7 ms·

There's an interesting fiscal corollary of having unbridled ambition matched by enormous firepower which brings the world's smartest engineers and hackers toget

There's an interesting fiscal corollary of having unbridled ambition matched by enormous firepower which brings the world's smartest engineers and hackers together: a Xoogler who was early in the business once told me about how engineers would hack/exploit the travel allowance policy. Google allowed folks to book their own flight and accommodation, and had an algorithm which determined rewards for folks travelling with financial efficiency. The measure of 'financial efficiency' was an invisible coefficient tied to average hotel and flight prices in an area. So if the average cost of a trip from Mountain View to Boston for three days was $1,500, and you managed to do it for less, then you got back a cut of the difference either as a cash bonus or in points to spend on upgrades for hotels and flights. After a while someone realised that a group of engineers were consistently booking shitty travel around the same time, and then travelling first class the rest of the year. They had worked out what the algorithm was doing, and started scraping hotel prices themselves. They booked (spurious) cheap earlybird flights and hotels during conference season in various cities, sometimes years in advance, and took huge numbers of internal points from doing so. The person describing the situation to me said there was a lot of discussion as to whether they should be fired or rewarded.

caminante 10y ago
> After a while someone realised that a group of engineers were consistently booking shitty travel around the same time, and then travelling first class the rest of the year. How's that different than having an annual travel budget? Sounds like they sacrificed to feast later instead of holding accommodations constant at "above average." I think you did a good job telling the story, but maybe I'm missing how gaming travel expenses is unique to Google.
- georgespencer 10y ago
  Crucial point which I didn't communicate properly: they were block booking spurious/unnecessary travel well in advance (by years).
  - euyyn 10y ago
    They still had to justify that travel expense in the corporate card, which is charged when the booking is made. So their managers must not have though of those trips as unnecessary.
  - caminante 10y ago
    Oh! Yeah, that (embezzlement/fraud) is why they got in trouble.
  - saryant 10y ago
    How can you even book flights years in advance when airlines only publish schedules 330 days in advance?
    - georgespencer 10y ago
      You can book hotels years in advance and flights ~1 year in advance.
- sowbug 10y ago
  The difference is that if you know your budget is X, you'll probably try to spend X - epsilon, because that maximizes your personal outcome within the rules. But if you get a credit based on the difference, then you'll have a shared incentive with the budget-maker to spend much less than X. However, then you have the problem that if X is per trip, then there's a perverse incentive to maximize the number of trips (even if they're each well under budget) because you pocket the cumulative credit. Then you can go way over X on the trips you actually care about.
  - caminante 10y ago
    Giving credits for cost-saving isn't the problem. Companies do that with travel expenses. What you're describing is really the same as giving employees an annual discretionary travel budget. Here's the problem: It sounds like Google didn't implement financial controls. The employees committed fraudulent transactions by booking travel from outlying years and get credits for use in the current year. That shouldn't have been allowed. This was unclear in the original post and the commenter graciously clarified.
ryandrake 10y ago
It reminds me of some place I heard about that had very generous patent bonuses, to the point where people would make more money filing for patents all day than their salary--so they would do the bare minimum to get their "official" job done and not get fired, and spend the rest of their time writing patents all day. Not sure if it was Google, but it's another example of incentive systems being gamed.
- fred256 10y ago
  https://en.wikipedia.org/wiki/Cobra_effect https://en.wikipedia.org/wiki/Cobra_effect
htrp 10y ago
Any incentive system you develop will be gamed.
Fiahil 10y ago
Fired? Why is that always the go-to solution? Firing someone cost money, affect teammates' motivation, and make people unhappy. "Hi Mr X, I saw you managed to extract a significant benefit from the travel allowance policy. Congratulations! Please don't do that again, or you'll have to go through Mr Y for validation next time. Have a good day!". Here you go.
- deleted 10y ago
  [deleted]
- pc86 10y ago
  I don't think this is a fireable offence but it's not hard to see the logic that leads one to believe that: - Company sets up a rewards program to incentive financial discipline. - Employee notices something that could allow them to, as you put it, "extract a significant benefit" - Employee chooses not to bring this to someone's attention - Employee proceeds to willfully navigate the benefit system in an unintended manner which causes the company to expend quite a bit more X than expected (where X can be money, or processing time, or paperwork, or benefit credits, or whatever). Spurious is the key word here in the original post. Reservations they wouldn't have otherwise booked in order to maximize there own personal financial gain. If 0 is intended activity and 10 is outright fraud, that isn't a 10 but it's a hell of lot bigger than 0.
sib 10y ago
"You get what you measure"

caminante 10y ago

> After a while someone realised that a group of engineers were consistently booking shitty travel around the same time, and then travelling first class the rest of the year. How's that different than having an annual travel budget? Sounds like they sacrificed to feast later instead of holding accommodations constant at "above average." I think you did a good job telling the story, but maybe I'm missing how gaming travel expenses is unique to Google.

georgespencer 10y ago
Crucial point which I didn't communicate properly: they were block booking spurious/unnecessary travel well in advance (by years).
- euyyn 10y ago
  They still had to justify that travel expense in the corporate card, which is charged when the booking is made. So their managers must not have though of those trips as unnecessary.
- caminante 10y ago
  Oh! Yeah, that (embezzlement/fraud) is why they got in trouble.
- saryant 10y ago
  How can you even book flights years in advance when airlines only publish schedules 330 days in advance?
  - georgespencer 10y ago
    You can book hotels years in advance and flights ~1 year in advance.
sowbug 10y ago
The difference is that if you know your budget is X, you'll probably try to spend X - epsilon, because that maximizes your personal outcome within the rules. But if you get a credit based on the difference, then you'll have a shared incentive with the budget-maker to spend much less than X. However, then you have the problem that if X is per trip, then there's a perverse incentive to maximize the number of trips (even if they're each well under budget) because you pocket the cumulative credit. Then you can go way over X on the trips you actually care about.
- caminante 10y ago
  Giving credits for cost-saving isn't the problem. Companies do that with travel expenses. What you're describing is really the same as giving employees an annual discretionary travel budget. Here's the problem: It sounds like Google didn't implement financial controls. The employees committed fraudulent transactions by booking travel from outlying years and get credits for use in the current year. That shouldn't have been allowed. This was unclear in the original post and the commenter graciously clarified.

ryandrake 10y ago

It reminds me of some place I heard about that had very generous patent bonuses, to the point where people would make more money filing for patents all day than their salary--so they would do the bare minimum to get their "official" job done and not get fired, and spend the rest of their time writing patents all day. Not sure if it was Google, but it's another example of incentive systems being gamed.

fred256 10y ago
https://en.wikipedia.org/wiki/Cobra_effect https://en.wikipedia.org/wiki/Cobra_effect

htrp 10y ago

Any incentive system you develop will be gamed.

Fiahil 10y ago

Fired? Why is that always the go-to solution? Firing someone cost money, affect teammates' motivation, and make people unhappy. "Hi Mr X, I saw you managed to extract a significant benefit from the travel allowance policy. Congratulations! Please don't do that again, or you'll have to go through Mr Y for validation next time. Have a good day!". Here you go.

deleted 10y ago
[deleted]
pc86 10y ago
I don't think this is a fireable offence but it's not hard to see the logic that leads one to believe that: - Company sets up a rewards program to incentive financial discipline. - Employee notices something that could allow them to, as you put it, "extract a significant benefit" - Employee chooses not to bring this to someone's attention - Employee proceeds to willfully navigate the benefit system in an unintended manner which causes the company to expend quite a bit more X than expected (where X can be money, or processing time, or paperwork, or benefit credits, or whatever). Spurious is the key word here in the original post. Reservations they wouldn't have otherwise booked in order to maximize there own personal financial gain. If 0 is intended activity and 10 is outright fraud, that isn't a 10 but it's a hell of lot bigger than 0.

sib 10y ago

"You get what you measure"