Unfortunately for Google, they’ve showed their cards and it doesn’t look good. For example, a normal distribution model (in which the median is the average) predicted the number of artists with more than 10 Grammy nominations would be five. Business Insider‘s quote is worth mentioning here because it nails a major issue: The trouble with paying these kinds of retention bonuses is that once you start, it’s very hard to stop. Google’s Compensation Strategy Has the Smell of Desperation to It. Please don’t plagiarized, also please refer to the below attachments for further assistance. 1. A minimum of 3 scholarly resources from outside of class need to be used. You can reach him by, Star Wars HR: What Darth Vader Demonstrates About Employee Engagement, How to Turn Down Applicants Tactfully — and Truthfully, The Inclusion of Men in Gender Equity Efforts, It’s Raining Candidates! Google is consistently ranked as the best place to work in America. The exceptions to this observation, O'Boyle and Aguinis explain, include "industries and organizations that rely on manual labor, have limited technology, and place strict standards for both minimum and maximum production" — essentially anywhere there's little opportunity to be exceptional. Is it because its business strategy and/or product life cycle changed? In Chapter 2, we talked about how Microsoft had changed its pay strategy to rely less on stock options, more on stock grants, and then to rely less on stock grants and more on cash as its product cycle phase changed from growth to maintenance and its stock price growth slowed. In his view, it is actually more fair to pay a top performer significantly more than an employee with the same job title who produces less value. 2 YOUR TURN – GOOGLE’S EVOLVING PAY STRATEGY 1. It is also noteworthy that Google repriced 7.64 million stock options in 2009. "But it's much harder to watch your highest-potential and best people walk out the door. (Recall from Chapter 2 that they regularly top Fortune’s list of Best Companies to Work For.). They’ve got a lot of top talent that they want to retain, but they can’t promise over-the-top, seven or eight figure stock payouts anymore. In other words, will they pay for themselves (and more)? Hallelujah? Like I said earlier, I think these moves hint at the desperate position Google is in. The GGL Company is paying $20,000 to the computer science The Detroit Tigers, for instance, pay Justin Verlander $28 million because he's a Cy Young Award-winning pitcher that they don't want to see on the roster of another team. Are these increased compensation costs likely to be a good investment? What was Google’s pay level the day after it repriced employee stock options? Silicon Valley companies are notorious for fighting over top talent. For example, what was Google’s pay level the day before it repriced employee stock options? In the years following its 2004 IPO, Google needed a way to continue its impressive growth without losing its best people to hot startups like Facebook and Twitter. “Analysts say Google is facing what all Silicon Valley companies struggle with when they graduate from start-up status and into the realm of Big Tech.” With or without the 10 percent increase, one report says that Google was “paying computer science majors just out of college as much as $20,000 more than it was paying a few months ago” and that salary “is so far above the industry average that start-ups cannot match Google’s salaries.” (Actually, one might ask how many non-start-ups are likely to match such salaries.). Google Scholar provides a simple way to broadly search for scholarly literature. Why did Google reprice its stock options and also give a 10 percent salary increase (in an era when 2 to 3 percent annual salary increase budgets are the norm)? Salary The cost of the salary increase was estimated by Barclay’s to be $400 million. You’ve had candidates who have called desperate for a job, any job, to help them during a tough time. With its billions of dollars in revenues, it can afford to pay huge sums to retain those it deems most valuable. They decided on a counterintuitive strategy: to "pay unfairly.". Let’s say you’re a top performing employee at Google and you get a memo saying everyone gets an increase. Bock admits that a policy to "pay unfairly" is provocative, and that it might be better characterized as "pay unequally." For example, there have been situations where one person received a stock award of $10,000, and another working in the same area received $1,000,000. How do you define and measure its pay level? as well as other partner offers and accept our, NOW WATCH: 5 Awesome Google Features You Didn't Know About, Fee-only vs. commission financial advisor, Google, Apple, Intel, and Adobe paid $415 million, Hunter Walk told Business Insider's Nicholas Carlson, Why Google CEO Larry Page personally reviews every candidate the company hires. As a result, Google was subjected to comments such as “Google isn’t the hot place to work” and has “become the safe place to work” (per Robert Greene, who recruits engineers for start-ups such as Facebook). In Chapter 2, we talked about how Microsoft had changed its pay strategy to rely less on stock options, more on stock grants, and then to rely less on stock grants and more on cash as its product cycle phase changed from growth to maintenance and its stock price growth slowed.