How Google became such a great workplace – it’s all in the data

We’ve all seen how Google keeps coming out on top of the lists of the best US workplaces. I went to the Googleplex in Mountainview myself in 2011 to see if they really were that happy and they most certainly were.

But why is that? This fascinating article in Slate give us part of the answer. From the article:

A few years ago, Google’s human resources department noticed a problem: A lot of women were leaving the company… Google monitors its employees’ well-being to a degree that can seem absurd to those who work outside Mountain View. The attrition rate among women suggested there might be something amiss in the company’s happiness machine. And if there’s any sign that joy among Googlers is on the wane, it’s the Google HR department’s mission to figure out why and how to fix it.

Google calls its HR department People Operations, though most people in the firm shorten it to POPS.

Every company has an HR department who would be tasked with solving problems like this. Here’s where Google is different:

…when POPS looked into Google’s woman problem, it found it was really a new mother problem: Women who had recently given birth were leaving at twice Google’s average departure rate. At the time, Google offered an industry-standard maternity leave plan. After a woman gave birth, she got 12 weeks of paid time off.

So in 2007, they changed the plan. New mothers would now get five months off at full pay and full benefits, and they were allowed to split up that time however they wished, including taking some of that time off just before their due date.

And it worked:

POPS rigorously monitors a slew of data about how employees respond to benefits, and it rarely throws money away. The five-month maternity leave plan, for instance, was a winner for the company. After it went into place, Google’s attrition rate for new mothers dropped down to the average rate for the rest of the firm. “A 50 percent reduction—it was enormous!” Bock says. What’s more, happiness—as measured by Googlegeist, a lengthy annual survey of employees—rose as well.

What’s radically different at Google is the data-driven approach they employ. Instead of making HR decisions by gut feel, they gather the data they need to find the right decision:

At the heart of POPS is a sophisticated employee-data tracking program, an effort to gain empirical certainty about every aspect of Google’s workers’ lives—not just the right level of pay and benefits but also such trivial-sounding details as the optimal size and shape of the cafeteria tables and the length of the lunch lines.

Read the whole article – there are many other great points in it.

Here’s just one more way they’ve done it:

Another major POPS finding concerned how to give an employee more money. In 2010, then-CEO Eric Schmidt decided to give all Googlers a raise. It was the job of POPS to determine the best way to offer that increase. The group ran a “conjoint survey” in which it asked employees to choose the best among many competing pay options. For instance, would you rather have $1,000 more in salary or $2,000 as a bonus?

“What we found was that they valued base pay above all. When we offered a bonus of X, they valued that at what it costs us. But if you give someone a dollar in base pay, they value it at more than a dollar because of the long-term certainty.” In the fall of 2010, Schmidt announced that all Google employees would get a 10 percent salary increase. Googlers were overjoyed—many people cite that announcement as their single happiest moment at the firm, and Googlegeist numbers that year went through the roof. Attrition to competing companies also declined.

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