4 ms·

The big issue that Google has (incidentally the same issue that MS went through) is the two classes of employees that they now have and the resentment and disco

by nickb 18y ago

The big issue that Google has (incidentally the same issue that MS went through) is the two classes of employees that they now have and the resentment and disconnect between the two groups. The two groups, of course, are those who are millionaires and are 'fully vested' and those new googlers who are not millionaires (and probably never will become millionaires). The latter group relies on a salary to live in a very expensive area and they count on every perk as a way to reduce their bills so they can make the ends meet each month. One site recently showed that average salary at Google is around $110K. In the valley, that's not a lot when you factor in the cost of living. So this increase in daycare is not a big deal to all those millionaires and yet it is a huge increase to those that can't afford it. As Google matures and they start cutting even more of these perks, the two groups will start growing even further apart. It's a serious organizational issue and Google will need to tackle it quickly.

zach 18y ago
I agree. And really, this is supposed to be how Google tackles that issue: to maintain a high-perk atmosphere. Google's atmosphere is similar to America's regulated airline era, where fares were set by a government body. Being unable to compete on price, they competed in other dimensions -- who had the newest planes, the best food, the friendliest flying atmosphere, the most trusted brand and the best service to their customers. The best engineers are not more motivated by a somewhat higher salary, since they are passionate about their work, right? Indeed, all the perks in the world can't keep some of their employees from heading for the exits in the, er, face of more exciting opportunities. So why offer lavish perks at all? The always-implied reasons are for its signaling effect and ability to increase the all-important worker productivity. But I would contend that the best reason for them to do so at this point is to reduce effects of the company's relative wealth disparity, which, should they rear their heads, clearly have the potential to be very corrosive. Highly democratic perks are a tonic for a de-facto aristocracy. But the two risks of establishing a millionaire atmosphere are clear from this example. Firstly, of course, they're way expensive to the company, and that's hard to sustain. Secondly, workers, who may not have even cared about these things before arriving, have been conditioned to expect them. So that sets up a bind, since the company needs to maintain the illusion that these benefits create. If you try to shunt some of the expense onto your workers, say to the 20% of employees that use 80% of some benefit, you run the risk of breaking the spell. Because the antediluvian class will take it in stride while the post-IPO gleaners will scream. So, Google: buck up and pay up.
esja 18y ago
Absolutely. If they are not very careful with precisely this type of issue, it will become "the nomenklatura vs. the proles", and result in the leadership being insulated from what happens at the edges of the organisation - which would ensure the end of profitable innovation at Google. This is an issue faced by all "unequal" social structures, including countries, tribes, corporations, governments, and others, and every human structure throughout history has required mechanisms for managing it. Google is not exempt.
menloparkbum 18y ago
Mountain View is indeed expensive but $110K is $50K more than the average household income in the Bay Area. Aside from packing 3 people to a cube, Google pampers its employees above and beyond almost any other company in the area. There is free food, health insurance, free gym, free laundry, free haircuts and so forth. Taking this into account, a Google employee doesn't have to spend much money on anything other than rent, transportation and food for the kid. Even if renting a $3000/m apartment and leasing a Lexus a Google employee making $110K a year would still have $50K a year left over. "Making ends meet" perhaps isn't the most accurate way to describe the situation these people face.
- arn 18y ago
  But Google day care is said to now cost $57,000 for two kids in post-tax money (which means closer to $80,000 of pre-tax money). right?
  - menloparkbum 18y ago
    Yes. It does seem absurd that Google day care costs more per year than attending Harvard. A full time nanny can be hired for half that. Someone with a $110K salary and a working significant other has plenty of options for child care. If they are truly struggling to make ends meet, they are simply mismanaging their finances. I'm assuming the other person works too, which is why they need child care. Thus, their actual combined income is over $110K, which is an enviable position for any household, even in the Bay Area.
    - dmix 18y ago
      Then hire a nanny? People get too used to what they have. Try leaving and seeing how much better plan B is.
- snprbob86 18y ago
  I'm almost positive I paid for my haircut while there... The haircut, dentist, car-wash, etc perks aren't so much about being free as they are about being convenient due to being located on-site.

by nickb 18y ago

zach 18y ago

I agree. And really, this is supposed to be how Google tackles that issue: to maintain a high-perk atmosphere. Google's atmosphere is similar to America's regulated airline era, where fares were set by a government body. Being unable to compete on price, they competed in other dimensions -- who had the newest planes, the best food, the friendliest flying atmosphere, the most trusted brand and the best service to their customers. The best engineers are not more motivated by a somewhat higher salary, since they are passionate about their work, right? Indeed, all the perks in the world can't keep some of their employees from heading for the exits in the, er, face of more exciting opportunities. So why offer lavish perks at all? The always-implied reasons are for its signaling effect and ability to increase the all-important worker productivity. But I would contend that the best reason for them to do so at this point is to reduce effects of the company's relative wealth disparity, which, should they rear their heads, clearly have the potential to be very corrosive. Highly democratic perks are a tonic for a de-facto aristocracy. But the two risks of establishing a millionaire atmosphere are clear from this example. Firstly, of course, they're way expensive to the company, and that's hard to sustain. Secondly, workers, who may not have even cared about these things before arriving, have been conditioned to expect them. So that sets up a bind, since the company needs to maintain the illusion that these benefits create. If you try to shunt some of the expense onto your workers, say to the 20% of employees that use 80% of some benefit, you run the risk of breaking the spell. Because the antediluvian class will take it in stride while the post-IPO gleaners will scream. So, Google: buck up and pay up.

esja 18y ago

Absolutely. If they are not very careful with precisely this type of issue, it will become "the nomenklatura vs. the proles", and result in the leadership being insulated from what happens at the edges of the organisation - which would ensure the end of profitable innovation at Google. This is an issue faced by all "unequal" social structures, including countries, tribes, corporations, governments, and others, and every human structure throughout history has required mechanisms for managing it. Google is not exempt.

menloparkbum 18y ago

Mountain View is indeed expensive but $110K is $50K more than the average household income in the Bay Area. Aside from packing 3 people to a cube, Google pampers its employees above and beyond almost any other company in the area. There is free food, health insurance, free gym, free laundry, free haircuts and so forth. Taking this into account, a Google employee doesn't have to spend much money on anything other than rent, transportation and food for the kid. Even if renting a $3000/m apartment and leasing a Lexus a Google employee making $110K a year would still have $50K a year left over. "Making ends meet" perhaps isn't the most accurate way to describe the situation these people face.

arn 18y ago
But Google day care is said to now cost $57,000 for two kids in post-tax money (which means closer to $80,000 of pre-tax money). right?
- menloparkbum 18y ago
  Yes. It does seem absurd that Google day care costs more per year than attending Harvard. A full time nanny can be hired for half that. Someone with a $110K salary and a working significant other has plenty of options for child care. If they are truly struggling to make ends meet, they are simply mismanaging their finances. I'm assuming the other person works too, which is why they need child care. Thus, their actual combined income is over $110K, which is an enviable position for any household, even in the Bay Area.
  - dmix 18y ago
    Then hire a nanny? People get too used to what they have. Try leaving and seeing how much better plan B is.
snprbob86 18y ago
I'm almost positive I paid for my haircut while there... The haircut, dentist, car-wash, etc perks aren't so much about being free as they are about being convenient due to being located on-site.