Human Resource Management – the Google Way

Executive Summary

In this project, we discuss the Human Resource practices at Google Inc. They are known as “people operations” headed by Laszlo Bock.

Googlers(Google employees) work hard, and have fun too. The workforce is diversified with international communities, Gayglers (lesbian, gay, bisexual, and transgender), and Greyglers (Googlers over 40 years). We have tried to use HRM Models such as “The Harvard Model” and “The Guest Model” which link the current HRM policies of Google with the theoretical aspect of HRM as a subject. The Harvard model throws light on aspects such as situational factors, stakeholder’s interest, HR management choices and decisions, their outcomes and consequences.

Whereas the Guest Model throws light on aspects such as HRM practices like hiring, training, appraisals, relations, etc. and also aspects such as behavioural, financial and performance outcomes. In accordance with these models we saw that the success of Google lies in its open policy to accept the employee’s ideas. Google has been able to instil creativity and innovation among its employees. The next part of the project gives a detailed idea about the standard recruitment and selection process at Google offices all over the world including India.

Google conducts the GLAT (Google Lab Aptitude test) to see if the prospective employees are compatible with the work environment. Bringing to light techniques such as the Google India Code Jam, through which they hire the best techies from all across India to work for the company. Finally we have given recommendations wherein keeping in mind the drawbacks of some of its practices, we suggest corrective measures.

Introduction

This report identifies the current HRM policies of Google Inc. The company which had less than 20 employees in 1998 now has over 20000 on its pay rolls.

We have evaluated them against the Harvard and Guest model of HRM. Also recruitment and selection procedures have been discussed. Some of them are standard while some unusual concluding with a few recommendations.

Company Overview

Google is one of the leading internet technology and advertising companies in the world. It flagship product is its internet search engine. It also provides advertising services which is its main source of revenue. Google employees named googlers, which are now almost 20,000 in numbers. (Datamonitor 2010)

People Operatons At Google

The HRM activities are classified on the basis of the parameters given by the harvard model and the guest model. Situational factors and Stakeholder interest of the Harvard model and HR practices and Outcomes of the Guest model have been identified w. r. t Google. (Bratton. J and Gold. J 2007) Refer to Appendix for diagrammatic representation.

Situational Factors:

Business strategy and conditions – The mission is to gather the entire world’s information and make it accessible to everyone. At the company data is sacred. Employees are encouraged to voice out inferences from data and not feelings.

It is believed that more data equals more knowledge and better decisions. (Hardy. Q 2005). Its informal corporate motto “Don’t be Evil”, reminds Googlers that being ethical is essential. However this can be debated in view of its acceptance of filtering search results in China.

Management philosophy – The management believes that if any employee fails, his/her managers are to blame. (Sullivan. J 2007)

Labour market – The IT industry has a labour market with engineers from Ivy League Schools (full-timers) as well as contractors.

Task technology – The IT industry is highly dynamic and competitive and to thrive one must continually innovate and delight the customers.

Laws and societal values – There have been instances where Googlers have taken the company to court for outstanding payment of salary and disabled accounts which could prove harmful to the company. (Google 2010)

Stakeholder Interest:

Management –  vice president of people operations, Google. A Chief Cultural Officer or Director of Human Resources is designated to maintain the company’s unique work culture. He is in charge of making sure that the company’s values are adhered to. (Kuntze. R & Matulich. E, 2010)

Community – It gives back to society through its philanthropic wing which undertakes in-kind product donations, volunteering and charity. (Google 2011)

Hrm Practices:

Hiring – Due to the dynamic work environment the company hires people who are quick learners and innovative. (Sullivan. J 2007). The hiring process is quite long and difficult with tests, pre-interview screening and finally at least 4 rounds of interviews.

The Google infrastructure has day care and elder care centres, spa and hair salons, car wash and oil check facilities and everything else that technology obsessed person would need in terms of a benefits package. Employees must work for 70% of their working hours and are entitled to unlimited sick leave, stock options and various other perquisites. (Logan. G 2008)

Work System

The employees have experience in three main areas – human resource, business consulting with good problem-solving skills, statistics and psychology. (Anonymous 2008) Google has an informal ‘value-added’ environment. The environment is creative, fun and relaxed.

Individuality and innovation is encouraged. There is neither dress code nor formal daily meetings. TGIFs or weekly Friday meetings are held where questions can be posed to the co-founders also. Nooglers are given special treatment and made to experience the spirit of co-operation. The downside of such an environment is that Googlers show up late, don’t pay attention, leave early and keep messaging on their mobiles. 20%

Time

Simply put, employees get 1/5th of their time to work on projects of their own choosing. This keeps employees challenged and at the same time provides good business opportunities for the company. Kuntze. R & Matulich. E, 2010). Hourly time isn’t tracked so there’s no way to know what percentage of time people are spending on side projects. The concept functions more as an attitude – that new projects should be started anyone, not necessarily those at the top. Also giving time is of no use if the culture of the company does not support it. Training and Development – Google sponsors lessons in foreign languages. Unique development opportunities are provided to engineers. EngEDU, an engineering training group provides training classes and career development services to them.

It is mandatory to undergo training and development sessions for a minimum of 120 hours/year. Google stresses development of the people through on-the-job learning. It occurs through frequent departmental “tech talks”, new mentors, etc. (Sullivan. J 2007) Appraisal – Google says it puts a “twist on 360-degree feedback by providing functionality for managers and employees to nominate `peer reviewers’ from anywhere across the organization”. Quarterly goals are set and performance evaluations are based on these; the company aims for a 70 percent success rate. Anonymous 2008) Relations – HR practices at Google are coined ‘People Operations’. Employee passion is maintained by limiting bureaucracy. Ideas which are unique are encouraged no matter where they came from. (Sullivan. J 2007) When many employees started to leave it formulated a mathematical algorithm to look for unhappy Googlers. The idea was to get inside the employees head even before they thought of leaving the company. However, it can be argued that it was a waste of money. James Smither, a professor at La Salle University, Philadelphia, says that it doesn’t make sense. “No algorithm is any better than the data you feed it.

And most data about behaviour has questionable reliability. ” If we put in garbage the algorithm will give the same back. (Watson. T 2009)

Long Term Consequences

Individual well-being – Google allows employees to work on any project of their choice which boosts creative thought and instils job satisfaction. (Kuntze. R ; Matulich. E 2010). Career development and tutorial services are provided. ( Sullivan. J 2007) One way Google speeds development is through a yearlong “base camp” training initiative that features a combination of HR specialist training and MBA-like curriculum.

Organisational effectiveness – The Company was placed fourth in Fortune’s list of America’s most Admired Companies and first in the list of Best Companies to Work For. (Hansen. F 2008)and (Logan. G 2008)

Behavioural Outcomes

Motivation – The main factors of motivation in the company is the dynamic environment, quick decision making and a culture where ambitious ideas are not only encouraged but also accepted. (Sullivan. J 2007) Co-operation – Googlers across levels and departments say that it doesn’t matter if they are designing search engines or cooking meals for their colleagues, they feel that their work can change the world. (Salter.

C et al. 2008) Commitment – The thing about Google is that even after 12 years, it continues to instil a sense of creativity and ambition within its employees and now has more than 20000. The freedom given to its workers infuses in them a sense of responsibility and obligation: “Are we taking advantage of what we’ve got here? ” they ask. “Are we doing enough? Are we doing everything we can? ” (Salter. C et al. 2008)

Performance Outcomes

Positive Productivity – Matt Glotzbach(2008) – product management director for google enterprise

Generally a new employee is required to fill out paperwork but at Google it is done electronically. I went to a staff meeting that afternoon and got assigned to figure out how Google could launch Enterprise [applications for corporations] in Europe. I was told to come back with the answer at the end of the week. It was like, ‘Hey, New Guy, you don’t know anything about our business yet, and you don’t have any international experience, but here are some people who can help you. Go figure it out. ‘ We launched in Europe a few months later. ” Innovation – 20% time. Simply put, employees get 1/5th of their time to work on projects of their own choosing.

This keeps employees challenged and at the same time provides good business opportunities for the company. Google services that were all started as individual projects are Gmail, Google News, Orkut etc. (Kuntze. R & Matulich. E, 2010).

Negative Turnover – The Company had to raise the wages by 10 % starting 2011 to reduce defection of workers who were looking for brighter pastures. With $33 billion in cash and a stock market capitalization of almost $180 billion, Google can afford to throw money and shares at its employees. Yet the significance of Google’s across-the-board pay raise extends far beyond corporate competition. Farell. C 2010) Paul Buchheit, a Googler who coined “Don’t be evil! ” is a founder, with three ex-Googlers, of a social-networking company called FriendFeed. Nathan Stoll, who managed Google News, is hard at work on his new company, Mechanical Zoo. Several top people have gone to Facebook, most notably Sheryl Sandberg, who ran Google’s automated ad sales, and Elliot Schrage, who ran PR. (Lashinsky. A et al. 2008)

Financial Outcomes

Profits – Google has matured very quickly in the last twelve years since its inception in 1998. The company’s operating profit and net profit have increased to $8312. million and $6520. 4 million in 2009 respectively which is almost 25. 3% and 54. 3% as compared to the previous years. (Datamonitor 2010)

Standard Recruitment And Selection

The HR Technology and Operations Manager, Melissa Karp says that the fast pace with which Google is growing means that the senior managers have to spend 30% of their time in interviewing prospective employees. The company says every applicant goes through at least four rounds of interviews taken by direct line managers, potential peers and subordinates. Liane Hornsey apparently had to go through fourteen interviews before getting her job.

Once selected and the contract signed, presents are given to the noogler, his/her desk is decorated with balloons and an invitation is given to dine with his/her manager. This tough entry means that only the most talented and culturally compatible people are hired and firing of employees is less. There is not much stress among people over being thrown out. (Wright. A. D 2008) and(Dempsey. K 2007) After anyone applies online in the company, it uses its applicant tracking system (ATS) to weigh in on applicants.

Background information on education and work experience is collected and stored in the ATS. Then it is compared to data about existing Google employees and if there is a match, an e-mail is sent to ask the particular employee for internal references. Employees update the ATS by replying to this e-mail. Google uses its google lab aptitude test (GLAT) which tries to measure his/her compatibility with its work environment. It is put in technology magazines and applicants hand it in accompanied by their resume. It also serves to select those applicants who have the desired skills and mindset for the interview stage. (Willock. R 2007)

Google India Code Jam

The India Code Jam is a contest where software writers are asked to write codes which can land them a job at Google’s Research and Development Centre which otherwise is a long and difficult process. The fastest writer also gets $6,900. It is a hunt to find the most brilliant code writer in South and Southeast Asia. Their problem solving, designing and code writing skills are put to test. Finalists are required to create and test software and finally programme a war-based game. However this contest is so complex to complete that only the most brilliant code writers think of applying.

Google has been unsuccessful in finding these brilliant engineers for its Indian office. According to insiders the Bangalore office wanted to hire 100 employees but their staffs has only 25 people. (Puliyenthuruthel. J 2005)

Recommendations

The work culture of Google is very motivating and challenging. The 20% time concept is a huge success. The perquisites offered are more than any employee hopes for. However, after studying the policies of Google and arguments of various third parties in favour or against them we have come up with a few suggestions for improvement. Employee turnover rate – The number of employees leaving the company has been increasing in the last few years. Some of the cited reasons were low pay, bureaucracy and poor mentoring. We suggest that superiors pay more attention to employees and guide them wherever necessary. Also an environment that is fun may backfire. A balance between work and fun must be maintained.

Mathematical Algorithm – James Smither, a professor of management at La Salle University in Philadelphia argues that the idea of the mathematical algorithm is very unrealistic as the behavioural data may or may not be accurate.

Rather it is suggested that Googlers should be approached directly so as to know why they are dissatisfied. * It has a bad reputation for underpaying the employees, even though they are trying to motivate them by providing stock options. Thus Google should see that the employees they hire are paid in accordance to the work that they do and at the same time see that they are not dissatisfied.

Recruitment – Google India Code Jam is an innovative way of recruiting people, but the only drawback is that it is a very difficult process.

Thus measures should be taken to see that the process is neither too easy nor too difficult, so that the best talent is selected and at the same time it should not deter people from applying.

References

1. Kuntze R. , and Matulich E. , (2010). Google: Searching for Value. Journal of Case Research in Business and Economics. Volume 2. Pp 2-7. [online]Available at :- http://www. aabri. com/manuscripts/09429. pdf [Accessed on 5 April 2011].
2. The Finest People, The Coolest Environment. Times Ascent: HR Forum, Empowering Potential, New Delhi. 18th January’ 07. Pp. , 22. [online]Available at :- http://www. myadrenalin. om/india/Downloads/news/CAP_2007_1_18_22. pdf [Accessed on 3 April 2011].
3. Wright A. D. , (2008). At Google, It Takes A Village To Hire An Employee. HR Magazine. SHRM’s HR Trend. Volume 53. Pp 56-57. [online]Available at :- http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=3;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=36048756 [Accessed on 2 April 2011].
4. Anonymous (2008)Google’s Lessons for Employers: Put Your Employees First. HR Focus. Volume 85(9). Pp 8-9. [online]Available at :- http://web. ebscohost. com. ezproxy. ancs. ac. uk/ehost/detail? vid=5;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=33764457 [Accessed on 2 April 2011].
5. Shipman. D (2006). Can We Learn A Few Things from Google? Nursing Management. Volume 37(8). Pp 10-12. [online]Available at :- http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=7;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=21819793 [Accessed on 2 April 2011].
6. DataMonitor, 2010. [online]Available at :- http://web. ebscohost. om. ezproxy. lancs. ac. uk/ehost/companyinfo? sid=653132a9-31a4-40e4-83bf-024bc4691e5b%40sessionmgr115;vid=5;hid=111;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;authdb=dmhco;AN=5B199F61-608D-4923-B4A3-F5EE15285ADE [Accessed on 1 April 2011].
7. Verma. M(2008), Google’s HR Dilemma, Human Asset Management, ICFAI Books Volume 1, Chennai, ICFAI University Press, Pp-140-149
8. Bratton J. and Gold. J (2007), Human Resource Management, 4th Edition, London, Macmillan, Chapter 1.
9. Work Example- Google (2010), T+D. Volume 64(5). Pp 44. [online]Available at :- http://web. ebscohost. com. ezproxy. lancs. c. uk/ehost/detail? vid=9;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=50256392 [Accessed on 2 April 2011].
10. Hansen. F (2008). TOP of the CLASS. Workforce Management. Volume 86(20). [online]Available at :- http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=11;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=33066193 [Accessed on 2 April 2011].
11. Logan, G. ,(2008). Hiring Policy makes Google best place to work in UK: Personnel Today, 3June. [Online] Available at: http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=15;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=33066355 [Accessed on 4 April 2011]
12. Watson, T. ,(2009). A Google Eye: Canadian Business, 16 June. , Volume 82 (11), [Online] Available at: http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=17;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=42208422 [Accessed on 2 April 2011]
13. Willock, R. ,(2007). Google makes the mind boggle with its recruitment challenges: Personnel Today, 6 Feb. , [Online] Available at: http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=17;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=42208422 [Accessed on 4 April 2011]
14. Dempsey, K. ,(2007). Invest more time in Hiring to spend less time firing: Personnel Management, 6 Feb. , [Online] Available at: http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? id=22;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=24663216[Accessed on 29 March 2011]
15. Farrell, C. , (2010). On pay raises, its Google or Bust: Business week, 1 Dec. , [Online] Available at: http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=33;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=55618496 [Accessed on 3 April 2011]
16. Hardy, Q. (2005). Google Thinks Small: Forbes, 14 Nov. ,Volume 176 (10), [Online]Available at: http://web. bscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=30;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=18728217 [Accessed on 1 April 2011]
17. Puliyenthuruthel, J. ,(2005). How Google Searches-For Talent: Business week, 11 April, Issue 3928. [Online] Available at:http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=28;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=16599813 [Accessed on 1 April 2011]
18. Salter, C. , et al. (2008). Google: The Faces and Voices of the world’s most Innovative company: Fast Company, March, Issue 123. [Online]Available at: http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=26;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh;AN=29959444[Accessed on 5 April 2011]
19. Lashinsky, A. , et al. (2008). Where Does Google Go Next? Fortune, 26 May,Volume 157 (11). [Online] Available at:http://web. ebscohost. com. ezproxy. lancs. ac. uk/ehost/detail? vid=24;hid=8;sid=ed72b75c-a4b7-4a49-85f0-b26e67d8e6ff%40sessionmgr4;bd