Google to give staff 10% raise

[jrockway]

Nice. Now if you want a 10% raise this year, it's easy to say, "everyone at Google got one..."

[pama]

"The company also began testing a mathematical formula to try to predict which employees are most likely to leave, based on factors like employee reviews."

Does anyone have more information on this?

[clemesha]

I don't have more info on that statement, but it reminds me of this:

    When a company is filled with engineers, it turns to    
    engineering to solve problems. Reduce each decision
    to a simple logic problem.

From here: http://stopdesign.com/archive/2009/03/20/goodbye-google.html

[bigbang]

"Mr. Schmidt wrote that company surveys indicate salary is more important to Google employees than any other component of pay, such as bonuses or equity. He added the company was moving a portion of employees' bonuses into their base salaries, so they would receive some of it in every paycheck."

Not sure, if this a 10% raise really.

[stevenbedrick]

The wording was a little bit unclear to me, but I interpreted it to mean that, in addition to the raise, they're changing how their bonuses are delivered- rather than as one lump sum, they're being spread out over each paycheck. I could be mis-reading, though.

[jrockway]

I don't really like bonuses. I am going to work hard even if there is not a carrot on a stick, so just give me my money now.

[gry]

Bonuses are a one time commitment, while raises compound. This is a big deal.

You're right. The distribution isn't clear. It doesn't sound like a flat 10% raise. Yet, it is a 10% raise, no?

[shin_lao]

There's also the thing that bonuses don't work as a motivation tool for the kind of work we do.

http://www.alfiekohn.org/managing/fbrftb.htm

[tcskeptic]

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?

[cma]

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.

[dotBen]

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.

[ghshephard]

They could take the Netflix approach to low performers - "Satisfactory performance will be rewarded with a very generous severance."

[ojbyrne]

There's no reason they can't give larger raises to the higher performers. Just that the base would be 10%.

[Jtsummers]

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.

[daniel-cussen]

You can do that on top of this.

[a-googler]

Some asshat leaked the "CONFIDENTIAL: INTERNAL ONLY" memo. Good work, (presumably) newly unemployed person. You won't even get the goods.

[Timothee]

With presumably 23,000 people getting that email, unless the person (if only one did) was not careful at all, I don't think they could be discovered. (I'm not sure that anyone would really care either)

[veemjeem]

Supposedly the deal applies to previous employees as well. An ex-googler friend of mine was notified presumably so that he might actually come back.

[jrockway]

Don't people typically ask for 30% when they change jobs?

[eyeareque]

Google's base salary is so low compared to other companies... they had to do this eventually.

[supersillyus]

Citation?

[timcederman]

Your information is quite out of date.

[tlack]

Seems like a desperation move. Can you imagine the exciting, dynamic Google of 5 years ago thinking ""Uh.. give them slightly more money?" was a great solution to this problem?

[kkowalczyk]

Every extraordinary perk can be interpreted as desperation.

They give out free food? They must be desperate.

They drive employees to work for free? They must be desperate.

They give free massages at work? They must be desperate. Etc.

The truth is, all else being equal, salary is an important factor when deciding between offers and the only one that is easily comparable (i.e. if you have an offer from few good companies, like Amazon or Google or Apple, you will only know if you're compatible with the company/team/particular job you landed after you have worked there for a while but salary is a known quantity upfront hence it might tip the scale in favor of the company offering the highest salary).

Which is why offering above average salary is a good hiring strategy for any company, including Google.

I can't think of a reason why a single current Google employee should be displeased with such a raise.

[Locke1689]

Almost every perk at Google I had at Microsoft. One of the biggest things keeping me from being fully invested in securing a position at Google is knowing that the salary is approximately the same at Google while the cost of living in Silicon Valley is much higher. You may not think about salary (beyond having enough to do what you like) but it is a very real maker/breaker for me.

[olalonde]

Why so cynic?

Personally, I think it's great to see a major company recognize that salaries do matter.

I dislike this common attitude in IT to think that money doesn't matter since we're working on cool stuff and can play the Wii on lunch breaks.

[xentronium]

I'd bet my money on that substantial portion of googlers isn't excited about fun that much, as they are about their salaries.

[nl]

http://www.businessinsider.com/google-bonus-and-raise-2010-1... claims that In addition, Google will also give each employee an additional raise equivalent to 1X the employee's target bonus for the year.

My understanding is that Google "target bonuses" are much, much more than 10% of salary. I've heard 30%-40% as not uncommon. So does that mean that people are actually getting a much bigger raise than the headline indicates? (Or is the "target bonus" something else again?)

[bwillard]

My understanding is that the target bonus is more in the 15% range but that there are multipliers (company and personal) that most of the time turn that ~15% into the 30-40%.

[dstein]

10% doesn't make up for the fact that GOOG stock already peaked way back in 2007, which means any Google stock options granted at today's prices are worthless to new employees.

Google is essentially powerless to compete with Facebook's stock option potential value.

[GavinB]

A couple of issues with this:

1) Past peaks aren't relevant to the value of options granted at today's prices. The question is whether GOOG will be higher or lower next year.

2) Options and equity that Facebook gives its employees aren't free. They have a market value, which Facebook is giving in return for an employee's efforts.

The real issue is that Google has more than 10x as many employees as Facebook, and its value is likely to be more volatile, which is good for risk-seeking employees.

Edit: Both Google has about 10x the Market Cap and 10x the employees, so they're at least in the same order of magnitude in terms of how much equity can be given away in each.

[guelo]

This logic seems dumb, Facebook is a big company, if you're joining Facebook now, even as a star hire, are they really going to throw enough equity at you to make you a millionaire in some unknown future IPO? And you have no idea when the IPO will happen, it could be 10 years before you can liquidate. And you might get screwed over on some dilution or the strike price or something currently undisclosed, private companies are notoriously secretive about their financials.

It's just too many unknowns. I don't think it makes sense to plan your life around hitting this options jackpot.

[ajays]

I've heard that Google gives RSUs (Restricted Stock Units) and not many options. RSUs basically are stock grants which vest over time. Of course, you don't get as many RSUs as options. But there's no question of RSUs going underwater (unless the company folds).

[othermaciej]

I would bet Google gives mostly restricted stock, not options. So not worthless, but not as much potential upside.

[nathanlrivera]

I heard the top performers are getting the 10% raise and a bonus equal to 40% of base pay.

[dlevine]

I'm not sure if bonuses have gone down recently, but a few years back (when I was there), bonuses of 40% were pretty common.

Even though some people said that Google paid "below market," when you take into account that kind of bonus (and some stock options), I think I did better than I would have pretty much anywhere else.

[mkramlich]

Google felt peer pressure from the Federal Reserve and decided to do it's own QE

[tocomment]

Indication of inflation on its way?

[jessor]

This does make the battle for talent look pretty dramatic, doesn't it?

[mitrick2]

If "battle for talent" is focused on a battlefield being fought by large, enterprise companies vs. startups and more risk-adverse organizations, sure. I'm not convinced that people who opt for Google/Facebook are the right people for young companies look to take big risks with potential (vs. guaranteed) rewards.

[bretthellman]

For real entrepreneurs, the type of people Google needs to retain, a 10% raise is meaningless. I will say it's a nice PR stunt.

[mwerty]

What about really real entrepreneurs?

[acgourley]

I wouldn't want a company full of entrepreneurs unless N < 10

[adambyrtek]

Your logic escapes me. Are you trying to say that "real entrepreneurs" would prefer not to get any raise instead of getting 10%? Moreover, assuming your hypothesis for a while, this would be an incredibly expensive PR stunt.

[random42]

Non-US person here. Is 10% raise supposed to be big? We get 10% raise minimum at my country (inflation is around 12.5% here)

[aswanson]

A