CASE STUDY

HOW THEY RUN PERFORMANCE MANGEMENT AT GOOGLE When it comes to unprecedented scale of success and growth, one company reigns supreme: Google. Started as a research project in 1996 by then PhD students Larry Page and Sergey Brin at Stanford University, Google has become a multinational technology company with industry leadership in internet-related services and products.

HOW DOES PERFORMANCE MANAGEMENT WORK AT GOOGLE?

Performance reviews are customized to provide great results for Googles smart creatives. Senior Vice President of People Operations Laszlo Bock provides great learnings about their performance management in his book titled 'Work Rules'. Googlers first identify a group of peer reviewers for each employee, which also includes co-workers that are junior to them. Google has abolished numerical ratings in April 2014, so each Googler are now subjected to a five-point scale ranging from needs improvement to superb. Carried out semi-annually, peer reviewers are asked to state one thing the reviewee should do more of and one thing that they can do in a different way

After the feedback cycle, managers come together to take a look at these peer reviews. The main aim is to prevent bias in feedback by asking each manager to justify their decisions to each other. Managers are informed about potential obstacles to objective feedback, one of which is the tendency to overemphasize an employees most recent performance.

By keeping these obstacles in mind, managers decide on the final evaluation of an employee. Summaries of these assessments are shared semi-annually and compared to a set of examples to justify the evaluation. Employees are then informed of their compensation, but compensation is decided separately from the evaluation taking place during the reviews. Google keeps pay discussions separate from and peer feedback with an aim to provide the right motivation to their employees, which is to grow and contribute to Googles success

LEARNING

Research done by Edward L Deci, a Professor of Psychology at the University of Rochester, sheds light on the effects that two types of motivation have on achieving goals. Desis research indicate that when someone is motivated using an external reward such as money, their motivation tended to decrease. By contrast, when they are motivated by verbal reinforcement and positive feedback, their motivation increased. This in line with what Google pursues with its performance management. Bock et al. understand the importance of motivating their smart creatives with right initiatives, and provide enough freedom for their ideas to flourish and become the next big thing at Google The ultimate goal of performance management systems should always be retaining talented employees by keeping them fulfilled and enabling their growth. Google seems to get it right with its carefully thought performance management. A vital part of why performance management works well at Google is its transparency. The company keeps performance data of everyone accessible including the CEOs Page and Brin. This way, Google manages to increase credibility and keep employee engagement on track Apart from quarterly, semi-annually and annually conducted performance reviews, what Google can achieve next is enabling continuous feedback between peers. This way, managers can overcome evaluation bias much more easily as there will be hard proof of employees performance over a given period. By implementing solutions similar to Impraise, Google can engage its smart creatives much better by providing them with complete ownership of their own development.

Question 4 (20 Marks)

From the case study above Googles ultimate goal of performance management is to retain their talented employees by keeping them fulfilled and enabling their growth. Performance management and performance appraisal form an integral part of the performance management systems in Google. Critically evaluate the distinctions between performance appraisal and performance management