Human Resource Management

Individual Report

January 2013

Introduction
Managing Human Resources effectively has become vital to organizations within the modern and fast paced business environment. Today’s market demands knowledge innovation and trust more than mere comparative analysis of sales/services and market share, and the hierarchy of the centre and periphery model is evolving into a different paradigm.

Human Resources specialists are more important in business strategies today as there’s a change in market dynamics; more so in the present economic situation of a global recession and downturn across industries as economies around the world are globally connected and interdependent. An organization with performance driven HR planning and development practices distinguish itself from competitors and brings quality & loyal workers who are committed and passionate about the success of their organization.

In order to understand the concepts and HRM strategies/practices learned in lectures better, I have chosen the company that has ranked 1st on ‘100 Best Companies to Work For’ list of Fortune (a well-known international business magazine) for 2007, 2008 and 2012.
, based in Mountain View, California, Google is the world's most popular search engine. The company started out of a garage in 1998, has generated wealth faster than any company in history and now dominates the worlds’ information industry. Currently, Google has more than 30,000 employees worldwide is not just known for its innovative breakthroughs in the technology industry, but is also known for innovative human resources (HR) policies. Google is an icon of success among Internet companies.
A survey conducted by Business Week magazine showed that Google was the most sought after company by college students, MBAs, women, engineers, and diverse individuals. As of 2008, Google receives an average of 3000 resumes a day (estimated 1.1 million a year) for an average of only 4000 available jobs a year. Google offers benefits that no other companies offer and it doesn’t pay for all the incentives out of their allotted administrative expenses; it’s all from company’s profits. Google has also made it so big that its company name has become a verb in dictionary!
According to the web giant's manifest, the core principle is- always putting the user first, written as "focus on the user and all else will follow," being socially and ethically responsible, written as "you can make money without doing evil," and maintaining a fun, informal, and non-bureaucratic environment, written as "you can be serious without a suit". These three main points have become the mantra that defines all of Google's actions, and are the principle reason behind Google's massive success.

Discussion
First and foremost, Google recognized that company success is linked to employee’s success. Business strategy = HR strategy, it is viewed as the same. Google believes a fun, informal, non-bureaucratic corporate environment leads to a more engaged, more happy, and more creative personnel, and employs many practices that reflect these beliefs.
HR practices at Google, is named 'People Operations'. It is not a mere administrative function but to ensure the building of a strong employee-employer relationship. Google have also gone though extraordinary step of changing the way employees work in order to attract and retain the very best. Google VP Operations, Liane Hornsey mentioned on Television show- MeetTheBoss’s interview that they care about employee’s work life balance, so they offer flexible work hours, part time work options, and telecommuting if the specific job allows. They have put in a lot of effort to make it a place where people want to be. Google's HR practices clearly reveal the impressive results of the company's approach, which help in increasing employee productivity.

HRM Strategies
There are many strategies used by Google but the focus for this report is on three main unique strategies that differentiates it from the rest. 1. Staffing and recruiting process
How an organization chooses its members have critical impact on organization’s ability to compete. Hiring the right people is a key HR philosophy at Google and it has created the phenomenon in recruiting by developing the world’s first “recruiting culture” (from top to down level employees) that is completely different from everyone else.
Getting the job is no easy task as they only take the incredibly talented workers from all over the globe, preferring ability over experience. Former Google CEO, Eric Schmidt, said Google has brought in candidates as many as 16 times before ultimately letting them in. Schmidt provided a little more insight about recruiting tools used by Google. (As shown below)

Recruiting tools of Google Employee referral | Google’s referral program is without any industry leading features, but the company’s strong brand coupled with its highly enthusiastic workforce makes up for weaknesses in the program. | College recruitment | Google hires a large number of PhDs on the premise that they enjoy exploring areas that no one else has explored. To accomplish this, they have developed a network of direct relationships with over 350 professors at major schools. In addition, Google has an outstanding internship program that has a very high conversion rate to permanent hires. | Professional networking | Google also effectively uses networking groups like Linkedin and other live professional events to recruit top performers. | Recruiter training | Google is one of only a handful of companies that requires most newly hired recruiters to go through extensive recruiter training prior to starting. | AdWords as a recruiting tool | Google’s 1st “wow” approach is its use of its own Google search tool to find “passive” candidates. Because Google is recognised as the master of search, it’s not surprising that they utilise their own search tool to find top candidates without active resumes. In addition, they attract top performers by placing their own job ads that appear when certain keywords are typed into a search. | Contests as recruiting tools: | A 2nd “wow” aspect of Google recruiting is its use of a contest to identify and attract top software engineers. The Google Code Jam, as they call it, is a global online software writing contest that can attract over 7,500 people each year. The top 25 finalists are invited to the Mountain View campus to compete for US$50,000 in prizes as well as a chance to work at Google. The contest is powered by TopCoder, a vendor that helps manage the contest and score the winners. | Brain teasers as recruiting tools | The 3rd “wow” aspect of Google’s recruiting is its creative use of roadside billboards and math tests placed in magazines to garner the attention of math and programming wizards. Google has placed brainteaser billboards in the Silicon Valley and by Harvard Square. The math puzzles on these billboards challenge mathematics-oriented people and get them thinking. Although they do not specifically mention Google, the billboard puzzle does eventually lead interested participants to the Google site. | Friends of Google | The final “wow” recruiting tool is the “friends of Google” system. This tool creates an electronic email network of people that are interested in Google and its products but not necessarily interested in working for the company. By signing up these individuals and then periodically sending them emails about the firm’s products and events, Google can build a relationship with thousands of people that like the firm. |
(Sullivan. J. 2006)

Google believes that each and every hire is important because they are proud of their culture, they do not want to dilute it. Therefore, they want to ensure that everyone they hire fits in. Method such as 360 degree decision around the people they hire and hiring through consensus are used. They are explicitly seeking to attract the kind of people to the company who will be successful in their open, collaborative culture.

The median age of employees at Google is 27 years, making it the youngest workforce across the industry. However, the retention rate, and the turnover data at Google proves that the organization has been successfully able to attract, retain, and motivate the most difficult crop of employees – the Y generation cyber‐generation professionals who are prone to changing their affiliations quicker than they change their clothes.

2. Compensation Structure and Benefits

* Compensation

Pay has large impact on employee’s attitude/ behaviours; a motivator that can substantially promotes an organization’s success. Compensation also comes in the form of bonuses to motivate performances, while at the same time control fixed compensation cost. Individual incentives, group incentives as well as profit sharing (via company stocks) are given in Google.

Google’s compensation program, also called “pay-for-performance”, focuses on providing reward for strong performance as well as training for overcoming weaknesses for underperformers. There is also an increase in the proportion of compensation in accordance with the levels of leadership and responsibility.
According to a research conducted by Glassdoor (a career and workplace community) in 2008, software engineers at Google draw an enviable compensation package as compared to their counterparts at Microsoft or Yahoo.

(Glass door. 2012)

(Softpedia. 2008)
Google became the first company where the Board of Directors requested for a reduction in their salaries and compensation because they felt they were getting paid more money than they needed. Founders Sergey Brin, Larry Page and CEO Eric Schmidt requested that their base salary be cut to $1. Subsequent offers by the company to increase their salaries have been turned down because their main compensation continues to come from owning stock in Google.
In 2008‐2009, all the employees agreed on the sentiment and formally demanded a wage cut themselves. During the same period, the turnover was low at 1.43%. It is definitely very unusual and in 2011, Google issued a 10 percent raise to every single employee working for the search engine giant.
Performance management is done every quarterly and Google takes it very seriously as they are performance cultured company and performance appraisal has impact on compensation.

* Benefits
A safe and happy workplace makes the employees feel good about being there. It is achieved through internal surveys to find out whether they are satisfied and if not what they think needs to be changed. Incentive goes a long way in boosting the staff morale, motivation and incentive to stay and it has been seen that this works wonders in getting the best out of the employees.
Google employees receive a comprehensive benefits package that is breathtaking: * Flex hours for nearly every professional employee * Casual dress everyday * Pyjamas day, TGIF parties every week and charity events on-site * Employees can bring their dogs to work every day (so long as their co-workers don’t mind, the dogs are not aggressive, are free of fleas and the owners clean up after them) * On-site dentists and doctors * Free on-site salons and barber shops * Health benefits * Tuition reimbursement * Adoption assistance services * Financial planning classes * An on-site fitness centre, complete with weight room, lap pool, personal trainers, yoga, massages, rock-climbing walls, beach volleyball and roller hockey twice a week in the parking lot. * Free recreation game rooms everywhere (includes pool tables, foosball, ping-pong, and arcade games. * Stock options everywhere * Free drinks and snacks available everywhere * Free meals from 11 on-site gourmet restaurants (first class dining prepared by world-class chefs) * Three weeks’ vacation during the first year * 27 days of paid time off after one year of employment * Six weeks paid sabbatical available for every 6 years an employee works there * Available resources to study 4 foreign languages: Madarin, Japanese, Spanish and French. * Valet parking for employees * Onsite car wash, oil change, banking centre and courier * Maternity and parental leave (18 weeks of additional paid time off post maternity leave; new fathers can take 7 weeks off) * Reimburse up to $500 in takeout for the first 4 weeks of an employee’s maternity leave. * Employee referral bonus program, a $2,000 reward for referring new employees * Onsite child care centre and elderly care centre * Back-up child care for parents when their regularly scheduled child care falls through * Free shuttle service * Fuel efficiency vehicle incentive program ($5,000 assistance if you buy a hybrid) * Free Onsite dry cleaning (a coin-free laundry room) * A 401k investment program * A “no tracking of sick days” policy, unlimited * Employee interest/hobby groups (formed by Google employees, these are all over the map and are said to include Buffy fans, cricketers, Nobel prize winners, salsa dancing and a wine club) * A founders award, up to millions of dollars (literally), for new program ideas and designs. * Annual on‐site Health Fair offering free testing services, including eye exams and cholesterol testing; also offers free flu shots

Source: Google. 2013.

In addition, Google offers free bikes, sagways, and scooters to employees as a form of transport around the facilities. Google also lets employees establish in-company clubs, such as the "Black Googlers Association" and the "Gay, Lesbian, Bisexual and Transgender Googlers Association”.
These benefits are also designed to encourage collaboration, to break down barriers between functions, and to stimulate individual creativity and innovation. However, these benefits do attract some of the “wrong people”- talented individuals who are seeking benefits rather than an opportunity to do their best work, which creates a screening challenge. In addition, these may distract less-focused workers from their jobs.

3. Informal Corporate Culture
Google's legendary organizational work culture has contributed largely to its success. In contrast to most large companies, Google believes that "smart people and good ideas are better than procedures, rules, or strong-armed leadership," and so does not employ bureaucracy with its employees. Bureaucracy implies strict division of labour, rules, and standardization, which are the opposite of Google's goals - to maximize the creativity and collaboration of its employees with hopes that this will lead to the best products and solutions possible. Thus, Google use informal, equal, involvement, and empowerment management tactic (an aversion to bureaucratic, formal, and money-centric ideologies of large corporations). They feel that operating with very little bureaucracy it will encourage their employees to develop good ideas at a faster pace; hence Google removed unnecessary managerial hierarchies. The organizational structure is very different because they are made up of many shareholders that have a say in what the company does and turns into.

Many organizations have changed their pay or benefits in order to attract better workers, but no one has changed every job in the company just so that the work itself is the primary attraction and retention tool. Google’s founders (Larry and Sergey), HR director Stacy Sullivan, and the leadership team at Google have literally crafted every professional job and workplace element so that all employees are: * Working on interesting work * Learning continuously * Constantly challenged to do more * Feeling that they are adding value
(Sullivan. J. 2005)
Google emphasizes this policy to keep employees motivated, nurture new ideas, and foster creativity. Workers are expected to take initiative, and are not constantly pushed, watched, or instructed by upper management. Google uses a very strict recruitment process to make sure its employees are self-motivated. Not only must you be the best in your field, but you must "share a commitment to creating perfection and having a great time doing it". But once an employee is hired by Google, they are given a large degree of freedom in how they perform their work, because, at Google, how efficiently you make something isn't as important as how useful the end product actually is.

* Innovation Time Off- 70/20/10
Google came up with a formula for its employee to follow to ensure creativity. Employees divide their time at work accordingly: * 70 percent are to be devoted to core business/job scope * 20 percent (equivalent to 1 day of the working week) on a researching project of their choice/interested them, related to their business * 10 percent to unrelated new far-out ideas/business
Google funds and supports these projects/ideas. The engineering and design staffs make use of the “free time” to pursue new products and technologies. It is mandatory for all employees to undergo T&D sessions for a minimum of 120 hours/year, which is about three times more than average of 43 hours/year. This rule has a good return on investment as half of their newer products, such as Gmail, Google News, Gtalk, and AdSense originated from these independent endeavours.
Its greatest value is that it drives innovation and creativity throughout the organization. Google nurture ideas from employees as they understand that employees can potentially provide the best ideas. Through this system, managers can find talented employees and develop them.

* TGIF meetings
Google holds weekly TGIF meetings (over email or in the cafe) whereby any employee can ask questions they have directly to anyone within the organization (including top executives, CEO and founders) about any number of company issues; no question is off‐limits. Google maintains the open culture often associated with start-ups companies, in which everyone is a hands-on contributor and feels comfortable sharing ideas and opinions. It breaks down the communication barriers put up by hierarchies of authority used in bureaucratic systems to allow for more open communication channels and a more collaborative environment.
Google places a high value on the opinions of employees, employees’ ideas are taken into consideration and approved for implementing which enhances employee creativity and boosts employee morale.

* Training and development
Google emphasized on employee development and Google’s employees are offered tremendous opportunities to learn and grow. Professional development opportunities offered to all employees via on-the-job learning, mentoring programs and lectures by famous personnel/career gurus; includes classes on individual and team presentation skills, content development, business writing, executive speaking, delivering feedback, and management/leadership. Free foreign language lessons, including French, Spanish, Japanese, and Mandarin are also sponsored by Google.

Given the prominence of engineers at Google, particular attention is paid to providing unique development opportunities for this group. An Engineering training group, engEDU, provides orientation and training classes, mentoring, career development, and tutorial services – all programs built by and for engineers. Google has also expanded its global learning and development team and is creating new leadership development programs to help develop and support Google’s future leaders.

Meanwhile, they encourage job rotation (be it permanent or temporarily) as well as project teams whereby employee can build skills/talent out of their own area of expertise. This shows the amount of effort, time and money that Google invests in its employees to keep them abreast of the professional and technological advancements.

* Environment
Offices and cafes are designed to encourage interactions between Googlers (term used for Google’s employees) within and across teams, and to spark conversation about work as well as play. The environment (as shown below) provided for employees matched their vision perfectly; there are very few cubicles and solo offices within their premises.

Events such as seminars, get‐togethers, and conferences at Google are themed with colour and creativity, allowing all the employees to attach a sense of belonging to the workplace. During first week as Google employees (Noogler), new employees are recognized at TGIF, Google’s all‐hands meeting held every Friday afternoon. The company regularly buys out movie theatres so employees can go together and watch for free.

Source: Google. 2013
Conclusion
Google’s founders started the company with a unique vision and the implementation of that vision has been very successful. Employees are attracted not to the short term monetary returns from work. Google provides a support system that no other company provides; it could help them create anything! Self development and great benefits are also given to employees, they are happy with their job.
Apart from the technological edge it had over its competitors, Google's success is clearly attributable to how it treats the people who have a stake in the company and its ability to attract the best talent and retain these employees. Every business owner can learn from this is that they should make their company a great place to work for, even if that means dipping into the profits a bit. At the end of the day, employee’s loyalty (lower turnover) and higher productivity are completely worth it.
Being one of the world’s largest companies, it seems to me that they have found a successful algorithm for keepings employees happy and productive at the same time. However, it also requires a strong “employment brand” and jobs that are designed to continually challenge and grow employees.

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(accessed 4 Jan 2013)

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