Google's 10% Raise: We Don't Care About Our Employees

Last Updated Nov 10, 2010 3:12 PM EST

Do you know how easy it is to give everyone in the company a 10% increase? It's simple. First, you run a list of everyone's salaries, and then you run an update query. Do a little rounding so pay periods make sense and then upload the new file. Ta-da! Finished.

If that first paragraph didn't bore you to death, you're probably wondering what on earth I'm talking about. My BNET colleage, Erik Sherman has the details and background behind Google's newly announced 10% across the board increase. Of course, we're all saying, "Gee, I'd love a 10% increase." I mean, we may talk about personal fulfillment and blah, blah, blah, but I've never had anyone turn down a raise.

But, why aren't I singing Google's praises? Because this type of increase actually shows how little they value their employees. Oh, I know, they think it shows the opposite. But, the truth is, if you want good employees, you need to value them differently.

Why? Because your low performers now feel justified in their slacker attitudes--"hey, I've been playing Farmville all day and I still got a 10 percent increase! Yippee!" And your high performers now feel like the received a lousy raise and are now going to be less satisfied with their salaries then they were before. Honest. You've just shown them you value them exactly the same as the low performers.

And if you truly are a high performer, you won't turn the raise down (because you're not stupid), but you won't pull your resume out of consideration at Facebook either. In fact, your bargaining power at the competitors just increased because you're walking in with a higher base salary. (And for many stupid reasons, companies like to base new hire salaries on the candidate's previous salary.)

The Wall Street Journal had an interesting tidbit at the end of it's article on this: Google has tried throwing money at employees before and (drum roll please), it obviously hasn't fixed the problem.
The raise isn't the first time Google has taken steps to retain employees. In 2009, it repriced millions of employee stock options whose value had been wiped out as Google's share price fell between 2007 and 2009
Just in case you're still suffering from a post-Halloween sugar hangover and you've forgotten the year, it's 2010. That means that last year they repriced stock options and yet employees are still leaving.
In a 2007/2008 survey, 17% of employees said they left their jobs because of lack of recognition. Those were better economic times, granted, but it appears to be great economic times for people with the skills that Google and Facebook are fighting over. It's not low pay, it's low recognition.
These things are not the same thing. In fact, they are very different. Giving everyone an identical raise (even if it is a big one) just gives further evidence that managers (especially senior managers, who made this decision) don't care enough about their employees to look at and evaluate their work and their value to the company.

I predict, Google's problems are not over.

Illustration by Bramus!, Flickr cc 2.0

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