PGBM70 Understanding Organisational Performance: Google's Report

This report provides a comprehensive analysis of Google's performance management system, examining its key components and strategies. It begins with an introduction to performance management, defining its importance in optimizing individual and organizational performance. The report then provides a company background, highlighting Google's global presence and employee base. It delves into Google's performance management practices, including its recruitment and selection processes, emphasizing the importance of cultural fit. The core of the report focuses on goal-setting using the OKRs (Objectives and Key Results) system, performance reviews incorporating 360-degree feedback, and performance appraisal methods. The report critically evaluates these methods, offering recommendations for improvement, such as enhancing goal-setting, promoting employee well-being, providing coaching and education, and integrating artificial intelligence. The report concludes by summarizing the effectiveness of Google's performance management system and its impact on employee motivation and organizational success, offering valuable insights for students and professionals interested in human resource management and organizational performance. The report is available on Desklib, a platform providing AI-based study tools for students.

Performance Management at Google
UNDERSTANDING ORGANISATIONAL
PERFORMANCE – 950284
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Performance Management at Google
Table of Contents
Introduction.......................................................................................................................3
Performance Management..........................................................................................................3
Company Background..................................................................................................................3
Performance Management at Google................................................................................4
Goal-Setting at Google.................................................................................................................4
Performance Reviews at Google...................................................................................................6
Performance appraisal.................................................................................................................7
Recommendations for Improving Performance Management at Google............................8
Goal-setting..................................................................................................................................8
Employee well-being....................................................................................................................8
Coaching and educating...............................................................................................................9
Artificial intelligence in performance management....................................................................10
Conclusion.......................................................................................................................10
Bibliography....................................................................................................................12
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Performance Management at Google
Introduction
Performance Management
Performance management is an important core function in human resource management that
helps in optimising the performance levels of individuals in a workplace. Performance
management is defined as a continuous process of identifying, measuring and developing
performance objectives for the employees (Buckingham & Goodall, 2015). Business
organizations can only perform well only if their human resources are able to contribute
towards the achievement of organisational goals and objectives. As a result, they have started
to break down organisational goals and objectives into smaller parts and assign them to
individuals as their performance objectives. By connecting individual performance objectives
with that of the organisational objectives, business organizations are able to motivate their
employees and make them perceive that their efforts are contributing towards the success of
their companies (Noe, et al., 2017).
In this report, we will analyse the performance management system of a business
organisation. The report will discuss all the performance management strategies and systems
that have been implemented by an organisation to ensure high performance amongst its
employees. Further, the report will also discuss certain areas where the selected company can
introduce changes to make its performance management system even better.
Company Background
Google is a multinational technology company that offers internet related products and
services, such as advertising, search engine, cloud computing, e-mail client, etc. It is one of
the big four technology companies alongside Apple, Facebook and Amazon. Google was
officially launched in 1998 by Larry Page and Sergey Brin while they were studying at
Stanford University (SCHNEIDER, 2018). Google is one of the top multinational companies
in the world. It is one of those companies that do not require an introduction because it has a
very strong global presence and no other company has been able to compete with it in the
past few years. According to reports, Google had a total workforce of around 98,771
employees as of the last quadrant of 2018. Google itself is the most visited website in the
world while some its other service offering websites have also been holding positions in the
top 100 most visited websites, such as YouTube and Blogger (Bellis, 2019).
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Performance Management at Google
Google was reported to be the best company to work for in 2007, 2008 and 2012 by the
Fortune magazine. The company has a diverse workforce and is leading the market by setting
examples in the field of human resource management. Some of the principles of the company
like, a person can make money without doing evil, a person can be serious even without
wearing a suit, work should be fun and challenging, etc. (Google, 2010) demonstrate the
ability of the company to manage its human resources as effectively as possible by
implementing the right management strategies and policies.
Performance Management at Google
Performance management is a critical aspect of a business organisation but they are often
considered to be complicated by business organizations because of the time and cost factor
involved. Further, dysfunctionalities in performance management systems can do more harm
to a company than the potential benefits of an effective performance management system.
Therefore, it is important for human resource managers to have a thorough knowledge about
their corporate culture, nature of business and performance objectives, so that they can design
a system that can foster the right performance behaviour amongst the employees. A review of
Google’s performance management system is give below:
At Google, the people operations of the company is dedicated to achieve a highly efficient
pool of employees right from the very beginning. Right from the recruitment and selection
process, the company pays a lot of attention to candidates that have the ability to perform in
the corporate culture of the company (Mello, 2016). The company recruits only the best fit
candidates from top candidates all over the world and to achieve the best results. Even if the
people management of the company is not able to score 100% in its recruitment and selection
process, it still believes in recruiting the best fit only and even passing on a great candidate if
he is not a good fit. Therefore, it is clearly evident that Google’s corporate culture is
completely performance driven and there is no scope for people to work in Google that
cannot fit into the culture of the company.
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Performance Management at Google
Goal-Setting at Google
Goal setting is a key element of a performance management system which allows business
organizations to formulate performance objectives for their employees. Business
organizations should ensure that the goals formulated for their employees are in alignment
with the overall organisational goals and objectives so that the employees feel that they are
contributing towards the success of their organisation (Lunenburg, 2011). Further, it is also
important to have realistic goals that are acceptable to the employees so that they feel
motivated to work for the achievement of the performance goals set up for them. It was only
after the introduction of Management by Objectives concept by Peter Drucker in the 1950s
that business organizations started to set performance goals for their employees. Peter
Drucker, Taylor, Ford, all the gurus of the management world had, in some way or the other,
stressed upon the importance of formulating performance goals and objectives in order to
keep the employees motivated. This is one of the prime reasons that almost all Fortune 500
companies, spread throughout the globe, are formulating performance objectives for their
employees using their own policies and strategies.
At Google, goal-setting is one of its own kind. Google has adapted a system of OKRs, which
are an old staple of business management. OKRs stand for Objectives and Key Results.
OKRs have been rebranded and repurposed by a number of modern business organizations to
make them more effective in the 21st century. The concept of OKRs was introduced by Andy
Grove, who was a co-founder of Intel. Andy Grove suggested that in order to ensure high
performance in the workplace, there should be certain key results formulated in the
organisation, which were to be obtained by breaking down an organisation’s yearly goals and
objectives into monthly or quarterly short term goals (Niven & Lamorte, 2016). These key
results were to be considered as important milestones in the path to achieve organisational
goals and objectives. Andy also suggested that the process of formulating performance
objectives was to be implemented as a bottom to top approach so that the employees play an
important role in formulating their own objectives and are involved and empowered in the
process (Wodtke, 2016).
Google took up the concept of OKRs from Andy Grove and customised it to suit its business
needs and industrial environment in which it operates. It still sticks to a bottom to top
approach for formulating performance objectives but has made the process quicker by
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Performance Management at Google
requiring its workforce to formulate objectives and key results every quarter (Qulture, 2019).
At Google, the employees set OKRs by themselves and make them public to their co-workers
through the internet of the company. In order to ensure that the employees formulate efficient
and competitive goals, the company provides a mix of supervisor oversight and pressure from
peers to the employees (Klau, 2013). Further, the company also works towards fostering a
workplace environment that helps in developing a strong psychology amongst the employees
to develop competitive objectives and key results that are in alignment with the
organisational goals and objectives.
Performance Reviews at Google
Performance review is one of the most important key elements of a performance management
system. It is defined as a formal assessment which allows a manager to evaluate the
performance level of an employee over a specific period of time. Based on a performance
review, a manager is able to identify the weaknesses and strengths of his employees and set
performance objectives for future (Murphy, 2018).
Performance reviews are carefully carried out at Google and its annual performance reviews
comprise of two different parts. The first review is known as a preview, which takes place at
the end of the first semester while the second review is a complete review that takes place at
the end of an assessment year. The company has established a system of 360-degree feedback
collection process for the purpose of reviewing the performance of its employees. In the
performance review technique of the company, there are two main things considered by the
managers i.e. the accomplishments of the employees and how they have achieved the results.
Further, the performance reviews start with the employees providing a self-assessment on
their own performance levels, which is then followed by a 360-degree appraisal where peers,
juniors and the seniors of an employee review the performance of each employee (Campion,
et al., 2015). In the self-assessment review, an employee is asked to evaluate himself on a
five scale rating and share examples in support of the rating given. Since 2014, Google has
abolished numerical ratings in its performance management system and its employees are
rated on a five point scale that ranges from ‘needs improvement’ to ‘superb’. In the last
section of self-assessment, employees are asked to write about their accomplishments in not
more than 512 characters, which is then passed on to the reviewers during 360-degree
feedback. The peers selected for an employee’s 360-degree feedback are selected fairly so
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Performance Management at Google
that there is no biasness in the process. A list of peers is shared by an employee with his
manager by counting in the closeness with which the peer has worked with the employee and
will be able to accurately rate his or her performance.
The peers are then expected to assess the performance of an employee in three different
media i.e. strengths (things that the employee should carry on to do), weaknesses (things that
the employee should consider working upon) and the contribution of the employee towards
specific projects. All the information from self-assessment and 360-degree feedback is then
gathered by the managers, who then develop a draft rating for each of the employee on the
same five scale rating i.e. needs improvement, consistently meets expectations, exceeds
expectations, strongly exceeds expectations and superb (Taylor, 2015). The strength of the
company’s performance reviews lies in its ability to calibrate the results obtained from the
self-assessment and 360 degree feedback to achieve a reliable and accurate performance
review of its employees.
Performance appraisal
Google, without a doubt, has been setting examples for business organizations in the field of
goal setting and performance reviews. Even in the field of performance appraisal, Google has
its own policies and strategies, which are having a huge impact on employee motivation
levels.
According to research carried out by Edward L. Deci, a Professor of Psychology at the
University of Rochester, external rewards such as money, could lead to a decrease in
motivation amongst the employees whereas internal rewards, such as verbal reinforcements
and positive feedbacks, could increase the level of motivation amongst the employees. This is
exactly what the management at Google believes. At Google, annual performance reviews
and pay discussions are both held separately after a gap of one month. The people
management of the company believes that performance reviews are conducted because the
employees want to contribute more towards their organisation and not to earn a higher salary.
Moreover, the employees have a need to grow and develop and it’s an important job of the
employer to help them achieve it (Lebowtiz, 2015). Therefore, salary discussions are
conducted separately at Google, which makes the employees feel that performance reviews
are conducted to help their company in developing and growing and not just for them to earn
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Performance Management at Google
more money. As a result, formulating strong objectives through OKRs, having the right
performance reviewing policies and strategies and motivating their staff through the right
internal incentives has really helped Google in developing its people, which is a prime reason
that the company is a preferred employer to work for in the global market.
Recommendations for Improving Performance Management at
Google
Google, without a doubt, has been outperforming all of its competitors in the global market.
The success of the company can be attributed to the effectiveness of its current performance
management system, which can be validated by the fact that the average Google employee
generates an annual revenue upwards of $1.2 million while Yahoo stands at $449,000 and
Microsoft at $783,000 (Maier, 2017). Google is a company that has been leading the global
market in terms of operations, processes as well management of human resources, which
leaves little scope for improvement in the processes of the company. Even then, there can be
certain areas where the performance management of the company can be improved. These
areas are discussed below:
Goal-setting
Goal setting is an important part of a performance management system as it provides a
direction for action to the employees. There are certain areas where Google can make
improvements to its goal setting procedures or OKRs. The company has been believing in a
bottom to top approach of setting goals and respective key results by empowering the
employees. The company ensures that these goals are competitive by ensuring supervision
and a competitive culture. A change that can be introduced in the goal setting strategy is that
the top level management of the company can formulate an annual or a semi-annual objective
for the entire organisation. This goal can then be shared with different departments and all of
the workforce (Paychex, 2018). The workforce can then be empowered to use the
organisational goal to establish OKRs for themselves, which can then be validated by their
managers. This is important because not all employees working in a company can be high-
performers. There can be people who might be low on motivation and can formulate goals for
themselves that are not competitive enough. Further, providing the workforce with a set
organisational goal will provide them with a direction in which they have to work.
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Performance Management at Google
Empowering them to create their own goals in accordance with the set goal will empower
them and they would feel more accountable and responsible for achieving their own goals.
Employee well-being
Employee well-being is an important aspect of human resource management that aims at
improving the work conditions for the employees. Ensuring well-being of the employees can
help an organisation in increasing their job satisfaction level and can also be helpful in
developing strong psychological contracts. Another important element that Google can attach
to its performance management system is a survey feedback questionnaire that would be
aimed at gathering information about employee well-being issues and the barriers that the
employees might be encountering in their day-to-day operations (Haddon, 2018). This would
also help the management in knowing if there are certain barriers that are restricting the
workforce from achieving their performance objectives. Employee well-being surveys will
also make the employees perceive that the company values their association and is dedicated
to offer them a positive work environment.
Employees, in the modern business world, are becoming increasingly aware about their own
well-being and are demanding flexibility from their employers so that they can enjoy their
work life as well as give time to their families and personal obligations. Business
organizations are investing heavily in their human resources and are expecting high returns
on their investment. This can lead to stress and anxiety amongst the employees, who are
required to perform in order to keep their jobs secured. Stress and anxiety can further lead to
reduced motivation and performance amongst the employees (Hearn, 2018). Therefore,
employee well-being is an important human resource management issue that needs to become
a part of Google’s performance discussions.
Coaching and educating
Coaching and education should also be made a part of performance management system.
Performance management should not just be about reviews and appraisals, it is also important
for a company like Google to provide all resources necessary to its employees for achieving
their performance objectives. There can be cases where the employees are not able to meet
their performance objectives, which can have a huge impact on the motivation levels and
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Performance Management at Google
morale of the employees. In such instances, coaching and education the employees becomes
necessary on the part of the company.
Through coaching and educating, Google can assign a manager to the underperforming
employees. The manager can get to know the employees and get their feedback on the
problems that they faced in achieving their performance objectives (Kumar, 2018). The
manager should then analyse if the performance objectives of an employee were unrealistic
and can be amended to make them more realistic or if an employee needs to undergo a
training or a development program in order to become more competitive to achieve his or her
performance objectives. As performance management is also about bringing about an overall
development of an organisation, it is important to increase the competencies of the employees
on the basis of the results of a performance management system.
Artificial intelligence in performance management
Artificial intelligence is the use of information systems, hardware and software in the
decision making process. Artificial intelligence makes use of machine learning and evolving
to help business organizations in decision making processes in specific areas. The use of
artificial intelligence in the field of performance management is a new concept that has not
become much common in the modern day business world.
Artificial intelligence can be used by technology giants like Google to cover a number of
aspects of performance management and human resource management as well. A key area
where business organizations can use artificial intelligence is in performance reviews. Work
Compass is a UK based company that has already started using artificial intelligence and
machine learning to analyse the goals of their employees. Through the use of artificial
intelligence, the company has already registered an average of 11.4% increase in employee
productivity. Artificial Intelligence can be used to identify areas where the performance of
the company or of one of its department is not up to the mark (Aggarwal, 2018).
Consequently, a company can work on those areas to achieve its performance objectives.
Further, artificial intelligence can also be used to assign weightage to the performance
objectives that have been formulated for the company on the whole and for the employees as
well, which can then be used to measure the progress (Bell, 2017).
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Performance Management at Google
Conclusion
Google, beyond a doubt, is one multinational company that has been setting trends for other
business organizations in each and every field. Be it technology, innovation, service and
product qualities or the management of human resources, Google has developed competitive
strategies which are helping business organizations throughout the world in strengthening
their own procedures and policies.
The performance management system of the company is one of the most competitive models
that is being used by business organizations in the modern world. It is not only directing the
workforce at Google in the right direction but is also ensuring a positive work culture and
high levels of job engagement and motivation amongst the employees. As there is always a
scope for improvement, Google can introduce certain changes in its performance
management system to keep up with the market trend. Artificial intelligence is one area
where the company can work harder to make its performance management system more
effective. Further, the company also needs to include employee well-being and employee
coaching and education in its performance management system to ensure an overall
development of its workforce in the longer run.
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