Google Tackles Incentives and Rewards

If there’s one thing you must know about Google, it’s that the Mountain View, Calif.-based tech firm is obsessed with data — gathering it, analyzing it and using it as the basis for every decision it makes. It even has a function within its HR department — or People Operations, as it’s called there — called People Analytics, which applies that data-intensive methodology to workforce-related matters. People Analytics recently took the lead in a project at Google to make its incentives-and-rewards program more “meaningful” to its 36,000 Googlers, as explained in a session on Monday at the WorldatWork conference in Philadelphia.

“Focusing on the user is a big tenet for Google,” said Kathryn Dekas, people analytics manager. “Within HR, our users are Googlers — and we want to provide them with the most unique user experience.”

Google avoids benchmarking and best practices, preferring to do its own data-gathering and research instead, said Dekas. First, the People Analytics team did a “deep dive” into the available research on employee recognition–a hallmark of Google’s approach, she said.

“First, you want to ensure you’re not overlooking good external research, that you’re starting on a solid foundation and that you’re not duplicating work that’s already been done,” said Dekas.

Next, the team turned to internal data-gathering. It added some questions to “Googlegeist,” Google’s employee engagement survey, to find out how employees perceived the company’s existing recognition programs. It followed that up with employee focus groups and in-depth interviews of selected Googlers.

Through its external research, the team came across the book “Nudge,” by Richard Thaler and Cass Sunstein, which examines the concept of using data and behavioral science to “nudge” people into making better decisions, said Dekas. The team ultimately incorporated some of what it learned from the book into the design of Google’s new recognition and reward system by adding “nudges” that encourage managers to put some thought into selecting a reward for an employee that will resonate the most with him or her.

“We want to nudge managers into remembering to take every opportunity to explain to the employee why he or she is valuable, and to select rewards that are thoughtful, that demonstrate that you understand what’s important to them,” said Dekas. “On the flip side, the system also nudges managers to ‘be real’ — to consider whether they really know the employee that well, and if they don’t, encourage them to offer a selection of rewards instead.”

The system also “nudges” recognition recipients to select rewards wisely, said Dekas. For example, the team’s external research found that experiential rewards — such as trips employees can take with loved ones — are much more satisfying than material items and that people are much more likely to regret selecting or spending cash rewards on “practical” items than on “indulgences,” she said. Meanwhile, spending money on others “is a win/win,” she added.

Prior to rolling out the system, the team engaged in a “user experience study” to ensure that Googlers liked the system, that it was easily usable and it fit the company’s culture, said Stephanie Tietbohl, Google’s compensation manager. “We got some really great insights from the user experience study,” she said. “They really liked the one-stop nature of the system. The concept of point delivery through a catalog system did not resonate, however — they said it felt more like a shopping experience than a recognition experience.”

After making some tweaks to the new system (which the company decided to build in-house), Google plans to roll it out very shortly, said Tietbohl. “We’re very excited,” she said.

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