Essay: Google’s employee satisfaction (slide notes)

Slide 2
Success and growth are exemplified by how well the Performance Management of an organization is executed. A major brand that is recognized for excellent PM is Google.  Google was started by PhD students Larry Page and Sergey Brin of Stanford University. What started as a research project has become a multinational company with industry leadership in internet-related products and services. Since inception in 1998 Google has undergone several transformations. Despite the changes that have taken place, Google stays committed to employee satisfaction.
AL
Slide 3
Google’s employee satisfaction is focused around a nurturing PM system. “How Google works.” is the title of a book written on the intricacies of Google by Eric Schmidt and Jonathan Rosenberg. These men have both held chief positions at Google, prior to writing the book. They discuss various instances of capitalism and address technology entering into every facet of business.

     Eric Schmidt and Jonathan Rosenberg coined a phrase “Smart Creatives” which they use to describe incumbents with the capacity to adjust successfully to the “demand” that technology has placed on business.  Candidates who add tech savvy to their array of business acumen.  People that are not motivated by traditional measures, such as, compensation or bonuses. People that care about their workplace and what they are doing.
Google’s employee satisfaction is focused around a nurturing PM system. “How Google works.” is the title of a book written on the intricacies of Google by Eric Schmidt and Jonathan Rosenberg. These men have both held chief positions at Google, prior to writing the book. They discuss various instances of capitalism and address technology entering into every facet of business.

     Eric Schmidt and Jonathan Rosenberg coined a phrase “Smart Creatives” which they use to describe incumbents with the capacity to adjust successfully to the “demand” that technology has placed on business.  Candidates who add tech savvy to their array of business acumen.  People that are not motivated by traditional measures, such as, compensation or bonuses. People that care about their workplace and what they are doing.
Slide 4
For this reason Google spends a tremendous amount of focus on PM.  Performance reviews are customized.  Initially Google identifies peer reviewers for each employee (if the employee that is being reviewed manages any incumbents, they are included in the performance review as well).

     Google stopped using numerical ratings in 2014 and the staff now uses a five-point scale starting from ‘needs improvement’ and escalating to ‘superb.’ Performance reviews are conducted bi-quarterly and peer reviewers are asked to state one thing that the “reviewee” can do more of and another that they can do in a different way.
After the feedback cycle, managers come together to look over the peer reviews.  Managers are informed of the potential mishaps that concern objective feedback.  By approaching the review in this fashion, many obstacles and pitfalls are avoided that normally arise from objective feedback.  Also, managers avoid concentrating on an employee’s most recent performance, so that it is factored in and does not become the basis of the evaluation.
Performance management is a process that has continued to form an integral part of the operation and success of many organizations. Google has been one of the companies that have used it effectively in measuring the behavior and output or results of their employees. The company uses the strategy to gauge not only performance but also to develop self-driven employees whose activities and roles are congruent with the objectives of the firm.
Google has managed to carry out performance management by having a comprehensive cycle with various activities that are based on their goals and development plans. In its performance management plan, Google carries out “need evaluation” that focuses on the organizations, work, and cost benefit analysis (Lombardo, 2017). The aim of this paper is to analyze different strategies that Google applied in the course of their almost seamless performance management.
DARIO
Slide 5
At Google, after big changes in the way they measure Employees performance, annual reviews take place each November, and the pay discussions are scheduled for December. The Company wants employees to improve and be driven by the desire of positively impacting their company. They do not want employees that are motivated by the prospect of a higher salary.
Regarding Google’s performance measuring, they changed from a 4I-point rating scale to a 5-point. The old rating scale came out from their engineering DNA. A big scale made them feel satisfied because they were able to draw distinction between a 3.3 and a 3.4 performer. In addition, they were also rating with enough precision to sort a 3.325 from a 3.350 performer. They developed very complicated formulas to make sure that if an employee rating was a hair higher than someone else’s, they would be rewarded with a slightly higher raise. This brought them to spend thousands of hours every three months giving ratings extremely precise but it never gave an accurate basis for determining pay.  They spent up to 24 weeks each year to assign ratings, calibrate and communicate them.
Before changing their rating scale, Google assembled steering committees, advisory committees and also asked some questions to a popular vote. Ultimately, a few different things emerged.  Consensus was impossible, most of them were arguing for every possible direction, as suddenly they were all “experts.”  They disliked the rating system at that time but also disliked any other option even more.  Googlers desired transparency concerning the options presented; all facets of personnel approached seemed to be frustrated with the rating system. However, the People Operations team worked to implement necessary changes. They partnered and risked fifteen years of Google tradition to try something new.
Slide 6
Based on Google’s experiments, in early 2013, the company stopped doing quarterly ratings and decided to implement them every six months. In this way, they saved 50% of their time! Therefore, in the late 2013, Google moved more than 6,200 employees (15% of their total) to a 5-point rating scale: needs improvement, consistently meets expectations, exceeds expectations, strongly exceeds expectations, and superb. These labels are similar to the ones Google had before but with fewer discrete ratings. This change suddenly cut the agonizing time wasted in making difference based on employee’s scores, so it gave managers more time in meaningful conversations with employees.
At this point, Google was relieved seeing that the loss of “precision” did not hurt them. The company asked Googlers their view about the new rating system once implemented and this time they found it as no worse than the old system. For Google, this result, even if it does not look like a victory, it was actually a huge relief. The new Googler’s surveys response revealed what they suspected: The forty-one points only created an illusion of precision.
Nataliya
Slide 7
Performance reviews at Google is a comprehensive process, which is conducted annually in two phases; the preview and the full review. The first phase of previewing is usually done at the completion of the first semester while the complete review follows in between October and November. The latter normally happens at the same time as another process known as the 360-degree collection of feedback. During performance review, managers at Google consider two major factors when rating their employees; the results or accomplishments of the employees and how the results were obtained (de Mello, 2016). The process starts with employee self-assessment and peer reviews, which are privately visible to managers to avoid accessibility by employees.
Slide 8
Performance appraisal plan
While the review of employee is done, the reports made about each other consider different criteria such as the level of adherence to the Google values. It forms the basis of the second factor of how the accomplishments are achieved. It also considers the execution factor, which relates to the ability of an employee to carry out duties with minimal guidance and without compromising the quality. Problem solving is another important factor that aims at analyzing the employees’ analytical in dynamic work circumstances.
Additionally, employees consider leadership during the review. Leadership is taken into account because it enables the company to gauge the level at, which every employee is capable of acting as a point of reference in a certain area of expertise. Google emphasizes on the aspect of leadership since it continues to grow in size thus necessitating the need for emerging leaders who are able to manage teams, be proactive, own results individually, and offer solutions.
The process of performance management at Google is crucial as it influences the remuneration and rewards system. In highly competitive businesses such as Google, where employee performance is critical and there is constant technological change, performance management has been established to have an important role to play in organizational success (Bussin & Diez, 2017). As these factors are considered in performance review, the following are the steps taken in the process
Slide 9
I.            Self-Evaluation
The process of self-evaluations is the first in the review. It involves evaluating oneself in consideration of the aforementioned criteria or considerations. Five grades are possible, “never demonstrates” and “always demonstrates” being the lowest and highest respectively. At the end of the self-evaluation, the employees are offered the opportunity to share their actions to support the grades as well as give their previous cycle achievements. The achievements are then availed in the next phase of feedback in peer review. During the process, the peers are requested to evaluate their proximity to the company’s projects and the impacts created on the results.
Slide 10
II. 360-degree Feedback
This phase is aimed at providing Google managers with a holistic and detailed picture of those who report directly to them. As such, it reveals any kind of impression that may be restricted or even biased in the reports. The process is thus significant in influencing results and behavior. It usually begins with employee-manager back-and-forth, which involves picking a representative for participation.
Employees do shortlist suggestion, which are subjected to discussion and validation by the manager; depending on the closeness to the contributions and the level which the performance has been assessed (Taylor, 2015). Here, peers are required to give assessments in three key areas; strengths, weaknesses, and contribution to certain projects. These are important in the review as they show what should continue to be done and the ones that need improvement.
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III. Calibration
At Google, in addition to the rating process, they implement calibration. Without calibration their rating process would be far less fair, effective and trusted. What it is a calibration? In their company, a manager assigns a draft rating to an employee. However, before this draft rating becomes final, groups of managers have meetings to review all the drafts. This process is called Calibration and for Google, this is a critical step to ensure fairness.
Many managers meet to compare their assessments from other similar teams. So, they make reviews of their employees collectively. They project on a wall employee’s evaluations and discuss and agree on a fair rating. This step ensures more accurate and balanced final ratings based on more than 1 single manager evaluation. In fact, this diminishes bias because managers are forced to justify their decisions to one another and it also increases perceptions of fairness among employees. In this way, they will never feel the pressure of the manager they work with.
However, even if managers meet in group, google does not believe they can never make bad decisions in final ratings. In fact, Laszlo Bock talks also about biases. For example, if a manager had a great meeting with someone the same week and he or she goes into a calibration session where the person they recently met is reviewed, they are likely to inflate their estimation of that person. This is because the managers subconsciously lean on the recent positive interaction. Google addresses this starting calibration meetings with a single handout that gives them the most common errors usually assessors make and how to avoid them.
 
     To conclude, once errors are limited as much as possible, Google’s calibration process also gives employees the opportunity to be seen by their manager if they do exceptional work. This makes it easier for managers too, when it comes to trusting employees who’ve moved across the company in their teams. On the other hand, employees can have confidence that people are being promoted based on merit, not politics.
Slide 12
Performance management schedule
EVGENIYA
Slide 13
Outputs
The output of the calibration process shows the performance of employees for a particular period. At the end of ratings, managers meet to first give feedbacks and then communicate decisions relating to promotion and compensation in the second meeting. The first meeting involving feedback is usually done while taking into account the employee impression, peer review, and self-review. In order to ensure quality and fairness, the two meetings are usually held two months apart. Google is aware of the fact that an employee who is focused on compensation will not do well with listening to feedback, regardless of the level of expectations.
 
While the process should be objective, employees tend to stop learning as they expect extrinsic rewards in the form of salary increase or ratings. Therefore, Google solves the problem by holding the feedback and compensation meetings at different times. In the traditional management of performance, the combination of the two meetings led to disastrous results that Google has since avoided. Google’s performance management is not dreaded any longer by the employees/management as it is in most companies.
Normally, PM evokes a lot of negativity instead of being seen as a method of evaluation, decision-making, and resource allocation (Chandler, 2016). The company has also managed to improve behavior using the PiLab, which is a book that is dedicated to study people in terms of their performance, contentment, and engagement while testing them. It also uses the information from data analytics in supporting the practices of the employees.
Slide 14
IV.  Objectives and Key Results (OKRs)
OKRs are as important as performance review in management of employees. Objectives are highly rated and qualitative goals while key results support the objectives.  OKRs are formulated and implemented while considering other important performance management elements or principles such as employee involvement, consistency, rating integrity, and employee ownership (Mattone, 2013). The key results offer support through incorporating metrics that actually resonate with the goals at Google. For example, the company could have the objective of increasing its profitability. In such as case, key results can include increasing revenues by around 10%, reducing its costs by 3%, and maintaining administrative expenses constant.
The objectives at Google are usually SMART (specific, measurable, achievable, realistic, and time bound). On the other hand, the key results are the targets set by the company. They are usually measured in terms of key performance indicators (KPIs), which show the extent to, which the objectives have been achieved. At Google, the performance managers have embraced and adopted the approach, which consider the objectives to be qualitative and the key results to be quantitative.
Slide 15
Conclusion
The strategies of performance management applied by Google have led to achievement of highly positive results as far as building a high performance culture is concerned. Employees at the organization have been developed into responsible and resourceful individuals who not only aim at establishing a constant improvement of the company but also enhancing their own skills.
It has enhanced leadership within the organization with most employees having the capacity to manage small teams, while encouraging personal growth through the acquisition of relevant skills, knowledge, and attitudes. Performance management at Google is one of the key drivers that have enabled the organization to develop the needed technical knowledge, which is very significant in gaining a competitive edge in the web and communication industry.