This 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?
Implement 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.
Because 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.
I 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.
And 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.
Counting 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.
Wouldn'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.
What 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?
Doesn'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.
an 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.
Nothing 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.
Comments
This 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?
Implement 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.
Because 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.
I 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.
And 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.
Funnily, apart from the LoC as a bonus multiplier, my friends at Google complain about exactly those things -- especially code reviews and new hires.
I guess the OP is also a googler so knows the pain point exactly!
Counting 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.
That was the point ;)
He was being ironic. Are you being doubly ironic? Am I not seeing the iirony?
Wouldn'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.
What 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?
Doesn'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.
an 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.
Is MySpace actually doing any better as a result though? Seems like they are still losing.
(this was many years ago)
They could take the Netflix approach to low performers - "Satisfactory performance will be rewarded with a very generous severance."
There's no reason they can't give larger raises to the higher performers. Just that the base would be 10%.
Nothing 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.
You can do that on top of this.
Sheesh can't a profitable company just give everyone a modest raise without getting criticized?
I find it hardly a modest raise, but I do agree with your point.