Being The Best Employer There Ever Was
Workplace to some of the world’s brightest minds, Google is one of the worlds most successful and powerful companies. It is a dream job for many.
But what makes Google the best place to work?
Google’s consistent ranking at being the best employer in the world isn’t just because it means working in a powerful company, or because it brings in a fat lot of stock options. It’s much more than that!
It is the consistent hard work put in by one of the world’s most innovative HR departments, Google’s People Operations, and its mastermind Laszlo Bock, head of People Operations and a champion of Google’s in-house culture. ‘Work Rules!’ (2015), delves into what consistently makes Google the best employer in the world.
Mission, Transparency, And Voice
Google has a powerful yet simple mission – “to organize the world’s information and make it universally accessible and useful.”
Rather than imparting a commercial meaning, the mission gives a profoundly moral sense to the work the employees do. Every bit of work done at Google makes it possible for users worldwide to find the information they need through the search engine.
It is different from other typical mission statements like ‘becoming the market leader’. Such statements, once achieved, serve no actual inspirational purpose. Google’s mission statement has no ceiling, and thus, inspires employees to constantly search for new ways to organize information.
Transparency is another key tenet of the culture one finds at Google. Any employee at Google can access everything, right from product launch initiatives, to other employees weekly reports, in addition to their projects.
Every week, the CEO of Google updates the whole company on the ongoing events of the past week and encourages a Q&A session for half an hour after. This ensures that everyone knows who is working on what, who the go-to person for any particular project is, and that no work is doubled-up unnecessarily.
Google ensures that it gives each employee a voice. They essentially value the inputs of each employee, ensuring that they have a say in how the company is run. Most of the company’s practices have originated from employees.
Looking Beyond Degrees
There are two primary ways to get exceptional employees – either hire the best or train the average ones. At Google, they prefer to hire the best!
Any average company, according to the Corporate Executive Board, pays around $450 for hiring and $600 for training. Considering a worst-case scenario, after hiring, a great employee could perform at a mediocre level. However, the worst-case scenario of hiring an average candidate is that they drain training resources and they perform low to boot. Comparing the scenarios, it’s obvious what most companies are doing wrong!
At Google, a lot of time and resources are invested to find the right candidate. Google hires only 5000 a year out of the 1 to 3 million applications they get each year. With an admission rate of 0.25%, they are extremely scrupulous for a reason.
Initially, Google only hired about a hundred employees per year from a pool of only Ivy League candidates. Over time, Google realised that a number of their best weren’t the ones from these illustrious institutions. They soon started looking for candidates who showed more promise in overcoming obstacles and were more resilient.
They looked for people who were better than them and hired those who could make everyone around them successful. Thus, they carefully sift through the best performers.
For example, the VP of People Development at Google, Karen May, actually had turned Google down repeatedly for four years, when she owned her HR consulting firm. Google persisted and waited patiently until she finally agreed to join the team.
Let The People Run The Show
Most companies are contradictory when it comes to their expectations from employees. While on one hand, companies expect employees to show autonomy and initiative, they have managers who control the employees’ salary, workload, day-offs, promotions, etc.
At Google, everyone’s the same. They have reduced bureaucratic hierarchy and have liquidated status symbols. Every employee, from a new hire to the executives, gets the same support, resources; funding, etc. Furthermore, there are only 4 levels at Google, individual contributor, manager, director, and VP.
Google has a culture where managers are trained to lead their teams through inspiration. If any employee has aspirations to become a VP, the employee has to first show the skills by leading their team and project to success.
Every project, though run by the employees, has a final decision-maker. At Google, rather than having managers make these decisions, they rely on data. This ensures that the decision-making process is transparent, unbiased and in alignment with one of Google’s core principles – “Don’t politick. Use data.”
This core principle also helps in addressing sensitive topics such as rumours and gossip, as well.
For example, the VP of Google used data to prove that promotions at Google are unbiased. When rumours that working in the headquarters would guarantee a faster promotion were doing the rounds, she used data to prove that promotion rates at the HQ were the same as any other Google office.
Transparency through data management and open discussions makes it easy to hand over power to the people, leading to the best ideas.
Seize The Best And The Worst!
Looking at the performance curve of most companies, one finds that the best and the worst make the two ends of the curve, while the rest of the chunk – the average performers – make up the middle. Additionally, one sees a classic pattern where the minority of the top performers give the majority of the successes in the company, whereas the rest simply tag behind these successes.
The poor performers in any company are often let go, and new hires replace them. These new hires, unfortunately, need to be trained, and there is no guarantee of their performance either. Most companies focus on training and bringing the average middle chunk up to mark, often ignoring the top performers, and not utilizing their skills to the maximum.
What does Google do differently?
Google keeps its focus on the top performers, studies these people who are familiar with best practices, and helps those who need to improve. Rather than focus on the best practices of other companies, Google works to study and analyse their own, a proven tactic from Harvard professor Boris Groysberg’s research that shows high performance is contextual.
Google’s PiLab, or People and Innovation Lab, is their internal research team that helps the company study the best practices within the company.
PiLab’s Project Oxygen proved that top engineer performance needs a great manager. It showed that engineers who had great managers performed 5% to 18% better than ones with weak managers. The project also identified best management practices so that the knowledge could be shared with all managers and help improve weak ones.
In addition to this, the bottom 5% performers at Google are regularly identified and offered training to improve and even opportunities to re-fit into other roles. Google goes a step ahead because they know that poor performance can also be a result of a lack of motivation or skill, stemming from personal issues.
Using The Best In-house Resources For Training
In 2011, American companies spent an annual $156.2 billion on training programs. As seen earlier, most of the amount spent on training employees often goes to waste. There are several reasons why this happens.
Firstly, training is designed and imparted by the wrong people. Secondly, they are too general to serve a specific purpose, and thirdly, the training results don’t get analysed to effectively measure successes.
While the general understanding is that it takes about 10000 hours to master any skill, according to Anders Erricson research, it is best to divide the needed skills into smaller tasks and aim for a specific improvement one by one, via feedback, correction and repetition.
The global consultancy firm, McKinsey sends their second-year consultants for an Engagement Leadership Workshop, training them to deal with irate customers. During the training, the participants are taught the basic rules and then are asked to role-play the scenario. Next, they are shown the video of their role-play and are encouraged to observe and discuss. This process is repeated till every desired outcome is seen in the behaviours of the consultants.
While the training is expensive, it helps consultants retain the specific skills to deal with irate customers and imbibes excellent skills. They measure the success of the training, not through money or time spent in training, but through changes and improvement in consultant behaviour.
At Google, while they apply a similar principle, they also look for trainers within the company itself. For example, they seek out the best performing sales manager to impart sales training to sales reps.
This tactic has a two-pronged purpose – to save training costs, as well as create a close-knit community and culture within the company.
The Benefits Of Unfair Pay And Rewarding Failure
Rewarding failure and unfair compensation are often seen as an absolute no! Then why does Google do it sometimes?
Compensation is a touchy matter. In most companies, compensations have ‘fair’ and ‘position-wise limits. Often, these salary caps also have regulations such as not having more than a 20% difference between salaries for similar positions, strapped to compensation. The result is often the top performers looking for better compensation in other companies.
Google understands this issue. Hence, they sometimes pay ‘unfairly’. For example, one may find that a junior top performer at Google gets paid more than an average performer in a senior role. Or, one employee may receive $10000 as a stock award, while another in the same position might get awarded $1 million in stock.
Another tactic Google employs to retain employees is by offering them an experience rather than money. They learned the effectiveness of this tactic the hard way.
Google had, in 2004, introduced a Founders award for performance. That year, they awarded $12 million to two teams. The next year, $45 million was divided as an award between 11 teams. However, this monetary award had quite the opposite effect that it should have. Employees started looking for other jobs, where the possibilities of getting a generous reward were higher.
This experience made them realise that rather than just monetary rewards, awarding employees with experiences such as a paid vacation, or a dinner for 2, helped create memories, and was more effective at retaining employees.
Additionally, Google also rewards employees when it is least expected.
One of the teams that had worked on their real-time collaboration tool Google Wave for two years chose to forgo their bonuses and opt for a higher compensation via stocks if Wave succeeded. Wave, however, failed. But the team was awarded bonuses nevertheless.
Google knew that the team had put in hard work, and understood that efforts towards hard work, innovation, and wanting to explore the unknown should be rewarded, even if the project fails.
Confronting The Dark Side Of Culture
Google is known best for empowering its employees. It is furthermore successful because it believes in transparency, and gives its employees a voice. However, sometimes, these very best practices can backfire. Google, nevertheless, knows how to handle these.
For instance, Google had at least one major leak per year. These leaks are investigated, and the party who is responsible for the leak – whether by accident or by design – is fired. Upholding their values of transparency and openness, the company then lets every employee know what was leaked, who did it, and what happened to the person involved. Considering maintaining their values, the price of a leak is very small.
Another issue Google sometimes faces is the huge influx of ideas that result from their culture of fostering innovative thinking. More often than not, these ideas have to be culled, or adjusted to keep the company running. For example, between 2006 and 2009, Google had released about 250 products, which were later discontinued.
It is the responsibility of the CEO, Larry Page to conduct an annual spring-cleaning, to weed out waning products, or products that are getting outperformed, or ones that don’t have good market prospects. The company additionally, is open about why the product got culled. This helps the company maintain its direction and focus, retain managers whose ideas get shelved, and not antagonize them.
Another dark side of culture that Google experienced was when one employee was unhappy with the cafeteria using smaller plates. In protest, he and some other employees started throwing forks in the trash can and even threw food at the cafeteria staff.
Next, when the company introduced Meatless Mondays to promote employee health, one employee threatened to move to Facebook, Microsoft, or Twitter via an anonymous survey. Google shared this survey with the employees. Many employees were embarrassed by the actions of the person and this led to a reduction in levels of abuse.
This was an example of how even perks and benefits can turn sour. The point is that a company should know how to handle these dark sides of culture.
Google is consistently ranked the best employer for a reason. The strategies and tactics they employ help in creating a people’s company and maintaining success.
Having a ‘ceiling less‘ mission, nurturing values of transparency and openness, giving employees a voice, looking beyond degrees while hiring, encouraging the top performers and giving the bottom ones a chance, using the best in-house trainers, using pay benefits and rewards wisely and understanding that having a great culture can backfire and how to deal with it, are just some of the strategies that make Google the place to be!