How Google Gets a Good Return on Payroll

Pay levels at Google are tied to the company's business strategy. According to Google's compensation director, Frank Wagner, the company sets pay levels to achieve three goals:

$(1)$ recruit and keep the best talent; $(2)$ motivate superior performance, including innovation; and

$(3)$ link rewards to the company's success. Given the stiff competition for programmers and

software engineers, Google tackled this project by applying one of its greatest strengths:

expertise in gathering and interpreting data. Google surveyed its employees to find out what kinds of pay plans they would value the most. Based on the results of the survey, Google's compensation team persuaded the board of directors that the most effective way to continue retaining the best talent and sharing the company's success with employees was to increase pay levels for all employees through a $10$ percent increase in salaries. The across$-$the$-$board raise generated a wave of publicity. In the months following the announcement, Google saw a decline in its employee turnover, and the percentage of job candidates who accepted offers increased.

Question

If you were the compensation director for Google, how would you justify the across$-$the$-$board raise, particularly given the hit that the company's stock price took as a result of the payroll increase?

Discussion

If your income level was based on how much or how less you use social media, how would you want your salary to be compensated? Your choices would be increase or decrease in pay, work$-$life balance or some other type of benefit. Please explain your answer.