Organization Performance - Google - Case Study Example

Organization Performance - Google Introduction Organization performance is strategically determined and operationally dependent on a few variables of primary importance. Google being an internet search engine is focused on serving customers worldwide by managing its organizational performance function in the light of its strategically advantageous position over the years. Organization performance is defined as a broad theoretical construct that encompasses those activities that organizations perform such as production, customer care and coordination and interaction with other business entities. Thus the strategic process of organizational performance is characterized by such dimensions as productivity or efficiency, customer satisfaction, customers’ brand loyalty, employee satisfaction, quality management, supply chain management, value chain, VRIO applications and domain control (Alexander, 2006). Strategic processes and systems within the organization involve all management functions and corporate decisions. The company would have to initiate its strategic functional processes and systems in keeping with its own strategic competitive environment as determined by SWOT analysis. For instance internal organizational arrangements for communication, quality management, internal value chain management, employee relations, HRM function, budgetary control, cash flow management, motivation and so on will have to be aligned with organizational goals. A gourmet chocolate manufacturer would have to take into consideration the competitive environment and available strategic choices. Corporate Social Responsibility (CSR) policies and initiatives have become an inevitable component of the modern business organization’s corporate objectives to such an extent that they are incorporated into the organizational goals. Google’s as surveyed by this writer have adopted the same CSR initiatives adopted by the internet search engines on a global level. This paper would focus on the convergence of organization performance related convergence/divergence arising from CSR initiatives and policies at Google against the backdrop of an evolving competitive environment. Analysis Google is a successful organization in the world that focusing on innovation and smart business practices. Each and every employer in the Google treated as equally important and management believes that Google’s success depends on interaction of employees with sharing their valuable ideas and opinions. Therefore motivating the employees has taken to considered by Google when they are managing the human resource. Despite the complexity and the competition in the business environment most of the organizations pay their considerable attention on increasing employee motivation, performance and productivity. Management believes that when the employees’ motivation levels increases, they trying to do their best in the workplace and committed to the management with alive, corporate and energetic. Thus when motivation levels are low, simply employers are unhappy and underperforming in their work with absenteeism and lower productivity. Google has revolutionized its services and redefined its employees in the workplace, especially Googlers are working closely with the management teams to attract, hire, develop and reward employees. In fact HR team of the Google is using every level of employee’s talents and performance towards the success of the organization. Thus Google is providing an “individually-tailored” compensation package consisting of competitive salary and bonus with further rewards based on their performance. Googlers focusing on drive in small teams with high energy environment. According to the Fortune magazine Google was rewarded as one of “the 100 best companies to work for” in 2009. In fact it could earn this recognition basically due to innovation benefits, flexibility, employee satisfaction and also the opportunity to pursue ideas in the working environment. However Google has adopted some motivation principles in the work environment such as “Appreciation is the best motivation”, so management has created a fun and inspiring workplace with host of facilities such as - on-site doctor and dentist; massage and yoga; professional development opportunities; shoreline running trails; and plenty of snacks to get throughout the day. Secondly “Work and play are not mutually exclusive”, so management has given the opportunity to code and pass the puck at the same time. Next, “We love our employees, and we want them to know it”, thus management of Google provides a host of benefits to its Googlers such as a choice of medical programs, company-matched 401(k), stock options, maternity and paternity leave, and much more to further enhance their performance. However Google’s work environment encourages people to work because it provides flexible working hours, family programs, mother programs and rest rooms to pursue their personal interests. In fact employee resource groups (ERGs) of Google is dealing with build the community and driving the Google’s policy across the world. Thus ERGs involving to create a network over the world, to strength the company’s retention programs as to provide a feedback about the Google’s HR programs and policies and also to provide valuable opportunities for personal growth and professional development. Google indeed adopted some far reaching HRM practices to achieve organizational goals. The most powerful motivator of the workforce was the requirement to become shareholder of the company in addition to being an employee. Google’s all employees served as equity holders with employee ownership. Next the company encouraged team work in which 3 to 4 employees were teamed together so that time waste in coordinating work effort could be reduced and employees would be motivated by team spirit. In addition to these employee friendly work practices and motivators a number of others were also adopted. In fact at Google, work teams tended to be smugly satisfied with their own performance in the absence of standards of reference. Performance of work teams has to be measured against relative performances of others and this requires common standards to be set up on a priority basis. Broader level of employee participation, minimal hierarchy, in-house expertise and problem solving and job rotation practices were good measures but they were not backed by a system of performance-based metrics. However, with the ever increasing threat of competition in the market, HRM practices at Google were oriented towards creating a pleasant work environment with a set of well defined corporate goals. Despite Google’s growth, its management is constantly considering and encouraging employee interaction and the exchanging ideas among all level of employees and across the departments. There is considerable correlation between CSR initiatives and success of employee retention strategies at Google’s. Secondly despite an obvious lack of comprehension on the part of some employees of the existence of CSR policies and initiatives and the related positive impact on employee retention and overall HRM practices at these restaurants, the general agreement is that key performance indicators on the relative success of CSR initiatives have been gathering positive momentums at these restaurants. Thus this paper has successfully established a set of positive correlations between a number of CSR related key performance indicators and the organizational outcomes especially concerning employee retention strategies at Google’s (Werther & Chandler, 2005). Particularly the environment and employee welfare related policies have shown a progressive improvement. Further employee retention strategies at Google’s and labor turnover figures are interconnected in such a way that employers have particularly been affected by a lack of concern for their negative experiences while dealing with customers. Finally this study has clearly identified a positive set of outcomes related to HRM practices and motivation thus Google’s have acquired a greater dimension of integrity at the inner-house operational level on par with CSR initiatives. However effective HRM practices must be aligned with organizational outcomes such as internal value chain enhancement, productivity and motivation parameters. Google is being practicing this kind of alignment in its strategy and policy with focusing on rewarding system for individuals and teams. HRM is a functional strategy that needs a freer organizational environment to develop into a code-based framework or model of convergence (Bowles & Cooper, 2009). Google’s HRM practices were inherently flawed though it made some convincing efforts to identify workplace discontent issues and their implications for organizational outcomes. Organizational outcomes or/and corporate goals need to be clearly defined in order to achieve at least some of them in the long term. Google have focused on the strategic HRM practices such as job enrichment and job enlargement rather than job rotation and job sharing. Its ability to come to terms with employee motivation and communication interconnect would have been one of the biggest strengths at Google despite the shorter and flatter management and organizational structures. This link serves as a paradigm for the entire organization irrespective of its internal management and organizational structures’ efficacy. In other words the functional HRM related tasks at Google were paid attention by its top management. Google’s HRM philosophy was centered on a hybrid model of the time, i.e. a good admixture of performance-based incentives, people orientation and share ownership in the company would motivate the average employee to perform better (Epstein & Manzoni, 2006). However Google could have done better by creating proper channels of communication for continuous feedback of information, especially from the lower layers. Secondly employees could have been encouraged to take part in service ‘quality improvement circles’. People orientation is basically a concept associated with democratic organizational structure and management style. Thus Google’s management has identified the positive outcomes related to the persistent practice of encouraging employees on the classical lines of motivation. Endogenous variables such as value chain and x-efficiency (i.e. related to management) could have received much greater emphasis against the backdrop of fast evolving regulatory frameworks in the US. There were only a few higher level management layers in the hierarchy, the support for communication feedback was increased. Passive communication networks exist in organizations at times. However Google managed to initiate positive management practices that emphasized the use of communication strategy for the successful implementation of procedural rules. Managers’ styles keep on changing with time and circumstances. Thus it’s very rare to see organizations being run strictly in accordance with the textbook theory. Google’s acquisition of the social networking site You Tube is a well calculated strategic move in anticipation of intense rivalry from Amazon, Yahoo and Microsoft. However Google would focus on brand equity creation by building up customer-centric service quality points. Quality points aren’t physical positions but some service related structural focal points where employees are positioned to meet appropriate demands of customers with a near approximation to perfection. Indeed it’s true that perfection doesn’t exist in the provision of either a good or a service. But nevertheless perfection in itself is a near approximation or a relative standard of reference for the HR management personnel to achieve in the long run. There is an ever increasing tendency among fairly big firms in technology-centric industries, to merge together to achieve quick returns. The recent spate of acquisitions by Google shows this trend. During the last few years Google has experienced a variety of acquisitions and mergers. In the digital communication and web search engine industry numerous substitutes exist in the form of price competition, i.e. X-firm’s product which is almost identical to the Y-firm’s product, is preferable if the former product’s price is lower than the latter’s. Google is not altogether impervious to this rule. Its current operations are highly determined by its Mergers & Acquisitions (M&A) policy. For instance its acquisition of YouTube for a sum of $1,650 million is the biggest to date. YouTube’s video sharing business had a very big impact on social networking customers and bloggers. Thus Google has realized the strategic importance of YouTube in enhancing its market expansion. This way it has effectively curtailed the threat of substitutes to a certain extent (Girard, 2009). Customer satisfaction has played a very big role here. Customer satisfaction strategy at Google as outlined by the top management is based on creating brand value. This in turn depends on brand loyalty. As is the case with any super brand creation efforts of organizations, brand loyalties are subject to change. However Google has successfully maintained its domain through the sustenance of resource capabilities that adequately identify the risk factors such as competitors’ strengths and weaknesses. Google’s domain related strategy is basically determined by its focus on strategic resource development process. Being an internet digital service provider organization, Google has to maintain its domain so as to prevent overlap through identical service provision by rivals like Yahoo, Amazon and Microsoft. Google’s strategic policies and initiatives in seeking to motivate staff are based on the primarily important requirement of competing against an ever intense market environment which is becoming more oriented towards an oligopoly in structure. As is the case with any oligopolistic market structure the digital communication and internet search engine industry is going to be more competitive in the future. It’s here that Google has successfully adopted some skills training and development programs. Outline of motivation theories Figure 2: Employee Retention Practices through Motivation Theories to Increasing Organizational Performance Source: The Journal of American Academy of Business, Cambridge, 2004 Motivation theories such as Maslow’s hierarchy of needs, Herzberg’s dichotomy of hygiene factors and motivating factors, McGregor’s theory ‘X’ and theory ‘Y’ people, Edgar Schein’s assumptions based approach and Tailor’s scientific management approach have been in used for long time. However practical situations in the organizational setting can be an admixture of some or all of these theories. Modern approaches to motivation and organizational performance Modern theories that have been developed to meet the ever increasing demand for better and more articulate theories of motivation include those expectancy and contingency theories. According to expectancy theory it’s difficult to align people’s behavior with their goals unless there is a clearly defined approach to motivation. Expectancy theory places emphasis on the link between performance and reward. However unlike the earlier theories it recognizes the ability of the individual worker to reach goals. Thus leaders and managers must be able to identify those values possessed by individual employees and reward them accordingly. On the other hand contingency motivation theories place emphasis on the leadership and its contextual relevance to profiling skills and categories of employees. This is in fact related to job description that is routinely carried out at Google. However mere job description doesn’t help in identifying employees’ skills and assigning them with suitable jobs. According to this theory leadership styles must be able to recognize particular skills and utilize them according to respective situations, thus motivating them to achieve goals (Neely, 2008). Therefore organization performance is both strategically determined and operationally interconnected. Contingency theories are focused on a number of implications arising from delegation, decentralization, span of control, delegation, chain of command and management structures. In addition to the above it is also concerned with culture related conflicts at the organization. Above all it places emphasis on knowledge of individuals. Modern theoretical and conceptual frameworks on motivation have much broader contingency parameters. For example Drucker (1999) questioned the credibility of seeking to motivate employees purely on monetary incentives. Google was paying higher salaries plus a monetary incentive based on performance of employees to perform better. And also employees might need non-monetary incentives to perform much better. Google’s recruitment drive is ill design and ill planned. In the first place motivation of staff depends on a number of complex and diverse factors. According to recent research studies carried out in some manufacturing industries in Japan, employee efficiency or productivity is basically determined by three factors. (a). The degree of satisfaction that each employee receives by doing the current job in comparison to the degree of satisfaction he will have in doing the next best job. (b).The totality of all monetary benefits including pay. It also includes all monetary incentives such as health insurance and paid holidays. (c). All non-monetary benefits such as promotions, responsibility, the right o join trade union, the freedom to put forward demands, job enrichment, job enlargement, training and development. Similarly recruiters have very little freedom in deciding on the company policy impact on the recruiting process. Pay rates determination might lack logical but complex computational methods. Pay rates determination criteria at Google are essentially influenced by the HRM department’s evaluation techniques (Roberts, 2004). Google has adopted a monetary and non-monetary incentive based assessment approach. Thus Google’s ability to meet the modern standards by recruiting better skilled respondents can be traced back to the success of strategically adopting retention schemes that are well suited to meeting the skills requirements of the company in the long run. Job enrichment and job enlargement policies adopted by recruiting companies are sometimes geared to meeting the HRM-based functional requirements. For instance efforts by HR managers to reduce the level of absenteeism are reflected in the design and implementation of job enrichment and enlargement strategies that identify and address the overriding concerns of employees. Google has been focusing attention on such strategies in order to retain staff. The rate of recruits at Google keeps on rising yet again probably due to the ability to identify the skills and to match those Google’s requirements through retraining of recruits. However retraining requires a set of techniques that would be causatively superior in enhancing hitherto unused skills. Labor skills cannot be retrained to or reoriented unless the trainee has a degree of flexibility. The company strategy on recruitment has changed in the recent past. Staff requirements are reflected in increasing efficiency and work standards. Google’s performance metrics have been positively influenced by these strategic changes. According to Drucker (1999) knowledge workers placed themselves at the helm of affairs by controlling the information flow about the workplace requirements. Thus the HR manager is a knowledge worker whose productivity is determined by the amount of knowledge he has on the endogenous and exogenous variables associated with the HRM function. As demonstrated by expectancy and contingency theories of motivation Google’s strategy as a recruiter can be subject to a contingency analysis. Given the theoretical perspectives of these modern theories the psychological bias is obvious. In fact the average employee assesses series of expectations including ability to adjust to the work environment, capabilities to identify and respond efficiently to day-to-day problems in the workplace. Thus these theories focus on the individual’s performance and the corresponding reward. According to contingency theory employees are motivated depending on the leadership style. In other words modern motivation theories are increasingly based on leadership theories. For instance transactional and transformational leadership theories have been made use of in order to identify particular characteristics of employee behavior in the work environment. In other words contingency theory identifies the existence of a positive correlation between leadership style and employee motivation. This is not a new idea though. This link has been there for number of years. However Google’s increasing performance can be attributed to the total monetary and non-monetary compensation for employee efforts rather than the time specific performance curve’s declined. In other words Google’s management efficiency in recruiting the right type of respondents might be the result of a purely cyclical tendency to match the immediately available skills with the company requirements (Smith, Wiley & Williams, 2009). Therefore the modern theories based on expectancy and contingency models of employee behavior can be exclusively applied to interpret Google’s increasing performance. However its strategy can be partially explained with reference to these theories because HRM function is exclusively determined by the nature of the work environment and company requirements. Google’s horizontal democratic organizational structure has invariably supported staff empowerment programs at every level of the hierarchy. Exclusively pay based compensation does not work in knowledge based industries. Therefore Google has successfully adopted a mixture of monetary and non-monetary incentive to achieve the current level of organization performance. In other words the HRM function must be reorganized to facilitate a flatter and shorter hierarchical departmental structure so that communication feedback from lower level employees would be more efficient. Google’s has adopted non-monetary non-pay based motivation and performance enhancing strategies such as job enlargement, job enrichment and T&D programs. Google’s skills training and development programs in accordance with company strategy including the long-term recruitment policy have been relatively more successful. Google’s recruitment strategy is based on identifying appropriate skills and matching them with existing jobs. It has also been able to change attitudes of employees by enhancing existing capabilities. Further employee motivation, skills development and training strategies at Google and labor turnover figures are interconnected in such a way that crew members have particularly been affected by a lack of concern for their negative experiences while dealing with customers. This study has clearly identified a positive set of outcomes related to HRD practices and motivation at Google. The theoretical posture of the paper is based on the fact that HRD practices at Google have acquired a greater dimension of integrity at the inner-house operational level on par with positive employee motivation and in-house HRD strategy. Its strategic management culture has led to the development and recruitment of a new breed of executive leaders. This particular focus on quality of executives is determined by Google’s commitment to serve the community with specific emphasis on customer care. The organization first had high employee turnover rates. But subsequently these rates were brought down to a manageable level. The Balanced Scorecard Technique – a new performance management and measurement system – was adopted by Google. Though a lot of old financial techniques are still included in the BST it’s still regarded by some big organizations as a truly authentic metric in measuring success. Google’s own story suggests that the BST has been somewhat helpful in determining the correlations between its innovative capabilities and critical success factors. In fact the BST has not taken into consideration such critical success factors as the exponential growth of the Google’s customer base. Strategic environmental analyses based on these variables have very little relevance to understanding the organization’s capabilities. Therefore it’s essential to focus on a broader spectrum of variables including quality management and internal value chain metrics. The system is intended to measure such variables as quality, service and people by using standard metrics. This system has enabled the company to identify and benchmark areas of improvement though such metrics depend exclusively on available data which could be influenced by bias and prejudice. Excessive reliance on financial metrics can be highly misleading because the process of modern innovation is invariably targeted at customer value creation, external supply chain management, internal value chain, international HRM practices, better employee relations, quality improvement and process and technology improvement. The resource-based view of the organization and the connected VRIO analytical framework depend on two assumptions – resource heterogeneity and resource immobility. Resource heterogeneity presupposes that each firm would possess a distinctly unique set of resources and connected capabilities thus giving it an advantage in cost over the rest of its rivals. Google has particularly invested in both the options by adopting a multi-prone strategy of Research & Development (R&D) and search applications thus effectively curtailing the degree of freedom enjoyed by rivals in copying its resources.› Visit Amazon's Kathleen B. Hass Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central This strategic initiative on internal resource base development along with its formidable management culture has enabled Google to evenly balance itself on the VRIO framework thus equipping itself with additional capacity to compete. VRIO - value, rarity, inimitability and organization – framework enables the organization to build up its resource base in a unique manner so that its rivals might not be able to copy those resources. Google has been able to strategically push its product portfolio in the internet search engine market at a very competitive level. Competitive strength of the organization is determined by its business strategies including the marketing strategy. For example Google as a service provider would have to initiate its business strategy of satisfying the consumer with a range of services so that competitors would be compelled to match its own strength or adopt a different policy approach such as lower prices to attract customers. How best Google would be able to match its competitors in this environment of stiffer competition depends on the inner organizational strengths such as leadership style and motivation of staff. Conclusion Organizational performance at Google has been described in a variety of terms by analysts and the related learning outcomes such as productivity, employee satisfaction, customer satisfaction, customers’ impact on organizational goals, internal value chain and supply chain management, HRM practices and policies, quality management, VRIO applications and domain maintenance have been subject to a rigorous analysis here. Google’s organizational performance related metrics like productivity have been cited by researchers as one of the best in the world with added emphasis on value added services on its portals. Particularly the functional parameters associated with HRM and employee motivation at Google have undergone a rapid transition. Such parameters have increasingly been redefined by modern theorists to improve a variety of work environment based practices. Independent analysts have identified a completely different set of variables that directly affect employee motivation. The strategic significance of these modern approaches depends on a number of factors such as organizational and management structures, culture, leadership style, corporate goals, stakeholder satisfaction and external environmental pressers, especially related to competition. Google has put in place a comprehensive monetary and non-monetary package of incentives to reward performance. Employees are efficient because management has successfully managed skills training programs within the organization. While Google has initiated comprehensive job enrichment and enlargement programs to enhance the capabilities of staff and management has been able to address the need to adopt skills retraining programs to reorient the potential employee. Customer value creation and satisfaction at Google have invariably been underlined by its strategic emphasis on brand value creation which has increasingly been focused on the value added services. For instance Google’s pricy acquisitions like You Tube have helped the organization to overcome some of the customer satisfaction hurdles faced by rivals like Microsoft and Yahoo. Its VRIO applications related activity is based on the need to prevent successful copy-cat by competitors of its resource capabilities. Its CSR policies and initiates have been lauded for their community welfare centric approach. Quality management and supply chain management process too have contributed in large measure to this success in organizational performance at Google. REFERENCES 1. Alexander, J. (2006), Performance Dashboards and Analysis for Value Creation (Wiley Finance), New Jersey: Wiley. 2. Bowles, D., & Cooper, C. (2009). Employee Morale: Driving Performance in Challenging Times, Hampshire: Palgrave Macmillan. 3. Epstein, M. J., & Manzoni, J.E. (2006). Performance Measurement and Management Control, Volume 16: Improving Organizations and Society (Studies in Managerial and Financial Accounting), CA: JAI Press. 4. Girard, B. (2009), The Google Way: How One Company is Revolutionizing Management As We Know It, San Francisco: Starch Press. 5. Neely, A. (2008). Business Performance Measurement: Unifying Theory and Integrating Practice, New York: Cambridge University Press. 6. Roberts, G. (2004). A Literature Review on the Impact of Investment in Human Capital on Economic Success: How do Human Resources Practices Affect Organisational Performance?, Hamburg: Diplomarbeiten Agentur. 7. Smith, B. E., Wiley & Williams, R. (2009). Google Business Solutions All-in-One For Dummies, New Jersey: John Wiley & Sons. 8. Werther, W. B., & Chandler, D. (2005), Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, California: Sage Publications. Read More