Open Sourcing Google’s HR Secrets

Google

For six years in a row, Google has topped Fortune’s list of the “100 Best Companies to Work For.” It has also been recognized over 100 times in the past five years as an exceptional employer both in the U.S. and other countries.

What makes Google’s work environment so outstanding? Laszlo Bock, senior vice president of people operations for Google, has authored a book titled, Work Rules! Insights from Inside Google That Will Transform How You Live and Lead. Speaking at a 2015 Wharton People Analytics Conference, he called the book “really an effort to open-source what we learned at Google … to make work better in other places.”

Bock leads Google’s people function globally, which includes “all areas related to the attraction, development and retention of ‘Googlers,’” to quote his bio. He observed candidly that for too many people in the workforce today, “work just sucks…. It’s just not pleasant; it’s a means to an end.” He pointed out that “nobody works 40-hour weeks anymore,” and that if one were to actually calculate it, people spend more time working than they do anything else, including hobbies, being with loved ones and even sleeping. “If we’re going to invest all that time, it should mean something; it should motivate you. You should love it.”

In his talk, Bock described some of the innovations he and his team have made at Google to make work more effective and enjoyable. The special sauce, he said, is introducing more analytics into the realm of HR.

HR Needs More Than Just HR People

According to Bock, one significant difference about Google’s HR division — or People Operations, as the company calls it — is that a “three-thirds” hiring model is used to staff it. Bock explained that one-third consists of people from traditional HR backgrounds, another third is recruited from strategy consulting and the final third is composed of academics in fields ranging from organizational psychology to physics.

“If we’re going to invest all that time [in working], it should mean something; it should motivate you. You should love it.”

Bock observed that “each brings something different to the party.” The traditional HR people, he said, understand Google, have great intuition and can deal well with problematic situations. The consultants understand business in general, and can take a complex problem, structure it and break it down for analysis. And the academics “actually force us to prove that all this stuff we’re [claiming] actually works.”

For 30 years, “HR as a profession has been saying we need a seat at the table, only to be told that [we] need to understand the business first,” said Bock. But they need to demonstrate more than just “an understanding of an income statement…. If I say performance management should work a certain way, or that we should stop doing a certain kind of recruitment, that takes more than just understanding the business. That takes analytics.”

Bock described how he and his colleagues changed some basic hiring processes at Google based on experimentation and analysis. One change was to the average number of interviews it took to hire someone. When he first became head of people operations in 2006, building up the staff was a priority. Yet it was taking somewhere between six and nine months to get hired. The absurdly long hiring cycle became notorious: Bock recalled that “everyone had a story about their bad interview experience with Google,” and people would eagerly share it with him whether he was out to dinner in a restaurant, looking at houses with a realtor or anywhere else.

“So we did a lot of math, we did a lot of experiments,” said Bock. In Work Rules! he credits then-staffing analyst Todd Carlisle with discovering that four interviews were sufficient to predict with 86% confidence whether or not the company should hire someone. The company then instituted this “Rule of Four,” and Google’s time to hire, according to Bock, “went from something like six months to 45 days.” (During Bock’s tenure, Google’s number of employees has grown from, he writes, from “6,000 employees to almost 60,000, with 70-plus offices across more than 40 countries.”)

And who was Google hiring? Another problem perceived by Bock was that “we were really biased toward people with fancy degrees…. If you attend Harvard versus being number one at SUNY Binghamton, who does better?” He quoted findings that showed that the very best students from any school outperformed the average students — and even the 60-70th percentile students — at major Ivy League universities. Bock commented, “So there’s actually evidence to suggest [that] as a recruiter, you’re better off casting a wider net, which is what we do.”

The absurdly long hiring cycle became notorious: Bock recalled that “everyone had a story about their bad interview experience with Google.”

Grades, too, have been overrated, said Bock. “We did a bunch of analysis and found that grades are a little predictive for your first couple of years, but for the rest of your career, they don’t matter at all…. What matters is the education you got and your ability to learn…. We know those things are predictive.” Bock also shifted Google’s focus away from SAT scores. He said it had been a mistake for the company to be asking all candidates, some as old as 50, for their SAT scores (and college transcript), often passing on those that didn’t score high enough.

Performance Management at Google

Bock has also brought his analytical approach to evaluating existing employees, managers and teams. He described a study of the top quartile of good managers, reviewing their behavior to see what they did differently from less-effective managers. But the only way to truly measure the effect of a manager’s performance on his or her team, said Bock, would be to make people switch teams. Although normally that would be “cruel,” said Bock, Google provided a natural laboratory for the experiment, because Googlers, as a company policy, routinely switch jobs. So Bock was able to assess whether bad performers working for bad managers improved when they went to work for good ones, and vice versa. He compiled evidence that showed that “the actions that a manager takes actually have measurable, real consequences in terms of performance…. It was a beautiful, beautiful finding,” said Bock.

Other HR functions that are handled differently at Google include the well-known (and generally dreaded) annual performance evaluation. Google has a structure whereby employee development feedback is separated from performance feedback. Bock noted that this was instituted because when people receive feedback that they believe threatens their bonus or salary grade, they become defensive and stop listening.

“We’ve all worked with people who are kind of struggling, and you go to them and say: ‘Hey, things aren’t going so well….’ [Then,] they devote all kinds of energy toward arguing, ‘My performance is fine — you, manager, just don’t get it.’” Then, said Bock, they spend two weeks documenting their performance themselves. And many managers’ typical response will be: “Oh, just take the bonus.” At Google, on the other hand, said Bock, “we want our managers to be open to developing people…. We do that by removing the performance stigma.”

Managers, too, are evaluated. At Google there are twice-yearly surveys in which employees give upward feedback. The organization has some unique transparency around the reporting of this, although Bock points out that it has limitations. He explained that if an executive has more than 100 direct reports, the survey is made openly available. But executives who have fewer reports get to choose whether or not to make the results public — a rule based on the idea that a manager’s low rating might have been caused by “a good purpose.” “If you have a manager whose ratings look really low … she [might be] trying to make the team better. She’s being really tough, and firing people, and moving people around, [and that’s why] the team’s going to be unhappy.” Google doesn’t want everyone in the organization to assume this person is a terrible manager, said Bock, when she might be one of the best.

“[We found that] the actions that a manager takes actually have measurable, real consequences in terms of performance. It was a beautiful, beautiful finding.”

A Word to the Wise HR Professional

Bock noted that getting Google to allow him and his team to establish a robust human resources program has often been an uphill battle, even though he said he has “fought for performance management from day one.” He commented that Google is an engineering company, and as such there are some special challenges. “My brother’s an engineer, my dad’s an engineer, so I can say this,” he began. “[Engineers] are really good at one set of problems, and they’re really smart, and so they extrapolate that they’re good at all kinds of problems, and know better.”

In addition, he said, Google has a culture in which the employees — who are, of course, engineers — run the company. So Bock’s early attempts to introduce programs like talent management and succession planning were not well received. “Eric Schmidt [Google’s then-CEO] told me, ‘That’s all a waste of time; that’s a terrible idea,’ and I thought, ‘This is not going well.’” He said that the mechanism to finally achieve change was to start with small pilot experiments. “We did a small experiment on only 6,500 of our employees recently where we had around eight different systems running in parallel to figure out what worked the best.”

Bock stated that a company doesn’t have to be as big or profitable as Google to run some experiments from its HR department. He advised HR practitioners to “hire somebody with a quant background and a semester or two of MBA-level statistics. That’s all you need … someone to be able to tell random variation from actual, cause-driven variation.” He suggested HR professionals think of a problem that both matters to the business and is interesting to them, and examine performance differences between different categories of people. Then they could set up test situations. “Take two more groups — it doesn’t matter if they’re five-person groups or 500-person groups … and say, ‘We’re going to treat them differently, and let’s see what happens.’”

Bock observed: “All of our clients, all the people we work with and partner with, they all think they’re really good at ‘people stuff.’ Because our [human] intuition is to think, ‘I’m a keen judge of character; I of course, make fair decisions; I’m completely unbiased.’ And we all make unfair decisions. We’re all biased. So, whenever you can qualify what you’re saying with these experiments is a way to get there and improve your credibility.”

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