Productivityis one of the most important issues in the modern corporations. In order toincrease employees’ productivity employers are trying to achieve an incentiveeffect. Incentive effect is workers’ willingness to work hard and as a resultproduction of greater output (Martocchio, p.56). Employers motivate their teamin many different ways, but one of the most productive ways remains thedistribution of the financial benefits. Mostincentive plans are based on rewarding employees for the profits they createfor the company. This is an efficient system, since each employee is trying togenerate more profits, and their rewards are paid for by the profits theemployee created. However, it is not always easy to measure the performance andthe output created by each employee.
The team performance-based compensationmight lead to cooperation between employees, but also discourage them tryingtheir best since their efforts are not the only factor, which influences theirpayment (McQuerrey, 2014). Therefore, the Google came up with a new scheme toencourage employees. Googlecreates an incentive effect by providing an infrastructure for their employeeswithin the company to give them a career opportunity and a way to enjoy theworkdays so that they stay productive throughout the entire day. The incentiveeffect depends on more than just the amount of the cash payment the employeereceives at the end of the month. But it is important to think this rewardthrough (Singh & Negin, 2015). Otherwise, it may have an adverse effect instead. Googlealready uses multiple incentive tools to achieve the desired effect, includingfree food support, extended pregnancy leave and bonus for a child.
Employeeshave extra bonuses, such as massages, day-care, and taxi (D’Onfro , 2015). Google promotes on theircareer page their company on labor markets suggesting such incentives as deathbenefits, health insurance and financial and career coaching (Google, 2017).Therefore, employees are motivated to stay in the company, which simultaneouslydecreases employee turnover costs and allows Google to pay their employees’less.Googledevelops the infrastructure for its workers, building gyms in the office andallowing pets to the workplaces. Employees even get free soft alcoholic drinksof Fridays, which is supposed to create a great corporate culture andadditional incentive for employees to contribute their best effort to thedevelopment of the company (Cain, 2017). Google tries to distribute theirbenefits to all employees fairly by creating an atmosphere that provides aproductive and fun environment for everyone. Not a single area of the office islocated farther than 150 feet from a place with food, which makes it easier tosnack often and even meet up with members of other teams there (Luenendock,2014).
The transparency of all the processes, frequent surveys and efforts tofix the problems boosts the productivity of all employees (Luenendock, 2014).The corporate culture creates the feeling of a friendly atmosphere andemployees are satisfied with their lives, which allows them to contribute moreefforts to their professional tasks, rather than personal issues. Whenemployees are devastated by the events of their daily lives, such as diseasesor deaths of the family member, car accidents or property losses, theirproductivity greatly decreases (Markland, 2017). This is especially true forthe creative jobs.
If the company does not help the employees in suchsituations, the project, on which the employee is working might cause morelosses, than the expenses connected to helping the employee. Therefore, it is agood idea to diversify the benefits package. Nevertheless,money matters remain very important.
The key to the success of the benefitsdistribution to the company was not so much how fairly they divided thosebenefits, but the fact that Google chooses to distribute benefits unfairly.Lazslo Bock in his book mentioned that the key to keeping the most talentedemployees from leaving the workplace and to keep everyone else focused on thesuccess is by paying more successful and potentially more beneficial employeeslarger salaries than their less creative colleagues (2015, p. 189). Yet other employeesdo not get discouraged enough to leave their workplace, because the corporateculture encourages the celebration of achievement, not compensation (Bock,2015, p. 190).
When theGoogle was going public, they offered employees a choice of receiving theirsalaries fully in monetary form or partially in stocks (Edwards, 2011, p. 64).This is how the company encourages their workers to nowadays. Receiving largesalaries today is important, but financial stability, career and the growth ofthe company’s profits (and employee’s own one accordingly) could be much betterdrivers for the productivity. AlthoughGoogle is known as one of the best employers in the world and the companyencourages innovation not only in their products but also in work processes,the fair distribution only partially describes the system used by the company.
Google provides great support for their workers’ aspiration, but the paychecksmight vary greatly. In order to achieve the incentive effect in full, it isworth considering ensuring that the remuneration and bonus system is clear toall employees so that everyone knows what to do in order to improve their inputto the company and that way achieve a higher income. The company invests a lotin each employee and it is important to communicate what they receive for theirhard work and dedication. Therefore, the incentive effect, which already existsin Google Inc, could be increased by small enhancements.