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Google and Pay Raises: Turns Out, She's a Lot Like You....

I got a new girl now
And she's a lot like you...

--Honeymoon Suite

You know and love Google.. You use their products every day.  You've read about their culture and longed for the day that your company could be like them.

Turns out, you're more like them than you know.  They're a lot like you, and that doesn't make them less special.  It just means that even at the pinnacle, the issues you have to deal with as an HR leader are the same. Facebook_vs_google

Don't believe me?  Check the news - Google is giving all employees across the board a 10% pay raise to try to solidify the base against turnover and retention issues.  It seems that a rising company in their space (this little thing called Facebook, you'll hear about them in the next year or two) is picking off their employees like a hawk picking up field mice.  

The Google culture is deemed as special.  No doubt you've written and suggested your culture is special.  Still, people left you, just like they're now leaving Google.

Google tried to do other things to stop the turnover.   They didn't stop the bleeding.  So they did what more pedestrian companies do.  

When push came to shove, Google attempted to do what your company either 1) has done, or 2) would do if you had the means:

1. You would try and buy your way out of a retention problem by giving everyone an across the board raise.  Turnover is hard to figure out and stop.   Sometimes you just have to throw money at everyone and hope that the turnover stops.  It rarely does.

2. You've fired people for breeches of confidentiality. So has Google.

Here's the text of the memo from Google CEO Eric Schmidt courtesy of Business Insider:



I'm pleased to share some very, very good news with Googlers worldwide. But first let me say, on behalf of everyone on the management team, that we believe we have the best employees in the world. Period. The brightest, most capable group of this size ever assembled. It's why I'm excited to come to work every day--and I'm sure you feel the same way. We want to make sure that you feel rewarded for your hard work, and we want to continue to attract the best people to Google.

So that is why we've give all of you a 10% raise, effective January 1st. This salary increase is global and across the board--everyone gets a raise, no matter their level, to recognize the contribution that each and every one of you makes to Google.

There's more. We've heard from your feedback on Googlegeist and other surveys that salary is more important to you than any other component of pay (i.e., bonus and equity). To address that, we're moving a portion of your bonus into your base salary, so now it's income you can count on, every time you get your paycheck. That's also effective January 1st. You'll be receiving an email shortly with further details about these changes to your compensation. And one last we're announcing that everyone will get a holiday cash bonus, too.

Googlers, you are what makes this company great, and our goal here is to recognize you for your contribution, in a way that's meaningful to you. Thank you for all that you do, and for making Google a place where magic happens.


Translation:  It's a hard knock life, y'all.  We've got the best culture and workplace in America in terms of trinkets, and we still have a turnover issue.  We can't figure out who's going to leave, so we're going with straight cash to everyone. This proves that motivation and satisfaction are tricky things.

I love Google.  But she's a lot like you.


Paul Hebert

I love it when a company says "we listened you wanted more pay." I'm sure it was a huge shock that came out on top (sarcasm intended)

Yeah - until they don't - oh yeah - that won't happen.

People pleez... pay is a hygiene factor. It keeps me "normal" - not engaged. And I income adjust meaning that higher money just establishes a new "minimum."

This simply sets the stage for me moving on to greener pastures when the offer comes in because google just established that fact that the only reason people work there is for the money. They proved with their actions.

They might have been better off moving that same investment into charities the rank and file believed in.

Dwane Lay

Ah, HR Capitalism at it's best, right? Nice to know The Google doesn't have all the answers, either. I'll be interested to see what happens to their retention numbers after this.

Dan Johnson

That memo sounds like an Oprah favorite things episode.

"You get a car...and you get a car....and you get a car!"

Faizan Javed

Hi KD,

The "problem" here so to speak is that Google is brimming with brilliant world class talent which would like to go beyond the rigid contours of the corporate confinements to explore their brilliance. These are not just some of the best minds in California, or the US, or North America...they have assembled some of the best minds on the planet.

Google has to fight the retention war despite the fact that it has tried its best to counter its growing size by keeping a very fast paced, somewhat chaotic entrepreneurial culture which facilitates rapid development of ideas and the best perks around.

This is a nice problem to have but a problem nonetheless. The last resort was money. Google has invested resources in creating the best environment possible, and now they are investing raw money across the board in their most valuable resource. What other company would do this (or can afford to) ?

Seth McColley

Was anyone else somewhat surprised by how simple and somewhat unpolished (for lack of a better term) that communication was? I was expecting to read something that would move me and leave me feeling energized (this is Google, afterall!), but I finished feeling ambivalent. It almost seemed disingenuous or whimsical - "And one last we're announcing that everyone will get a holiday cash bonus, too." Sort of like, "let throw this at the wall and see if THIS sticks!"

Good to know that we've all got the same problems to solve.

Chris Ferdinandi - Renegade HR

I think Paul's right - all this does is establish a new normal.

"We found out you like salary more than bonuses and blah blah blah." Really? That's news? You'd rather have guaranteed cash than at-risk money?

Seth - I found it refreshing in its rawness. I'm sick of reading overly polished corporate communications.

golf trolley

well, I think that this is practical. As to me, salary is really counts. And I was wondering why facebook could keep "stealing" Google's talents.


As a huge Google fan, I am so very disappointed in this attempt to address employee engagement. Really, 10% across the board increases? That is the best the great Google could come up with? Granted, most companies can not afford this type of action in the current economic environment but it is a very lazy, simple attempt to fix a very complex issue. If the only reason people are willing to work at Google is the money, they will continue to have high turnover because someone will always be willing to pay more.

Kevin Lane

How about this?!? Do a 10% pool of money to be used for raises...I'm sure they value everyone at Google, but there have to be some folks that REALLY stand out. For them, hey! here's your 20% raise. For the not-so-spectacular, you get 0. Okay, maybe that's mean, so 19% for the great (worthy of retention) employee and 1% for the other employee. I'm sorry you only got 1%, but you earned it. And, if you're not happy about it, there is an opening over at Facebook. You STAR will feel much better (both for the money and that the person they've been picking up the slack for is gone).


Here's some different view on this:

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