Introduction
A company that revolutionise the internet, a business image that defines internet and the world second most valued brand name. Yes, it’s Google. When initial idea of Google Search came up Founder Larry Page and Co-founder and Sergey Brin were Ph.D. students that is – in the year 1996. When the company restructured in 2015 Google Inc. became a subsidiary of the Alphabet Inc. – which is among one of the well paid company in the entire United States, by employing approximately 60, 000, employees across the globe in more than 40 countries while operating more than 70 office buildings. The company is well known for its Search engine in which they have embedded online advertising and made that into their main source of income. Apart from Search, internet based-service giant own from famous video streaming website YouTube to Gmail, Android and have even entered into smartphone marked by launching a phone name Google Pixel. While managing their enormous workforce and wide range of products their mission is to “organize the world's information and make it universally accessible and useful” (Google, 2015).
Moreover many of us know the Google Company by their slogan “Don't be evil.” According to Google it’s just more than how they serve their users or customers – it’s also about “following the law, acting honourably and treating each other with respect” (Google, 2015).
Issues
“Even when you are working at a company that offers exceptional service and unbelievable benefits like Google, things can get a bit stressful on the job” (Online MBA, 2012). When it comes to compensation structure every single employee take it seriously. At several times Google has been rated by Fortune Magazine as one of best company on the industry when it comes to compensation management – though they also have their downside and issues as well. Nevertheless there has been many issues reported on media on how Google manages their compensation and parks and how they try to retain industries best employees by offering exceptional compensation packages.
Equal pay
The world of information and Technology is a very dynamic, rapidly changing and innovative industry, which requires leader who are open to change, creative and innovative. As we all know the world of information technology is a rapidly changing market, very dynamic and requires constant diligence, meaning Google needs to provide competitive and better compensations than the rivals, such as Facebook, Twitter and Microsoft. Henceforth they decided on a counterintuitive strategy: to "pay unfairly." As reported by Feloni (2015), SVP Laszlo Bock, who became the of Google's People Operations in 2006, in order to retain best employees who’s productivity is high, they must compensate employees unequally. Furthermore he explains that there have been incidences where, “where one person received a stock award of $10,000, and another working in the same area received $1,000,000.”
Promotion
Workload raises just as pace of the information technology, and so does expectations of employees from the company. Most of the employees at Google tend to have a mindset that if they are not willing to stay at work for longer hours, then chances of getting promoted are less likely or is out of their career path, means no career development or growth. In addition to that the issue of promotion raise as workforce increases, as Shontell (2013), outlines that Google Inc. among the companies whose workforce grows exponentially. Dubois (2013) Emphasized on this by stating that “Working with too many talented and creative people can result in clashing of the minds”. Hence, one of the biggest issue in the structure of compensation is because of a competitive environment that hinders career development and potential career paths, which ultimately weaken company’s compensation management structure and becomes an obstacle in the long run. As stated by one of the low level employees “Lots of competition and hard to move up”.
Benefits
In an article written by Arrington, (2009) on TechCrunch, on the topic “Why Google Employees Quit”, he writes, employees tend to complain about the compensation package because other competitiors such as Microsoft have better and richer packages. However, Eric
Schmidt who served Google as a CEO from 2001 to 2011 tried to make the packages more competitive, but after consulting Human Resource it was revealed that any increment to employees’ benefits could cost company around $22 million a year. So he told the employees “People don’t work at Google for the money. They work at Google because they want to change the world!” Thus there were no further discussion about the issue which was raised in a TGIF meeting in Kirkland. The effect on the company is clear, and as mention before that the new start-ups always tries to lure the talented, hence, Google may lose their most talented employees and they may be ended working for higher paying new venture such as Stripes, Facebook or companies alike.
Empowerment & Recognition
At times Google engineer’s also experiences over managed and lack of autonomy and decision making power. Empowering and recognising can be defined as one of the most common ways of non-monitory compensations strategies followed by big companies to motivate and increase the productivity of the workforce. Agreeing to Dubois (2013), at Googleplex mangers are employed to approach and get advice on resource allocation, to related to work issues and not to tell people want to do and what not to do, but they help in coming to a collective census of the engineers. According to (Arrington, 2009), many employees at least some point at work feels overmanaged or not been appreciated enough of the great work they offer, hence Google has lost out one of the best engineers working in the industry. Consequently resulting to lack of innovation for a company where their sole purpose and strategy for growth is innovation.
Related legislations
The Search giants’ headquater is, located in Mountain View ,Sillicon Valley, United states of America, hence all federal laws, policies and regulations would be applied, just like any other tech company operating in US soil – such as to pay men and women the same for “substantially similar work,”. Usually Google offers more than necessary by the law in order to retain the best performing employees at Google and to increase their competitive edge of best people in the market.
Anticompetitive Practices
The Federal Trade Commission largely pursues anticompetitive conduct as violations of Section 5 of the Federal Trade Commission Act, which bans “unfair methods of competition” and “unfair or deceptive acts or practices.” Google, Apple, Intel and Adobe made it to front-pages back in first quarter of 2015, when they all agreed and combined at least $415 million to settle a dispute between Silicon Valley workers, the lawsuit was claiming that “wages were not as high as they should have been because of illegal non-compete agreements between the tech giants” (Kravets, 2015). Their employees, believes that top tech firms such as Apple and Google agreed to not approach each other employees or engineers with better job offers and because of that they lost potential compensation of $3 million as wages. These types of anticompetitive illegal hiring agreements are totally unlawful and unhealthy as company move forward to the future.
Minimum wage
Currently at Silicon Valley where the headquarter of Google, the minimum wage is around $10 according to the legislation, and recently there have been many changes and events occurred that would shape the future of minimum wage for the companies operating at Silicon Valley. As a result of a Vote conducted by cities Association, it is expected to rise the minimum wage to be around $15 by 2019. Around Ten cities of USA formerly use the state's $10 minimum wage. “At Mountain View, Palo Alto and Santa Clara is $11, and in San Jose and Sunnyvale its $10.30 (though Sunnyvale will increase to $11 as of July 1). Furthermore, Mountain View and Sunnyvale wages will rise to $15 by 2018” (Druzin, 2016). Therefore Google employees have a brighter future, if given that all other economic conditions remains constant. More importantly economist are optimistic about the effects and researches shows that the negative effect would not be exponential but manageable.
Rule 701
According to U.S. Security and Exchange Commission (SEC), Rule 701, a company, in our case Google, can give compensatory equity awards to employees without any financial
disclosure as long as they do not exceeds $1,000,000 during any consecutive 12 months period. Nevertheless, back in the days in 2002-2004 “Google violated the securities registration provisions of Section 5 of the Securities Act” by “issued over $80 million worth of stock options to the company’s employees” (Druzin, 2016). So any company it is crucial to determine how much they spent on compensation through equity rewards and always review the laws limitations to abide by to stop violating laws unintentionally.
Other benefits: retirement – insurance
Generally other benefits such as vacation time, insurance, sick leaves, retirement plans are up to employer – some start-up take advantage of these laws, nevertheless Google offers, vacation leaves, unlimited sick leaves, free food, coffee corners. It is required by the law to allow leaves or time off for occasions such as medical reasons, pregnancy, and disability and for voting (Google, 2015). In California compensation benefits are a must, including health care, public benefits and so on – interestingly Google offers more than necessary, such as their own buses, educational classes, free hair dressing and other enjoyable perks (DiDomenico, 2015).
Recommendations
Like the norm of tech industry there is always and update or a new design or feature to your product – so does the mangement styles, policies and procedures – there is always room for improvement.
Pay and Finances
Every year google spend millions of dollers on so called moonshots, namly Google Fiber, smarthome company Nest, and bound to fail company Boston Dynamics. As Finley, (2016) states, Googles’ parent company Alphabet loses more money on those moonshots than they gain, reportedly last year losses incured was $633 million and it worsen this year. As analytics aregue they could better spend some of those money to pay equality to compensate for what they pay for higher professinal softwares engeeniers compare to normal programmers. This could help them to pay more fairly and based their pay on performance and still treat fairly among the employees.
Recongnition & empowerment
Employing over 60, 000 employees have it downside and silver linings as well. The truth is when companies grow exponentially large just like Google, it is not always possible to empower every single one of us, thus more people-centric mangers could be hired (Entis, 2015). A flat structure could be maintain to encourage more interactions and more synergy between managers and programmers. It is sometimes not enough to believe that employees can be “serious without a shirt”, with a more decentralized decision making and more involvement there should also be a grate inclusive diverse culture where mangers recognize and appreciate the employees more – or chances to work with he she is comfortable with. The flexibility of staff with the mangers and upper management could further contribute to feeling of empowerment and recognition.
Abiding by the laws
As we discussed before Google fails to recognize and abide by the SEC Rule 701 – in which companies are allowed to compensate their employees by the stock option without disclosing and financial deal until a certain threshold (Zimmerman, 2016). Google crossed the threshold without realizing that they did. Basically they issued about $80 million of stock option without disclosing financial information as required by federal services law Section 5 of the Securities Act – hence violated the law. Therefore it is recommended to be well informed about laws and regulations of the industry.
Other recommendation is to be competitive when it comes to hiring and giving compensation. As we highlighted Google and many other tech giants was accused of coming to an anti-competitive agreement to stop offering better employment offers to high-end softwares engineers among the big companies (Kravets, 2015). Hence this news did actually striked google shares and effected their earnings – hence the right way could have been better for both the company and the employees as well. Therefore practising the ethics and abiding the laws as required.
Overall Google is a great company to work for and provides outstanding perks for their employees and at many times they have been awarded and made headlines as the best company to work for.
References
Arrington, M. (2009). Why Google Employees Quit. Retrieved from Tech Chruch: http://techcrunch.com/2009/01/18/why-google-employees-quit/ Carlson, N. (2014, April 24). The Untold Story Of Larry Page's Incredible Comeback. Retrieved from BusinessInsider: http://www.businessinsider.com/larry-page-the-untold-story-2014-4 DiDomenico, P. (2015, October 10). Innovation at Google – a day in the life | Knowledge Management. Retrieved from LawyerKM: http://lawyerkm.com/2008/03/11/innovation-at-google-a-day-in-the-life-knowledge-management/ Druzin, B. (2016). Silicon Valley $15 by 2019 regional minimum wage gets big boost from Cities Association vote. American City Business Journals. Retrieved from http://www.bizjournals.com/sanjose/news/2016/06/10/silicon-valley-15-by-2019-regional-minimum-wage.html Dubois, D. (2013, September 11). Google, the Network Company. Retrieved from Knowledge.Insead.edu: http://knowledge.insead.edu/leadership-organisations/google-the-network-company-from-theory-to-practice-2602 Entis, L. (2015, October 21). Google Is Actually More Diverse Than You Think. Retrieved from entrepreneur: http://www.entrepreneur.com/article/234395 Feloni, R. (2015). Inside Google's policy to 'pay unfairly' — why 2 people in the same role can earn dramatically different amounts. Retrieved from Business Insider: http://www.businessinsider.com/google-policy-to-pay-unfairly-2015-4 Finley, K. (2016). Google’s Parent Company Is Losing Even More Money On Moonshots. Retrieved from WIRED: https://www.wired.com/2016/04/googles-parent-company-losing-even-money-moonshots/ Google. (2015, October 10). About. Retrieved from Goole: https://www.google.com/about/company/ Google. (2015, October 21). Doing more on diversity. Retrieved from GoogleBlog: https://googleblog.blogspot.com/2015/05/doing-more-on-diversity.html Google. (2015, October 24). Google Code of Conduct. Retrieved from investor.google: http://investor.google.com/corporate/google-code-of-conduct.html Google. (2015, October 21). Google Locations. Retrieved from Google: https://www.google.com/about/company/facts/locations/ Google. (2015, october 24). Ten things we know to be true. Retrieved from Google: http://www.google.com/about/company/philosophy/ Greenberg, J. (2015, October 25). Diversity in the Workplace: Benefits, Challenges and Solutions. Retrieved from MulticulturalAdvantag: http://www.multiculturaladvantage.com/recruit/diversity/diversity-in-the-workplace-benefits-challenges-solutions.asp Kelly, H. (2015, October 25). Google commits $150 million to diversity. Retrieved from CNN: http://money.cnn.com/2015/05/06/technology/google-diversity-plan/ Kravets, D. (2015). Silicon Valley no-poaching deals burned Google shareholders. Retrieved from Ars Technica: http://arstechnica.com/tech-policy/2015/03/silicon-valley-no-poaching-deals-burned-google-shareholders-suit-says/ Llopis, G. (2015, October 25). Diversity Management Is the Key to Growth: Make It Authentic. Retrieved from Forbes: http://www.forbes.com/sites/glennllopis/2011/06/13/diversity-management-is-the-key-to-growth-make-it-authentic/ MEDIRATTA, B. (2007, October 21). The Google Way: Give Engineers Room. Retrieved from NY Times: http://www.nytimes.com/2007/10/21/jobs/21pre.html?_r=0 Noviantoro, T. (2015, October 21). ORGANIZATIONAL CULTURE IN GOOGLE INC. Retrieved from LinkedIn: https://www.linkedin.com/pulse/20140904061228-154884582-organizational-culture-in-google-inc RecruiterBox. (2015, October 10). 20%: Google’s Innovative Approach to Staff Productivity. Retrieved from RecruiterBox: http://recruiterbox.com/blog/20-googles-innovative-approach-to-staff-productivity