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Google to give staff 10% raise
- mkramlich 16y agoGoogle felt peer pressure from the Federal Reserve and decided to do it's own QE
- tcskeptic 16y agoThis strikes me as misguided. Surely they cannot be equally concerned about the loss of any of their 23,000 employees. Wouldn't you be better off giving substantially larger raises to your higher performers? This way your high performers are pissed off and your low performers are happy, is that the outcome you want?
- daniel-cussen 16y agoYou can do that on top of this.
- ojbyrne 16y agoThere's no reason they can't give larger raises to the higher performers. Just that the base would be 10%.
- cma 16y agoImplement a ranking system and standardized tests. Count lines of code and apply it as a bonus multiplier. Make sure to only measure things directly assigned to a person, while ignoring 'off-the-book' things like bringing new hires up to speed, code review, etc. Devote a large portion of the bonus to a 'face-time in meetings' metric. Put everyone on an artificial bell-curve measuring whim in exquisite detail. 20% of staff-time should be taken off anti-pagerank gaming efforts and redirected at anti-bonus-metric gaming.
- jonursenbach 16y agoCounting the lines of code an engineer has written is a terrible road to go down. I can write 500 lines of good code, or I can abstract it into a 5,000 line heap of unmaintainable garbage.
- tcskeptic 16y agoBecause clearly the idea that you have high and low performers is brain dead, and therefore the only way to measure that stuff is stupidly, duh. Come on. In any organization of that size there are people you really want to hang on to. People about whom the question "How would I replace that person?" is harder to answer than for others. My only point is if the stated goal is to retain people, put the resources toward those you actually want to retain. If Google is so exceptional that they really don't have that issue, then I am totally impressed. Of course the other possibility is that Google is without constraint when it comes to compensation resources, which would also be completely foreign to my experience and invalidate my point.
- stoney 16y agoI think the problem is simply their size makes it very difficult to identify their top performers. There is no objective measure that can be applied across the entire organisation, so they have to rely on humans to identify the top performers. Their top 10% of staff would come to 2,300 people (assuming the 23,000 mentioned elsewhere is correct), which means no single person in the organisation can identify the top people (and probably no single person knows all of the top people). So you need to rely on mid-level managers to identify the top performers, but each mid-level manager is likely to be biased towards their own staff and their area of responsibility. And of course the mid-level managers may not be in the top 10% and so may be unable to identify who the star performers are anyway. So then you try to add some kind of normalisation scheme, maybe you take the top 10% from each department. Except that doesn't account for one department being better/more important than another. So you have to add that weighting in,... and you end up with some complex system that no-one really understands or agrees with. Add to that the evidence that performance related pay isn't always beneficial and this becomes a very difficult problem.
- DougWebb 16y agoAnd all of that extra work to try and identify the top 10% of staff would probably wind up costing the company more than a simple across-the-board raise does.
- seldo 16y agoFunnily, apart from the LoC as a bonus multiplier, my friends at Google complain about exactly those things -- especially code reviews and new hires.
- scorpion032 16y agoI guess the OP is also a googler so knows the pain point exactly!
- Jtsummers 16y agoNothing in that article says high performers won't be able to receive additional compensation. So this way low performers are happy, and if high performers receive a normal year end bonus or pay raise then they'll be doubly happy. Of course, if they don't, then you're absolutely right.
- ghshephard 16y agoThey could take the Netflix approach to low performers - "Satisfactory performance will be rewarded with a very generous severance."
- dotBen 16y agoWouldn't you be better off giving substantially larger raises to your higher performers? The best way I've seen this done is carrot and stick combined. When I worked with MySpace/NewsCorp (for all my sins) one of the things I was most encouraged by was their anual review... EVERYONE in the company was given an anual performance review by their manager with a final mark out of 5. Then out of no where it was simply announced that EVERYONE who got 1 or 2 out of 5 was fired. No one knew that was going to happen but it was simple + effective. Low performers, slackers, idiots and the like were immediately expelled from the company. Everyone who was pushing like crazy was inspired to go on and do more with a revitalized team. Anyone who was thinking about slacking was thus incentivized not to going forward. People who knew they were out of their depth and might get a 1 or 2 next time started looking for a different job. It was a harsh yet thoroughly effective move. That, combined with salary raises makes for effective, rewarded teams IMHO.
- stoney 16y agoWhat happened when the next annual review came around? Didn't everyone try to game it to maximise their scores? Did managers feel bad giving low marks knowing that it would mean people getting fired and potentially claims of discrimination?
- niekmaas 16y agoDoesn't this contribute to an atmosphere of fear? I believe that numerous research teams have shown that creating an open atmosphere where everyone feels part of the same team leads to the most innovation. I'm sure Google goes for this approach.
- dotBen 16y agoan open atmosphere where everyone feels part of the same team leads to the most innovation Well I agree, but there is a flip side to that which is where you have a number of people on your team who are not carrying their weight and are causing the high fliers to be held back, perhaps even feel complacent as though their contribution isn't worth pushing for if others can slack off. Clearly, hiring the right people to begin with is crucial but standards drop as companies get bigger. If done right, the myspace approach can be executed correctly with little-to-no culture of fear.. everyone who scored high has nothing to fear (and even rewarded with pay rise) and anyone who has something to fear is (hopefully) kicked out.
- Devilboy 16y agoSheesh can't a profitable company just give everyone a modest raise without getting criticized?
- wlievens 16y agoI find it hardly a modest raise, but I do agree with your point.
- a-googler 16y agoSome asshat leaked the "CONFIDENTIAL: INTERNAL ONLY" memo. Good work, (presumably) newly unemployed person. You won't even get the goods.
- jrockway 16y agoDon't people typically ask for 30% when they change jobs?
- Timothee 16y agoWith presumably 23,000 people getting that email, unless the person (if only one did) was not careful at all, I don't think they could be discovered. (I'm not sure that anyone would really care either)
- stanleydrew 16y agoGoogle found and terminated the employee responsible.
- adamsmith 16y agoWow, I wonder how. Presumably they could have encoded a watermark into the text by changing out synonyms. All you'd need is 15 words with two possible synonyms. ...Or, more simply, they probably used packet sniffing/similar?
- varjag 16y ago..or they are just great at search.
- gaius 16y agoGot a link for that?
- stanleydrew 16y agoNo, but Google notified employees internally that the person responsible was terminated. If you have a friend at Google just ask.
- jessor 16y agoThis does make the battle for talent look pretty dramatic, doesn't it?
- mitrick2 16y agoIf "battle for talent" is focused on a battlefield being fought by large, enterprise companies vs. startups and more risk-adverse organizations, sure. I'm not convinced that people who opt for Google/Facebook are the right people for young companies look to take big risks with potential (vs. guaranteed) rewards.
- eyeareque 16y agoGoogle's base salary is so low compared to other companies... they had to do this eventually.
- supersillyus 16y agoCitation?
- cloudkj 16y agoGlassdoor.com seems to provide supporting evidence of this.
- timcederman 16y agoYour information is quite out of date.
- tocomment 16y agoIndication of inflation on its way?
- jrockway 16y agoNice. Now if you want a 10% raise this year, it's easy to say, "everyone at Google got one..."
- bkhl 16y agoIf you are performing well at a company as big as Google, you get 10% raise easily every fiscal year. "easily" as in the company is doing well. (It's a common sense that companies are less likely to give raises if the company is not making much money) If you happen to be asking for a raise, you are either working for a wrong company or not performing well compared to your peers.
- ghshephard 16y agoSo not true. I managed to hire some absolute _star_ performers from HP last year - right after they received a 10% pay cut (along with many of their likewise high performing colleagues). I don't know what was going through HPs minds, and I'd love to know if they lost a number of their great performers. Low - average end performers will have to stay, particularly in a down job market - but the great ones can always get jobs anywhere. I assure you that pay increases in large companies in the valley are not a slam dunk 10% a year, particularly if you aren't getting a promotion to a new position.
- jkent 16y agoIt amazes me that companies feel that pay cuts can solve their business issues. I got wind of one of these at a previous (40 employees) company. The company folded within three months. I'd already quit by that point...
- jrockway 16y agoMy experience is that programmers are treated as a cost rather than an asset, and the squeaky wheel gets the grease. What Google's public announcement means in that context is that no programmer should accept anything less than a 10% raise. "Why should Google employees get that and not us?"
- tlack 16y agoSeems like a desperation move. Can you imagine the exciting, dynamic Google of 5 years ago thinking ""Uh.. give them slightly more money?" was a great solution to this problem?
- olalonde 16y agoWhy so cynic? Personally, I think it's great to see a major company recognize that salaries do matter. I dislike this common attitude in IT to think that money doesn't matter since we're working on cool stuff and can play the Wii on lunch breaks.
- mkramlich 16y agoGeneralization of my experience: 20's: money? whatever. I want to work on cool stuff! 30's+: cool stuff? I can do that on my own, whenever I have free time. (And btw, I don't want to work 60+ hour weeks in order that I can maximize that free time.) Give me money! [This is compounded if you know have a spouse and children to take care of financially]
- nostrademons 16y agoYour ability to have free time and maximize your money probably happened because you worked on cool stuff in your 20s. I know a bunch of people a few years older than myself who would like to settle down and start a family now, but can't because they spent their 20s either unemployed, in a variety of clerical jobs, or in organizations (eg. school systems) that are chronically underfunded and overworked. They don't have either the money or time to start a family without falling a rung down the socioeconomic ladder - let along work on cool stuff. A lot of popular blogs (eg. Marc Andreesen's) divide up your career into phases, where you optimize for different things in each phase. Your 20s is usually the "development" phase, where people hire you for what you can do in the future. Your 30s is the "harvest" phase, where people hire or acquire you (at substantially increased rates) for what you've done in the past. You want to optimize for skills & experience during the development phase, because otherwise, there's no reason for anyone to hire you during the harvest phase.
- bretthellman 16y agoFor real entrepreneurs, the type of people Google needs to retain, a 10% raise is meaningless. I will say it's a nice PR stunt.
- acgourley 16y agoI wouldn't want a company full of entrepreneurs unless N < 10
- mwerty 16y agoWhat about really real entrepreneurs?
- mkramlich 16y agothe really real ones are imaginary
- adambyrtek 16y agoYour logic escapes me. Are you trying to say that "real entrepreneurs" would prefer not to get any raise instead of getting 10%? Moreover, assuming your hypothesis for a while, this would be an incredibly expensive PR stunt.
- pama 16y ago"The company also began testing a mathematical formula to try to predict which employees are most likely to leave, based on factors like employee reviews." Does anyone have more information on this?
- deleted 16y ago[deleted]
- clemesha 16y agoI don't have more info on that statement, but it reminds me of this: When a company is filled with engineers, it turns to engineering to solve problems. Reduce each decision to a simple logic problem. From here: http://stopdesign.com/archive/2009/03/20/goodbye-google.html http://stopdesign.com/archive/2009/03/20/goodbye-google.html
- mfukar 16y agoIt'll be interesting to follow this up to see how engineers solve (or not) HR problems.
- nathanlrivera 16y agoI heard the top performers are getting the 10% raise and a bonus equal to 40% of base pay.
- dlevine 16y agoI'm not sure if bonuses have gone down recently, but a few years back (when I was there), bonuses of 40% were pretty common. Even though some people said that Google paid "below market," when you take into account that kind of bonus (and some stock options), I think I did better than I would have pretty much anywhere else.
- bigbang 16y ago"Mr. Schmidt wrote that company surveys indicate salary is more important to Google employees than any other component of pay, such as bonuses or equity. He added the company was moving a portion of employees' bonuses into their base salaries, so they would receive some of it in every paycheck." Not sure, if this a 10% raise really.
- gry 16y agoBonuses are a one time commitment, while raises compound. This is a big deal. You're right. The distribution isn't clear. It doesn't sound like a flat 10% raise. Yet, it is a 10% raise, no?
- jrockway 16y agoI don't really like bonuses. I am going to work hard even if there is not a carrot on a stick, so just give me my money now.
- stevenbedrick 16y agoThe wording was a little bit unclear to me, but I interpreted it to mean that, in addition to the raise, they're changing how their bonuses are delivered- rather than as one lump sum, they're being spread out over each paycheck. I could be mis-reading, though.
- dspeyer 16y agoThis is correct. The two changes are independent, and stack.
- dstein 16y ago10% doesn't make up for the fact that GOOG stock already peaked way back in 2007, which means any Google stock options granted at today's prices are worthless to new employees. Google is essentially powerless to compete with Facebook's stock option potential value.
- ajays 16y agoI've heard that Google gives RSUs (Restricted Stock Units) and not many options. RSUs basically are stock grants which vest over time. Of course, you don't get as many RSUs as options. But there's no question of RSUs going underwater (unless the company folds).
- GavinB 16y agoA couple of issues with this: 1) Past peaks aren't relevant to the value of options granted at today's prices. The question is whether GOOG will be higher or lower next year. 2) Options and equity that Facebook gives its employees aren't free. They have a market value, which Facebook is giving in return for an employee's efforts. The real issue is that Google has more than 10x as many employees as Facebook, and its value is likely to be more volatile, which is good for risk-seeking employees. Edit: Both Google has about 10x the Market Cap and 10x the employees, so they're at least in the same order of magnitude in terms of how much equity can be given away in each.
- dstein 16y ago* The question is whether GOOG will be higher or lower next year. GOOG stock right now is making a triple top under the 2007 peak. It's done for. I dare you to go long. I double dare you to buy a call. The bottom line is I would take any Facebook option at today's prices, over any Google option, period.
- neworbit 16y agolulz at people who buy technical indicators over stock fundamentals
- deleted 16y ago[deleted]
- random42 16y agoNon-US person here. Is 10% raise supposed to be big? We get 10% raise minimum at my country (inflation is around 12.5% here)
- jamesaguilar 16y agoYou probably know the target inflation rate in the U.S. is slightly less than two percent, so a ten percent raise in a year is an 8% real raise. In your country it is a -2.5% real change in salary. So yes, of course a 10% raise is a bigger deal here than it is where you live. Now, is it life changing? Not for me. Maybe if you were only making $20,000 a year, or if you were spending right up to the edge of what you make, an extra 10% of breathing room would make a huge difference in your life. And sure, some people if they change job function or get promoted in a U.S. company can get anywhere from 20-40%, all the way up to multiples of 100% raises. But even though it is not out of this world, a raise like this is nice. It's also nice to get something for "nothing" above and beyond what you're already doing, which is the effect a blanket raise must necessarily have.
- nl 16y agohttp://www.businessinsider.com/google-bonus-and-raise-2010-11 http://www.businessinsider.com/google-bonus-and-raise-2010-1... claims that In addition, Google will also give each employee an additional raise equivalent to 1X the employee's target bonus for the year. My understanding is that Google "target bonuses" are much, much more than 10% of salary. I've heard 30%-40% as not uncommon. So does that mean that people are actually getting a much bigger raise than the headline indicates? (Or is the "target bonus" something else again?)
- bwillard 16y agoMy understanding is that the target bonus is more in the 15% range but that there are multipliers (company and personal) that most of the time turn that ~15% into the 30-40%.
- aswanson 16y agoA