Wednesday, September 27, 2006

Management and incentives at Google

Googler Steve Yegge has some interesting tidbits on Google's management buried in one of his posts. Some extended excerpts:
Google's process probably does look like chaos ...

What's to stop engineers from leaving all the trouble projects, leaving behind bug-ridden operational nightmares? What keeps engineers working towards the corporate goals if they can work on whatever they want? How do the most important projects get staffed appropriately?

Google drives behavior through incentives. Engineers working on important projects are, on average, rewarded more than those on less-important projects. You can choose to work on a far-fetched research-y kind of project that may never be practical to anyone, but the work will have to be a reward unto itself. If it turns out you were right and everyone else was wrong (the startup's dream), and your little project turns out to be tremendously impactful, then you'll be rewarded for it. Guaranteed.

The rewards and incentives are too numerous to talk about here, but the financial incentives range from gift certificates and massage coupons up through giant bonuses and stock grants, where I won't define "giant" precisely, but think of Google's scale and let your imagination run a bit wild, and you probably won't miss the mark by much.

Google a peer-review oriented culture, and earning the respect of your peers means a lot there. More than it does at other places, I think. This is in part because it's just the way the culture works; it's something that was put in place early on and has managed to become habitual. It's also true because your peers are so damn smart that earning their respect is a huge deal.

Another incentive is that every quarter, without fail, they have a long all-hands in which they show every single project that launched to everyone, and put up the names and faces of the teams (always small) who launched each one, and everyone applauds. Gives me a tingle just to think about it. Google takes launching very seriously, and I think that being recognized for launching something cool might be the strongest incentive across the company.

The perks are over the top, and the rewards are over the top, and everything there is so comically over the top that you have no choice, as an outsider, but to assume that everything the recruiter is telling you is a baldfaced lie, because there's no possible way a company could be that generous to all of its employees.

The thing that drives the right behavior at Google, more than anything else, more than all the other things combined, is gratitude. You can't help but want to do your absolute best for Google; you feel like you owe it to them for taking such incredibly good care of you.
Beautiful. I love it. I wish I had been able to push things further in this direction when I was at Amazon.

On Steve's comments about gratitude, see also my earlier post, "Free food at Google", where I said, "Perks can be seen as a gift exchange, having an impact on morale and motivation disproportionate to their cost."

For an interesting comparison to Microsoft, see my July 2004 post, "Microsoft cuts benefits". After the predictable drop in morale and loss of key people from cutting benefits, Microsoft reversed their policy, which I described in my May 2006 post, "Microsoft drops forced rank, increases benefits".

See also some of my other posts about Google's management structure, "First, kill all the managers" and "Google's rules of management".

For a comparison to Amazon, I have a couple posts on their management practices, one critical of "two pizza teams" and one praising some of Amazon's non-monetary rewards.

Update: Dare Obasanjo at Microsoft has a quite different take on all of this: "A company pays you at worst 'what they think they can get away with' and at best 'what they think you are worth', neither of these should inspire gratitude."


jeremy said...

Google drives behavior through incentives. Engineers working on important projects are, on average, rewarded more than those on less-important projects.

Any idea on what constitutes important projects? Is Gmail more important than Calendar? Is image search more important than blog search?

Or is importance determined by how much money gets moved? For example, since Adworse/Sense brings in 98% of the revenue, and Google Search Appliance the other 2%, does someone working on Adsense receive 49x the reward of someone working on Google Enterprise Search?

Matt Cutts said...

jeremy, in my opinion, Google does well enough on monetization that individual projects don't have to obsess about monetization. Which is good: it frees up people to work on something because it's cool (e.g. Maps), not because it will make a ton of money.

jeremy said...

Matt: I wasn't completely serious when I gave the monetization example. Of course it wouldn't really work the way I proposed.. because as you say you have lots of cool projects with no monetization at all.

But my original question remains: What constitues an important project? Is it the coolness factor? The cooler it is, the more important it is? Actually, I've heard slip from a Google Engineer that the more "used" something is, the more brownie points they are awarded. Is that what constitutes "important"? User usage of a Google product?

And if so, what does that mean for someone working on a search vertical, such as blogs or images or whatever? What if the size of that particular vertical market is just smaller than another vertical? Less user usage, not because of engineer talent, but because it is just a smaller vertical. Are people unequally rewarded, then?

Otis Gospodnetic said...

jeremy: isn't that always the case?
As for size of the vertical, I think it's about the relative size, or at least that is how I would look at success of a project.

jeremy said...

Otis: Isn't what always the case? The fact that people are rewarded unequally? Yes, yes, of course. But then, Yegge's whole post was about incentives. If everything at Google is so open and groovy, and I can see someone else doing half as much work as me, but getting rewarded twice as much, because he happens to work on maps and I work on blog search, that is very disheartening. That is actually a disincentive for me.. I would want to quit working on blog search, and go join the maps team.. as Yegge says anyone is free to do at any time. Why would I bother staying where I am not getting equally compensated for my effort.. and have the chance to change that?

And yes, I see what you are saying about relative size. But then the question arises: Is a project smaller, because the market is smaller for that project? Or because the engineers on that team are not doing good enough work to grow that market? It seems like it is up to the capriciousness and prejudices of one's manager to interpret that.

Which is again always the case, just like everywhere else.

But if it's just like everywhere else, why bother? Why tell us about all these fantastic Google incentives, if they're all just illusions?

Google likes to brag about how opinions never enter into the equation, how Googlers just go to the numbers, and prove their point with the numbers. But like I said, if the numbers are small, what does that say? Does it say small market? Or crappy engineers? The numbers support both hypotheses.

I still would honestly like to hear, from a Googler, what makes a Google project "important".

Anonymous said...

This latest fluff from Yegge is hilarious, and reminds me of the nearly identical self-serving BS that came out of GE and Microsoft about their vaunted hiring and management practices in the past. Reminds me of Joel on Software, too. Lots of talk, little evidence, and mostly a result of post hoc reasoning.

When things go bad in these companies (and they will), somehow their vaunted corporate culture (with issues like the ones jeremy mentions) helps them out. For example, after Microsoft hit the 25 year mark things went downhill, and we've all read mini-msft, so we can pretty much discount anything microsoft says about how good their hiring practices and corporate culture are.

Google similarly claims a lot of stuff right now, but the truth is that most of their employee retention and morale is due to employees waiting to vest or expecting to be rich. The rest is corporate fluff. You worked at amazon, don't you remember how the "tone" changed when the company started having trouble and the layoffs started? What happened to the great corporate culture then? And I haven't seen any evidence the "two-pizza teams" have magically done anything good for amazon, have you?

Get back to me when google's been around, and been successful for 30 or 40 years. Or show me what J&J or General Mills are doing to keep employees - those are the models. Until then, don't believe the hype.