Introduction
This HR project was initiated by me and my team mate to conduct a live research with an HR professional to learn about the performance management process in his or her organization. The organization chosen for the current study is Google Inc. The interviews were conducted with HR professional at Google and online marketing manager at the organization. The interviews with the professionals were conducted in person. The paper provides details about the performance management systems at Google, their employee appraisal systems and the various parameters on the basis of which the performance of the employees are evaluated. The research includes the primary data from interview of HR employee and manager at Google, internet research and book ‘How Google Works.’
Google was founded by Larry and Sergey in the year 1998. The company is the world’s most popular search engine company. The mission of the company is to organize the world’s information and make it universally accessible and useful .
Performance Management Process at Google
Kind of performance management system does Google use
The performance management system used by Google is Objectives and Key Results, or OKRs. The elements of OKR include objectives that may be ambitious, and key results that are quantifiable. The objectives set at Google are SMART objectives that are they are simplified, measurable, attainable, realistic and time bound. Some of the sample objectives for the teams may be “How to make the BlogSpot 30% faster?” or “How to increase AdSense publishers by 30%?” The typical HR objectives are how to increase the employee engagement at Google by 20 %. Ideally the Google employees have 4-6 OKRs in each quarter of the financial year. At the end of the financial year, the employees grade their results. The scale of evaluation used by Google is between 0-1. A score of 1 is impossible. A score of 0.6-0.7 is good and a score of 0.4 and below needs attention.
An Example of OKR of Employee Mat Cuts (For Example)
Objective: To improve the relevance of search results 0.7
Key Results:
Improved image search 0.8
Improved content searchresults 0.6
Elimination of spam websites 0.8
Personalization of results 0.6
Grading of Employee
Target between 0.6 and 0.7
Scores matter but process matters more at Google.
Advantages of using OKRs: Some of the advantages of using OKRs are that they allow disciplined thinking and help in the identification of the major goals, help in transparent communications within the organization, establish performance indicators or key success factors and achievement .
Key performance indicators (KPIs) are the results or outcomes that are considered crucial for the high performance of the organization and to set objectives and measure performance . The various types of performance indicators include the score cards that concentrate on the financial measures, balanced scorecards that concentrate on the overall financial and operational measures. The concept of balanced score card was proposed by Norton and Kaplan.
Figure 1 Balanced Score Card
The OKR system implemented at Google can be considered as a hybrid of the balanced score card approach method for performance measurement.
The type of software/automated used for performance management system
Web-based social performance management platform Ryppke with social goals 2.0 module that is based on objectives and key results model by Intel is used at Google. The platform allows managers to track projects that are being worked on and modify the objectives in accordance with the business environment.
Improvements possible in their performance management system
The performance management system is working great. It can be improved further by introducing a 360 degree feedback within the scorecard. 360 degree feedback approach will encourage positive and constructional feedback. The 360 degree feedback approach to performance evaluation will take in consideration performance feedback not only from his managers, but also from his subordinates, customers, suppliers and peers (Mondy , 2008). The 360 degree feedback approach is a highly effective developmental tool that Google can use to ensure all round development of the employees. The 360 degree feedback approach would be effective for Google as the organisation culture at Google encourages open communication, eliminated bureaucracy and focuses on wholesome development of the organisation (Schmidt & Rosenberg, 2014).
The present performance management system is more effective in employee development rather than paying financial rewards. The objective of performance appraisal at Google is to ensuring that the employees perform to their full potential and contributes to the performance of the overall organisaton. The focus is on meeting the strategic goals of the organization through continuous improvement of the performance level of employees. Performance appraisal at Google helps in identifying the weaknesses of the employees and organizes training programs to help the employees improve their weaknesses. The company can further add a reward system to motivate the improving employees in addition to the high performers in the organization.
How Google thinks employees/managers perceive the performance management process
The employees perceive the performance management process as a part and parcel of the organizational culture. At Google, the management has devised a list of biases by employees that may affect their performance reviews (Schmidt & Rosenberg, 2014). Such an initiative ensures that performance management process is unbiased and fair for all employees.
The benefits of their performance management system
The benefits of the performance management system at Google are that it allows the evaluation of the employees on their own and also be peers by following a transparent system of evaluation. The performance management system is unbiased and encourages clear communication within the organization. The higher performers are well rewarded in the organization (Mondy , 2008). The organization is successful in retaining and nurturing talent in the organization and therefore the employee commitment is high towards the organization. Performance appraisal results are evaluated by the human resources department of Google to identify the training and development needs of the employees (Schmidt & Rosenberg, 2014). Based on the analysis, the HR department of the company conducts training programs through mentoring programs, skills training sessions, classroom training, etc. The performance appraisal result also provides a strong basis for promotion decisions and succession planning in the organisation.
Outcomes for employees who are not rated at an acceptable level
Such employees are given a chance to improve upon their performance in the organization or are assigned to different projects. The company tries to provide alternate project to the low performing employees and provides them with an option to improve their performance. The company also follows a rotational shift policy to rotate the employees in the different departments and job functions at the organization. The company tries its level best to initially adjust the low performing employees, but if the performance of the employees does not improve to a minimum threshold level, the employees are also fired from the organization.
Determining employee developmental needs at Google
The employee development needs at Google are determined on the basis of the feedback of the employees. The employees at Google have a voice in the organization and the company works hard to empower and inspire its employees through efficient leadership . The company has a high employee satisfaction levels.
Frequency of appraising employees’ performance
The performance reviews at Google are conducted quarterly. Though performance appraisals are conducted only at specified time of the year, performance appraisals are conducted continuously.
Performance management training for managers
Google launched Project Oxygen to assess the performance management of its mangers and mined a lot of data related to feedback and performance reviews of the organization so as to form and identify the behavior of the high performing managers at the organization and then devised a training program for the managers (Schmidt & Rosenberg, 2014).
Performance management training for employees
The performance management training for employees is conducted in the same fashion at Google for all employee as it follows a democratic culture at the organization.
How the performance appraisal relate to compensation
Performance appraisal results provide strong inputs in compensation management of a company. Also, negotiations for benefits are based on the performance management results of the employees. The performance appraisal is related to compensation to some extent as the organization follows a performance based compensation system for its employees. Google believes in attracting the best talent in the industry and has a continuous hiring process in order to attract the most suitable employees towards the company. At Google, the high performing employees are exceptionally rewarded in the organization as the company believes that managers should reward exceptional talent and high performers in the organization .
Conclusion
Performance appraisal refers to the efforts of a company to set performance standards, identify what are expected from the employees performing different jobs. The focus of performance appraisals is to ensure that the employees are performing as per the expectations and improve their performance. An effective performance appraisal system helps in increasing employee’s job satisfaction and in turn improves his performance. It reduces employee turnover and improve employee morale. Performance appraisals help in setting benchmarks based on which the employee performance is measured. The high performance employees are rewarded based on these benchmarks.
Google Inc. is considered as one of the world’s best companies to do a job in the world. The higher employee satisfaction is a positive indicator of the work environment and employee training and development initiatives at Google (Schmidt & Rosenberg, 2014). The performance management strategy presently followed by Google is effective in evaluating employee performance. To ensure the success of the performance management programs, Google ensures alignment of its performance management goals with the strategic management goals based on the vision, mission, goals and objectives of the company.
Effectiveness of the performance management processes are measured at two levels – organisational level and employee level (Mondy , 2008). At the employee level, the effectiveness of the performance management program considers the contribution of the performance management program on the employee motivation, employee’s job satisfaction, employee retention, etc. At organisational level, it considers the impact on the specific department or business function to which the employee belongs (Mondy , 2008). The perception of fair and effective performance management positively impacts the commitment, trust and loyalty of the employees and enhances performance.
References
Armstrong, M. Armstrong's Handbook of Performance Management: An Evidence-Based Guide to Delivering High Performance. London: Kogan Page Publishers, 2009. Print.
Crowley, M. C. NOT A HAPPY ACCIDENT: HOW GOOGLE DELIBERATELY DESIGNS WORKPLACE SATISFACTION. Fast Company, 2013, March 21. Web. 22 November 2014. http://www.fastcompany.com/3007268/where-are-they-now/not-happy-accident-how-google-deliberately-designs-workplace-satisfaction
Google. Google’s mission is to organize the world’s information and make it universally accessible and useful, 2014. Web. 22 November 2014. http://www.google.com/about/company/
Mondy, R. Human resource management, 10th ed. New Jersey: Pearson Prentice Hall, 2008.
Schmidt, E., & Rosenberg, J. How Google Works. London: Jogn Murray, 2014. Print.
Yarow, J. This Is The Internal Grading System Google Uses To Grade Its Employees - And You Should Use It Too. Retrieved from Business Insider, 2014, January 7, Web. 22 November 2014. http://www.businessinsider.in/This-Is-The-Internal-Grading-System-Google-Uses-To-Grade-Its-Employees-And-You-Should-Use-It-Too/articleshow/28498797.cms
