Incentives play a key role in the development of an organization. This knowledge is a fairly straightforward fact and has been recognized and realized by managers all over the world. In fact, not only does incentives affect the actual and real life operations of a company, but academic theory in labor economics has also pointed out the importance of the interactions of incentives, the operations of a firm, and even the final product of output – or services – that the company is able to produce (Schuler & Jackson, 2006).
Although there are indeed many examples of the use of incentives of a firm in order to meet the objectives that the company has laid out in both its short and long term planning projections, making a case study of all companies – or truly even only a handful of them – would take pages and pages of text, work, and analysis. Therefore, for this purpose, the paper constrains the analysis of incentives and the other effects it is eventually able to create from the point of view of the largest Information Technology Company in the World today – Google.
An internet and reference search on the Company that is Google would bring about a rich result list of references because of the success story of the company with respect to management. In fact, it has not only become successful because of the various technologies that they have implemented in the world today, but also because of the management strategies that the company makes use of. Human resources, according to previous research on the success of Google, has been pointed out by researches to be the most valuable aspect of the company’s operation.
Although the company has many non-human assets – including land, infrastructure, technology, intellectual property rights, and so forth – the main contributor to the success of the company has been still associated to its human resources. It is well pointed out that in today’s information technology industry; companies that are directly in competition with Google have a much higher pay rate than those of the firm (Lim, 2008). Examples of such companies are Apple, Microsoft, and Yahoo.
However, it also seems to go against that founding theories of labor economics that there are more employees that wish to work in Google than in the other companies that we have mentioned. Relevant research on the subject has pointed out that such options and results are the result of the incentives that the company provides for its employees. Relevant research on the subject would be the non-wage benefits and factors that determine the choice of employment both from the point of view of the labor markets and the firms.
However, this paper recognizes the fact that such factors and variables fall under the general category of employee incentives. In the case of Google, the incentive planning process of the company includes benefits that are adapted to the kind of employees they employ, both from the perspective of salary as well as culture. One incentive scheme that the company provides to its employees are the incentives to have their total working time allocated not only in the specific projects that they are undergoing, but give twenty percent of their time to whatever project these employees wish to explore and focus on.
It must be recognized that one of the objectives of the company is to be able to create new and innovative products that are able to compete in the fast paced information technology market. Such an objective is clearly aligned in the planning of the employee incentives of the company that it allowed a framework for internal and external development of the product mix of the company while giving incentives to their employees to be interested and heightened by the work process because such working schemes are not anymore strictly confined to projects that these employees may not be so interested in.
In fact, this incentive scheme for employees has been planned by the founders of the employers ever since the beginning of the company itself. The most popular products of the company, including Gmail, Okrut, and Google news were the results of such employee time allocation with projects that the company has wished to pursue (Robison, 2008). And since the development and deployment of new technology was essential to the market of Google, and so was it reflected in its objectives, such an employee incentive scheme turned out not only to be beneficial to the company, but revolutionary for the firm as well.
Today, other startup companies are using the same principle in order to deliver the same kinds of services with marginally positive success. Another incentive planning scheme that Google has implemented for its operations are the employee incentives for play and enjoyment within its headquarter facility: The Googleplex. Here, entertainment facilities abound the Googleplex. Such incentive for employment, like the productivity rule that has been mentioned above, has been an intended plan from the very beginning by the founders.
They recognize that by organizing a healthy working environment in which employees are not forced to work but rather have a policy of working when one feels like doing so – of course being expected to achieve a certain goal that has been indicated by managers and project leaders – employees have incentives to better produce output as compared to an unhealthy working environment: a product which also fits the original objective that the paper has highlighted. However, such a planned incentive scheme also has a positive effect and aligns with the objective of the company.
One of the objectives of the company is to foster a healthy working environment of growth and creativity for its employees. Although such an objective is often found and indicated by other firms, there are seldom the proper incentives and management directives that help reach this goal and objective. Google, on the other hand, has a perfectly aligned planned incentive scheme in order to meet the objectives of the company. By allowing for such policies, the objective that has been indicates has been met.
Recently, another internal objective that the country has publicized is that it must be able to go on with its production with the environment — meaning the implementation of green technology — in the process. Ever since the recognition of global warming and its significant contribution to the future — and even the current status — of mankind, Google has laid out both an internal plan and indeed companies outwork objectives that the environment must be given consideration in the process.
In this respect, the company has now implemented a point system for its employees and other human resources that contribute to the implementation of such agreed objectives in recycling, energy use, and the like. Here, unlike the previous discussions of planning incentives versus objectives, the objectives had come first before an actual incentive scenario is implemented to the human resources. However, even if the process is turned around as compared to the earlier discussions, the operations of the company are still within the parameters of the planning incentives for human resources aligned with the objectives of the firm.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 25 September 2016
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