Google has changed the DNA of the HR function by not accepting that the old way is the right way. Many people are already aware of the company’s radical approach to recruiting, but other aspects of HR at Google are just as dramatic and exciting. If you expect your HR function to make a major contribution to your firm’s bottom-line results, comparing yourself to the world’s first true "talent machine" is essential.
No foray into Google HR practices would make sense without some understanding of the impressive results the company’s approach has helped produce, the most dramatic of which is employee productivity. The average Google employee generates more than $1 million in revenue each year.
This metric is a good indicator of how an organization leverages its workforce. Yahoo currently produces just $564,000 per employee, and Microsoft $647,000. This level of productivity has pushed Google stock into the stratosphere, with share prices recently topping $700—no small feat, given that Google only went public in August 2004 at a price of $85.
Google acknowledges the huge role talent management plays in its success by noting in Securities and Exchange Commission filings that the continued attraction, retention and motivation of its employees are key factors behind its success.
By focusing on developing effective management practices and letting others tell its story, Google has established an employment brand that is arguably the strongest in the world. On its first try, it was ranked No. 1 on Fortune’s "100 Best Companies to Work For" annual ranking. And Google recently was identified as the No. 1 choice of undergraduates and MBAs by BusinessWeek. These factors keep employee turnover below 5 percent, as thousands of job seekers apply daily. Google expects to receive more than 2 million résumés this year—nearly 6,000 a day!
Google is achieving these results by using innovative HR approaches. Take its approach to development, unique by any standard.
Rather than emphasizing traditional training, the development effort is decentralized. Development leaders at Google state that "training courses are a tiny piece of what we do." As an organization, Google can shift the burden of learning to employees because it focuses on hiring individuals who already demonstrate a love for self-directed learning.
It’s essential that Google hire people who learn rapidly and can innovate. The work at Google changes so quickly that few employees end up doing what they were initially hired to do. To provide time for learning, Google utilizes a 70/20/10 time allocation model that leaves as much as 30 percent of an engineer’s time to his or her own discretion. Ten percent of work time is allocated for "innovation, creativity and freedom to think," while 20 percent is for "personal development that will ultimately benefit the company."
Google also emphasizes development through on-the-job learning by coordinating continuous movement across projects. Additional employee development occurs through new-hire mentors, frequent departmental "tech talks" and an amazing on-site speaker series that has featured former news anchor Tom Brokaw and Sen. Hillary Rodham Clinton.
Google’s approach to motivation and performance management also is unique. Google’s primary motivation mechanisms are constant change, rapid decision-making and an atmosphere that not only encourages ambitious ideas but expects them.
By limiting bureaucracy and providing approvals for employee ideas in days rather than months, Google maintains employee passion and energy. The company also supports this culture with an array of what’s been called "outrageous benefits," including free gourmet meals, company movie day, purchase grants for hybrid cars and free Wi-Fi-enabled shuttles that carry employees to work.
Rounding out this unique performance environment is an unusual attitude about performance management. Because every hire has been extensively screened, Google believes that all employees have high potential. So if someone does fail, Google managers take the attitude that they’re to blame, not the employee.
What a groundbreaking concept. And how like Google.
Workforce Management, November 19, 2007, p. 23 -- Subscribe Now!