Reference no: EM132175775

Management in Action

Google’s Success Builds from Its Progressive Approach toward Human Resource Management

Google, which is owned by Alphabet Inc., was rated as the number one place to work by Fortune seven times between 2006 and 2016. The company employs over 61,000 people in over 70 offices in more than 40 countries, and it generated $75 billion in revenue in 2015, with $23 billion in operating profit.250

Google’s success is partly a function of its progressive approach to human resource management. People Operations, or POPS, is the name of Google’s HR department. The department is headed by Laszlo Bock, and it relies on people analytics to determine many of its HR programs, policies, and procedures. Prasad Setty, the leader of the POPS “people analytics group” said that “what we try to do is bring the same level of rigor to people decisions that we do to engineering decisions. Our mission is to have all people decisions be informed by data.”251 Consider how POPS responded to a high turnover rate among women.

Bock sent his team to study the causes of female turnover. The research revealed that the problem pertained to new mothers, not women in general. Women having babies were quitting at twice Google’s average rate of turnover. One potential reason for this was the company’s maternity leave policy, which allowed 12 weeks of paid time off. Google decided to see what would happen if it changed this policy. New mothers were given five months off at full pay, and they can use it in any way they wish. The change was a success. The quit rate for new mothers dropped 50% and equaled the average for the remainder of the company. Results from Googlegeist—the company’s annual employee survey—further showed that employees’ happiness had increased as well.252

Let’s consider some of the other human resources practices used by Google.

Hiring

Historically, Google’s interview process was known for being one of the most difficult in the high-technology industry. Candidates frequently were asked “notoriously impossible brainteaser interview questions.” Examples are “Model raindrops falling on a sidewalk (sidewalk is 1 meter and raindrops are 1 cm). How could we know when the sidewalk is completely wet?” and “If ads were removed from YouTube, how would you monetize it?”253

POPS did research on the hiring process partly because it was taking too long to hire people. The average time to hire was three or more months in 2005, with some people waiting six months to receive an offer. The average is now down to about five to six weeks, and clear hires are selected within three weeks.254

Two of the big changes in the hiring process pertained to the number of interviews applicants went through and the structure of interviews. In the past, recruits met with 12 or more people. Research by POPS demonstrated that there were diminishing returns after four interviews, which is the current standard.

The structure of the selection process also was revised to match what is known from HR research. Laszlo Bock described the selection process as “combining behavioral and situational structured interviews with assessments of cognitive ability, conscientiousness, and leadership. To help interviewers, we’ve developed an internal tool called qDroid, where an interviewer picks the job they are screening for, checks the attributes they want to test, and is emailed an interview guide with questions designed to predict performance for that job. This makes it easy for interviewers to find and ask great interview questions.”255

Training

Google does not follow tradition when it comes to training. For one, about 55% of the company’s official training classes are taught by Googlers. These classes are called “Googler to Googler.” The company believes that employees learn more when they are taught by fellow employees. One manager noted that “telling your employees that you want them to learn is different than asking them to promote that culture themselves. Giving employees teaching roles … makes learning part of the way employees work together rather than something HR is making them do.”256

The company does not rely on traditional classroom-style teaching. It replaces this with approaches that are suited for the needs of Google employees. One example is the weekly program called “ProductPage 322 Spotlight.” It is a dial-in conference call that is run like a talk show. “A moderator interviews a product manager about a particular new feature, as sales agents across the country, and around the world, listen in. Sometimes there are also slides or video to follow along with online, and the agents get to ask questions via chat.”257

Google also offers quarterly classes that dig deeper into various topics. One example is Sales Pro, “which takes a deep dive into one particular strategic issue, like display advertising or the mobile business. The soup-to-nuts program takes about six hours, but rather than delivering it all in one fell swoop, or even through a series of hour-long, do-it-yourself modules, Google breaks the information into bite-sized chunks lasting no more than seven minutes each.”258 This enables employees to download the modules when and where they want.

To make training stick, the company follows classes with online games to help employees master this knowledge. “Leaderboards foster friendly competition. And quizzes following each training make sure the agents are absorbing the new information.”259

Performance Management

The performance management process begins with setting objectives and key results, known as OKRs. OKRs consist of a goal, which is established by the employee, and an associated set of key results that guide the employee in achieving the goal. Managers rate an employee’s performance on a five-point scale anchored from “needs improvement” to “superb.”

Employees and their managers also select a group of peers to conduct semi-annual evaluations. Peers are asked to “list one thing the person they’re reviewing should do more of and one thing the employee could do differently to have a greater impact on the company.” Once this feedback is received, groups of managers come together to review the peer ratings. The goal of these meetings is to reduce rater bias and provide more accurate evaluations.

The final stage of the cycle entails making pay decisions. These decisions are made about a month after the annual performance reviews are conducted. Employees, of course, receive feedback at every stage of the process.260

FOR DISCUSSION

1. What is it about Google’s human resource practices and procedures that make it an attractive company to work for? Explain.

2. To what extent are Google’s hiring procedures consistent with recommendations proposed in this chapter? Discuss your logic.

3. How would you describe Google’s approach toward training its employees?

4. To what extent does Google follow the performance management process depicted in Figure 9.3?

5. Do you see any downside to the performance management approach used at Google? Explain your rationale.

6. What is your key takeaway from this case?