Google’s Compensation Package

Google’s Compensation Package

By

Becky Kennedy

For

Instructor: John Cook

Compensation and Benefit Systems 365

September 27, 2015

Google’s Compensation Package

Compensation is defined as, “Both the intrinsic and extrinsic rewards employees receive for performing their jobs.” (Martocchio 3) Intrinsic rewards are rewards that come from within the employee. Extrinsic rewards are those that include monetary as well as nonmonetary rewards. Both intrinsic and extrinsic compensation reflects an employee’s complete compensation package. This paper will examine the compensation package of one of the top companies and one of the best companies to work for in the United States.

Google is a tech giant in the information technology industry. According to their CEO and founder, Larry Page, “Our goal is to make it as easy as possible for you to find the information you need and get the things you need to do done.” (Google Company) Google provides a variety of tools to guide users in areas ranging from the web, mobile, business, media, geography, social and home/office. Not only are they successful in providing significant tools for users, they also provide a great place for employees to work. Based on a review of several factors conducted by CareerBliss.com, Google earned a reputation of being the “Happiest Company in America”(Phelps 2014) and has been rated number one six times and a total of nine times on the list of Fortune’s 100 Best Companies to Work for. ( 100 Best Companies)

They did not become the happiest company or the best company to work for in America for no reason. Here is a brief list of some of the factors and benefits that help contribute to their success as a great place to work:

• Pay some of the highest average salaries in their industry
• Provide a welcoming work environment
• Allows employees to pursue special projects
• Give all employees a voice regarding potential cultural changes and suggestions
• Recognize today’s modern family (same sex couples)
• Provides many different benefits to employees (Phelps 2014)

When employees feel like they are treated like more than just an employee, great things can happen. As the former CEO of Xerox states, “Employees who believe that management is concerned about them as a whole person, not just an employee, are more productive, more satisfied, more fulfilled.” (Employee Quotes)

        All of the above mentioned results are the product of Google’s all around compensation package. According to Bob See, a recruiter for Google Engineering, Google does not negotiate compensation packages but will consider revision of the offer if new data such as a competing offers comes up. (Gillet 2015) Negotiations are rare at Google because the overall compensation packages they offer are usually much higher than the candidates’ current compensation. (Gillet 2015)  Google uses four steps when determining candidates’ offers:

• Current and competing offer information is gathered from candidates
• A compensation analyst a standard offer package based on ranges of the role, level of the position and location.

• They include 3 components- base salary, bonuses, and restricted stock units

• If the overall value of the standard offer is more than the candidate’s current and competing compensation, then the standard offer is approved.
• If the value of the standard offer is below the candidate’s current and competing compensation, a compensation analyst will work to provide a competitive offer. (Gillet 2015)

In most cases, Google takes a market lead approach when offering a compensation package to potential candidates. This allows them to provide employees with market-competitive compensation packages.

         Google’s core compensation consists of annual salaries, monthly salaries and hourly wages. Managers, analysts, designers and engineers are some of the highest compensated employees with an average annual salary ranging from about $100,000 to almost $300,000. (Glassdoor) Associates, contractors, and interns are paid an hourly wage with some interns receiving a monthly salary depending on the department they are working in. (Glassdoor) On an interesting note, in 2005  Larry Page only received a $1 annual salary and still continues to receive a $1 annual salary; however, he is worth over $30 billion (Wasserman 2014)

Core compensation is not the only form of compensation that attracts employees to Google. They offer a wide range of discretionary benefits that aid employees in all aspects of their live. Their discretionary benefits fall into all three categories that characterize discretionary benefits. They provide their employees with protection programs, paid time off and services:

• Health Insurance (Great Places to Work)

• Covers dental, prescription drugs, alternative treatments, vision, mental health, fertility

• Onsite Health Benefits (physicians and nurses)

• Cholesterol tests, flu shots, fitness center, medical facility, blood pressure screening, offsite gym membership

• Retirement (Great Places to Work)

• 401(k)or 403b plan, pretax savings account, deferred profit sharing plan, stock options

• Support for Employee Development (Great Places to Work)

• College tuition reimbursement
• Annual training for full time salaried employees

• Caring and Support (Great Places to Work)

• Employee assistant programs for those who need extra support during hard times
• Support in prepping for parenthood, childcare, and finances
• Time off for new parents plus extra spending money to help them with their new baby

• Fun and Celebrations (Great Places to Work)

• Employee sports teams
• Happy hours (beer on Fridays)
• B-day parties, baby showers and engagement celebrations
• Video game competitions

• Perks (Great Places to Work)

• Free snacks daily
• Free lunches daily
• Free breakfast foods
• Fitness classes
• Personal concierge service
• Massage therapy
• Vehicle maintenance
• Personal travel service
• Free beverages
• Discount ticket sales
• Car wash, hair salon
• Banking
• Public transportation
• Themed events (Googleween)
• Free legal advice
• Donation of vacation time

• Work-life Balance Programs (Great Places to Work)

• Paid vacation (15 days in 1st year)/holidays (13)
• Unpaid sabbaticals
• Lactation rooms for new moms
• Job sharing
• Elder care resources
• Onsite childcare
• Paid time to volunteer
• Adoption benefits

Google also rewards hard work through spot bonuses ranging from $250-$5000. (Great Places to Work) Employees who are selected to receive a bonus are allowed to choose how they want that bonus paid out. The can choose from cash, days off, or items such as gift cards, coupons or tickets to sporting events. (Great Places to Work) They also have peer bonuses that allow employees to nominate fellow employees to receive a bonus of $175. (Great Places to Work) Bonuses are a great way to recognize employee performance, but recognition is just another way Google recognizes company success as well as individual and team work.