the brand image of Google.

Research has also shown that satisfaction with the work itself is strongly associated with motivation and involvement on the job, as well as decreased turnover. As set forth earlier, the job that the Googlers have has remained the same. In fact, it is because of this that Google has gone to great lengths to ensure that they keep their employees happy – because they need them to keep working on the complex and innovative issues at hand. So, the job itself is inherently satisfying due to the complexity of the issues and the coinciding reward one gets when solving the problem.

Motivation

According to conventional wisdom, motivated people are central to the success of any business. Unlike job satisfaction, the empirical studies that the book outlines are generally very supportive of this conventional wisdom. Particularly, the National Benchmark Study indicates that companies with motivated employees derive a stronger return on assets, higher product quality, greater customer satisfaction, and better stock returns than those with low levels of employee motivation. Generally, there are three things, or faucets, that fill an employee’s “motivational bucket”: the person, the manager, and the job. For some people, one faucet is more important than the others combined, yet for others they are equal. It is highly dependent on the individual.

Although it has been determined that motivation is integral, the essential question that companies like Google still have to solve is: how do we motivate our employees? It is important to note that motivation strategies are highly dependent on the individual being motivated, their history, and the context in which the company attempts to motivate them. Although Google has many programmers and coders, they have equally, if not more, people that work in HR, accounting, marketing, and the like. In other words, there is a big pool, with swimmers of very different speeds, and some swim backstroke while others are butterfly and freestyle. Google’s task is to figure out how to motivate each group of swimmers, and yet allow them to work as a team at the same rate.

Google has appealed, in part, to McClelland’s approach in learning one’s own needs. By creating a work environment that is approachable, fun, and financially stable, Google has been the invisible hand in assisting their employees to see what they really need out of their work. McClelland focused on three things: achievement, affiliation, and power. McClelland’s breakthrough was recognizing the simplicity of these needs but also that some people need one more than others.

Nonetheless, Google’s employees are in large part achievement-motivated people, who strive to solve problems, eliminate inefficiencies, and master complex tasks at low risk levels. They are “job-focused” in the sense that they want to complete the task at hand. Moreover, they are self-motivated achievers, setting their own goals (after they dream up a creative idea), and demand feedback. Google employees get feedback in various forms, but the most important is the implementation of their idea, or the natural feedback that arises when a code is implemented or a client spends more money on advertising. These self-evident achievements are important to all Google employees because they measure success in terms of what their efforts have accomplished. When they achieve them, they set new challenging, yet attainable, goals.

Importantly, those with high achievement needs begin with a bucket that is more full because she, herself, has begun to fill the bucket and can continue to do so. This is where the person is the source of motivation. Google, in its Montessori-like approach, requires these people to be self-motivated, and the employees thrive on it.

What We Can Learn

As Employee Incentives In It Companies: What Can We Learn From Google? illustrates, incentive policies and the general atmosphere at a company must take into account the different motivations behind each individual, especially with respect to IT professionals. In fact, an employee survey called Googleist showed that salary was more important than any other part of their pay, including bonuses and equity. Although this remains true, Google has proven that there are yet other important parts of their job. Essentially, they want employees to love coming to work, and to dread going home. They have done everything in their financial power to provide their employees with both great take home pay, bonuses, and a first-class – and more importantly, fitting – environment. This cannot and should not be lost among managers.

However, not every company has the same financial stability as Google. For example, the average restaurant employer does not have the financial ability to give large salaries to employees. Moreover, they can’t create the environment of their workplace based on their employees’ needs and wants. Instead, they must create an environment for the customer, which will in turn create demand for the product, and lastly create a demand for the employee. Although this is largely true at Google in the sense that they have to drive the customer to create a demand for their employees, the restaurant cannot change the actual work environment for the employee, and they cannot afford the other lavish programs that Google offers its own employees.

The same is true for a law firm, or a corporate finance company. They have many in person meetings with clients, and while Google does as well, the clients of Google simply don’t care what it looks like as long as they churn out results. Moreover, it is “accepted” by the clients in the sense that it doesn’t speak poorly of their work or motivation – in fact, Google’s approach aligns completely with what an investor or client wants – a successful company with appropriate mechanisms to attract and retain top talent.

So, what can the average company do to achieve the same results? Clearly, it isn’t only about the perks. In fact, Googleist results showed that with respect to pay, salary was the most important. But no survey can capture what is truly the most important part of the company – the environment. Despite the foregoing, the environment is largely created by the people, not the free dry cleaning or the massages or even the free oil changes. So, the focus for employers must be on creating the best team. This is not to say that this isn’t difficult and expensive, but it should also be noted that the best team doesn’t always mean the best and brightest individuals. Instead, it is the group as a whole.

As we each take a step back and look where we work and with whom we work, it is evident that not everyone who is a great employee and a great team player went to the best school. In fact, a quick perusal of Google’s website can show the same result. It is the motivated, happy individual that is willing to contribute and sacrifice for the group that creates the best team. Just looking at Google shows the same result. The amenities are so fabulous only because they need to work their tails off to achieve the results that are demanded of them. The conclusion is that in order to inspire, attract, and retain great employees, companies need to spend more time in the initial hiring process with a focus on building a team, with role players and stars alike. This is the team that wins championships and woos investors, and this is the team that creates the environment that Google’s employees truly appreciate, amenities aside. This is what the average company, and average manager can learn from Google.

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...Table Name : Employee EMPLOYEE _ID FIRST_NA ME LAST_NA ME SALA RY JOINING_D ATE DEPARTME NT 1 John Abraham 1000000 01-JAN-13 12.00.00 AM Banking 2 Michael Clarke 800000 01-JAN-13 12.00.00 AM Insurance 3 Roy Thomas 700000 01-FEB-13 12.00.00 AM Banking 4 Tom Jose 600000 01-FEB-13 12.00.00 AM Insurance 5 Jerry Pinto 650000 01-FEB-13 12.00.00 AM Insurance 6 Philip Mathew 750000 01-JAN-13 12.00.00 AM Services 7 TestName1 123 650000 01-JAN-13 12.00.00 AM Services 8 TestName2 Lname% 600000 01-FEB-13 12.00.00 AM Insurance Table Name : Incentives EMPLOYEE_REF_ID INCENTIVE_DATE INCENTIVE_AMOUNT 1 01-FEB-13 5000 2 01-FEB-13 3000 3 01-FEB-13 4000 1 01-JAN-13 4500 2 01-JAN-13 3500 SQL Queries Interview Questions and Answers on "SQL Select" 1. Get all employee details from the employee table Select * from employee 2. Get First_Name,Last_Name from employee table Select first_name, Last_Name from employee 3. Get First_Name from employee table using alias name “Employee Name” Select first_name Employee Name from employee 4. Get First_Name from employee table in upper case Select upper(FIRST_NAME) from EMPLOYEE 5. Get First_Name from employee table in lower case Select lower(FIRST_NAME) from EMPLOYEE 6. Get unique DEPARTMENT from employee table select...

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