This is the first of the 2 part series on World's Best Employee Engagement Strategies. This series explore the employee strategies implemented by the world's best places to work.
This article is a long read and below is a quick overview of Google's employee engagement strategies that will be discussed:
1. Nurture creativity and innovation
2. Dynamically improving people strategies
4. People analytics for people management decisions
5. Culture of praise and recognition
6. High payroll expense to revenue ratio
7. Feedback based policy making
Back in 2006, Google made headlines when they introduced their novel transferable stock option program for their employees. Then again in 2012, they introduced first-of-its-kind employee death benefits, disrupting employee benefits at the private sector. While a majority of organisations fight for the ‘better’ workplace dais, there are a few companies that consistently are far ahead in the race. These organisations are benchmarks for employer branding and they achieve this through radical employee engagement strategies. This article studies the remarkable people initiatives of the Forbes No. 1 best place to work of 2019, three years in a row– Google (Alphabet Inc.)
Sustaining innovation is vital for a high growth, high market-cap company like Google. The company believes that recruiting and retaining innovators is their competitive advantage. Their superior business results are a result of their people managers making exceptional people management decisions. Google’s employee engagement strategies are seen to be designed around the following-
1. Culture of Innovation
Google’s Co-founder Sergey Brin states that the innovative employee is the bedrock of their culture - probably why a Googler is surrounded by facilities that nurture innovation. Their people management practices like choicest hiring, employment security, flat organisational structure, best in the industry benefits, etc are core to this culture of innovation. Eric Schmidt, in his interview with Tyler Cowen, talks about how innovation is vital to their growth plan.
“We don't plan to a growth level, we plan to an innovation level. Our idea is you just keep inventing new stuff, and it grows as quickly as it can. And there's some capacity with which we can deliver these to customers and that they can adopt them.”
Following are a few ways Google leaders nurture the culture of innovation:
a. Accommodation of Failure
Google believes that failure is a necessary part of innovation and gives employees complete work autonomy. Moreover, their work environments are uncluttered anf they are given freedom to freely express their ideas and opinions.
For instance, employees can take up the 20% Creative Time Program to pursue their learning interests or out-of-curriculum projects. These programs let employees spend 20% of their time in challenging projects of their choice that are ‘exploratory’. Essentially, they can test the potential of their ideas without the fear of an impending deadline.
The 20% Creative Time Program has had phenomenal impact on Google’s product innovation. AdSense, which now contributes $24.1 billion out of the $27.77 billion of Google’s revenue (Q3, 2018) was once such a project.
Google is completely open to dress codes, informality in authority relationships, flexible working hours, dynamic meeting settings, ease of decision making, free flow of communication, disagreements, conflicts and work-life balance.
They have a diverse population of employees and have numerous subcultures across their teams. Google is highly receptive of these subcultures and even find these essential to their work environment. These subcultures could be amongst work groups, ethnic groups, nations, occupations, interest areas and echelons in the hierarchy and product lines.
There are communities of bicycle-to-work enthusiasts and environmentalists. That said, the organisation is also keen about environmental conservation and makes every effort to be as energy efficient as possible. They subsidize employees who buy hybrid or electric cars and who install solar panels in their homes.
For sport enthusiasts, the Google Mountain View campus contains a swimming pool, beach volleyball court, a climbing wall and running trails. Employees get subsidies on work out sessions, gym memberships and massages.
Google is also open to social events, jargons, dresses, symbols, rites and rituals that might be important to any of these subcultures. For example, they respect the national culture of their staff, giving them the right to wear traditional clothes.
There are international online forums that let Googlers to find the community they want to get involved with – for instance, there is the Gayglers community for the lesbian, gay, bisexual, and transgender [LGBT] affinity network and Greyglers for the Googlers who are over 40 years old.
c. Work environment
Google’s corporate culture is distinct, since a majority of the team are alumni of the world’s most prestigious institutions. The new offices are designed with unique motifs, never replicating a feature of an existing office. Their workspaces are full of individuality and it barely resembles a traditional working place. There are elements and areas to these workspaces that aid work, relaxation, exercise, reading and watching movies.
For example, they are pioneers in having premium and free employee pick-up services. Their buses are spacious and Wi-Fi-enabled - that allow them to work even while they are travelling.
Their omnipresent gourmet cafeterias and snack rooms on campus are to abide by the rule that no employee should have to move more than 100 feet from their workspace, in search of food.
They offer child care services for parents and 100% health care coverage for all their employees and their families.
2. Dynamic People Strategies
The strategic decisions at Google are always left open to scrutiny. Every decision made is experimented and improved upon vigorously – and the team believes that this activity is vital to a strategy’s success.
Project Oxygen is one of the widely discussed initiatives of Google that rightly demonstrates this.
In July 2001, Larry Page decided to fire all of Google's project managers. They were working on the assumption that the company was into technical innovation and that managers limited the engineer’s autonomy. This decision, though, was quickly reverted because it hampered the functions of teams. Managers were rehired and team wise functioning resumed that has grown into a global 85000-strong workforce - 30% of it being managers.
The downside to this experiment was that it resulted in a grapevine that managers actually do not add value to the organisation. Google leaders decided to control this bias using data.
They used Google's People & Innovation Lab or “PiLab” for the job. PiLab plotted historical data of performance review and employee survey scores on a graph and cut the data into Quartiles. The top quartiles consisted of the best performing managers and bottom quartile consisted of the worst performing managers. They correlated this plot with the team productivity, team happiness and employee retention. Using regression analysis, they found immense correlation between managers and the team’s performance. They published this report for all employees to understand the critical role the manager plays in the performance of the teams.
3. Managers as Leaders
The leaders of Google are deeply concerned about the demands and abilities of individuals. As discussed in the previous pointer, managers were proved to be the key to team productivity. Pilab even extended this research to define what made a manager ‘good’.
They started two qualitative researches –
They introduced “The Great Managers Award” and to nominate a great manager, the team member had to list the qualities that made him/her a great manager. The key word analysis of this research gave birth to the famous “The eight (8) Behaviours those great managers at Google possess” guidelines:
- Be a good coach
- Empower your team and don't micro-manage
- Express interest in employees' success and well-being
- Be productive and results-oriented
- Be a good communicator and listen to your team
- Help your employees with career development
- Have a clear vision and strategy for the team
- Have key technical skills, so you can help advise the team
The second research they conducted was a double blind interview study where they interviewed both great managers and managers who were not rated ‘great’. They intended to find the things that successful managers did do and unsuccessful managers didn’t do. This study gave rise to the “3 Pitfalls – what causes managers to struggle” guideline for the manager.
Given below are the pointers of the guideline:
- Have trouble making transition to team leader
- Lack a consistent approach to performance management and career development
- Spend too little time on managing and communicating
4. People Analytics
Laszlo Bock, Head of People Operations at Google once stated that “People operation” is a combination of science and human resources. Google looks at everything from the perspective of data and they believe operating HR is also a field of science.
They constantly experiment and innovate to find the best way to satisfy employees and to help them work effectively. They do this by creating people strategies as per the results of data analysis.
The analytical value chain at Google starts with previous experiences and opinions of the leaders – this is when framing the hypothesis happens. The next level is the HR data that consists of the number of people promoted, statistics of the current employees, percentage of people leaving, statistics of the people leaving, etc. The third level to the analytical value chain is the metrics. Metrics are counts and ratios that are of significance to the management. Examples of Metrics are employee turnover, manager to employee ratio, etc. These metrics are tracked across time periods to create cross sectional and time series data. The Analysis level finds correlations between data and their mutual effects. This provides insights into creating strategies. It is during the Action level that these insights are framed into new policies, strategies and new introductions or changes to employee programmes.
For example, the very organizational design of Google is done using a statistical organizational planning tool that helps in hiring and scaling up of the resources.
Laszlo Bock, while he was the Senior Vice President of People Operations (HR) at Google, conducted a long-term research study focused on developing a scientific understanding of the work experience – this is named gDNA.
5. Culture of Praise and Recognition
“There’s no simple formula for success, and there’s no simple formula for being a great leader. It’s a unique set of skills. But it is well understood that if you yell at people enough, they will quit, and if you’re nice enough to them, they are less likely to quit. But it just seems to me that if you take a moment, and you add the preamble of “Thank you” or “I appreciate it,” or “I recognize it,” people’s hearts sing, and you get a lot more work out of them.”
Google used to give exorbitant cash rewards, but phased it out based on employee feedback and rolled out gifting experiences. The employees have reported that experiences were more fun, memorable and personalised than cash rewards – and an opportunity to have their dream vacation.
Googlers can even send each other thank- you notes. There are “Walls of Happy” where thank you notes are posted to demonstrate the appreciation employees have received.
Google also uses two specific types of bonus programs:
- Spot Bonuses that are used to recognise special behaviours of the employees by the managers
- Peer Bonuses that enables employees to recognize each other. This is ideally to cover the behaviors to be recognized that might have been missed out by the manager.
These rewards are for employees who have gone beyond their normal duties to complete a task at hand, like, working extra hours to finish a project or fixing an issue.
At Google, there is also a “no name program” that was designed for executives to reward teams that are achieving exemplary performances. They receive team celebrations or team trips as incentives.
6. High payroll expense to revenue ratio
Eric Schimdt says in a CNBC interview, “Every day I turn around, there's some new benefit that we've come up with for our employees. It's part of our culture; we're happy to do that. And, of course, we have gross margins to afford it. So higher gross margins is one of the explanations.”
Google’s Payroll-related costs account for about 50% of total expenses, which is very high compared to other firms in Google’s industry sector. The reason for the exceptional contribution is Google’s goal to have the best people in the right jobs and to have low turnover. They have correlated their success directly to employee satisfaction and have considered their employees as their main asset. To say Google has yielded exceptional results because of this strategy is an under-statement - Google has fared exceptionally well as a product, brand and a workplace over the past decade.
7. Feedback based policy making
Employee Resource Groups (ERGs) provide valuable feedback on Google’s HR programs and policies. There are currently 13 Employee Resource Groups (ERGs) with more than 250+ chapters globally.
Google also has rigorous employee feedback mechanism called the Manager Upwards Feedback mechanism where the employees are asked to rate their manager based on the following questions:
- My manager gives me actionable feedback that helps me improve my performance.
- My manager does not “micromanage” (i.e., get involved in details that should be handled at other levels).
- My manager shows consideration for me as a person.
- The actions of my manager show that he/she values the perspective I bring to the team, even if it is different from his/her own.
- My manager keeps the team focused on our priority results/deliverables.
- My manager regularly shares relevant information from his/her manager and senior leaders.
- My manager has had a meaningful discussion with me about career development in the past six months.
- My manager communicates clear goals for our team.
- My manager has the technical expertise (e.g., coding in Tech, selling in Global Business, accounting in Finance) required to effectively manage me.
- I would recommend my manager to other Googlers.
- I am satisfied with my manager’s overall performance as a manager.
- What would you recommend your manager keep doing?
- What would you have your manager change?
As a result of the gDNA study(as stated earlier) - they formulated a gDNA survey. Thousands of randomly selected Google employees complete the gDNA survey each year. At Google, software engineers nominate themselves for promotion when they feel they’re ready to take on more responsibility. Employees use a tool called Google Moderator to ask questions and vote on others’ questions they want answered. Every Friday, the company holds an all-hands meeting where company leaders respond to the most popular questions of the week. Leaders use a charting tool called Google-O-Meter to measure the popularity of different employee suggestions. Leaders also schedule “Fixits” to solve big, urgent problems. Fixits are 24-hour sprints where teams focus 100% on finding solutions to specific problems. They also have engagement surveys, pulse surveys, anonymous forms, or even just a basic pen-and-paper suggestion box.
Larry Page in Alphabet’s home page quotes, “As Sergey and I wrote in the original founders letter 11 years ago, “Google is not a conventional company. We do not intend to become one.””
Their people strategies are a confounding representations of this ultimatum. Every activity and every people policy of Google has the potential to become individual research topics. Even as a young company, Google has managed to outscore hundreds of other great companies through their breakthrough mechanisms to create and change employee engagement strategies. They laid a foundation so strong in disruptive innovation that they do not need any external benchmarks for their performance. They set their own standards, studied their own data, read their own people’s minds and framed their own rules to the game – to become what they have become.