is one of the most important issues in the modern corporations. In order to
increase employees’ productivity employers are trying to achieve an incentive
effect. Incentive effect is workers’ willingness to work hard and as a result
production of greater output (Martocchio, p.56). Employers motivate their team
in many different ways, but one of the most productive ways remains the
distribution of the financial benefits.
incentive plans are based on rewarding employees for the profits they create
for the company. This is an efficient system, since each employee is trying to
generate more profits, and their rewards are paid for by the profits the
employee created. However, it is not always easy to measure the performance and
the output created by each employee. The team performance-based compensation
might lead to cooperation between employees, but also discourage them trying
their best since their efforts are not the only factor, which influences their
payment (McQuerrey, 2014). Therefore, the Google came up with a new scheme to
creates an incentive effect by providing an infrastructure for their employees
within the company to give them a career opportunity and a way to enjoy the
workdays so that they stay productive throughout the entire day. The incentive
effect depends on more than just the amount of the cash payment the employee
receives at the end of the month. But it is important to think this reward
through (Singh & Negin, 2015). Otherwise, it may have an adverse effect instead.
already uses multiple incentive tools to achieve the desired effect, including
free food support, extended pregnancy leave and bonus for a child. Employees
have extra bonuses, such as massages, day-care, and taxi (D’Onfro &
England, 2015). Google promotes on their
career page their company on labor markets suggesting such incentives as death
benefits, health insurance and financial and career coaching (Google, 2017).
Therefore, employees are motivated to stay in the company, which simultaneously
decreases employee turnover costs and allows Google to pay their employees’
develops the infrastructure for its workers, building gyms in the office and
allowing pets to the workplaces. Employees even get free soft alcoholic drinks
of Fridays, which is supposed to create a great corporate culture and
additional incentive for employees to contribute their best effort to the
development of the company (Cain, 2017). Google tries to distribute their
benefits to all employees fairly by creating an atmosphere that provides a
productive and fun environment for everyone. Not a single area of the office is
located farther than 150 feet from a place with food, which makes it easier to
snack often and even meet up with members of other teams there (Luenendock,
2014). The transparency of all the processes, frequent surveys and efforts to
fix the problems boosts the productivity of all employees (Luenendock, 2014).
The corporate culture creates the feeling of a friendly atmosphere and
employees are satisfied with their lives, which allows them to contribute more
efforts to their professional tasks, rather than personal issues.
employees are devastated by the events of their daily lives, such as diseases
or deaths of the family member, car accidents or property losses, their
productivity greatly decreases (Markland, 2017). This is especially true for
the creative jobs. If the company does not help the employees in such
situations, the project, on which the employee is working might cause more
losses, than the expenses connected to helping the employee. Therefore, it is a
good idea to diversify the benefits package.
money matters remain very important. The key to the success of the benefits
distribution to the company was not so much how fairly they divided those
benefits, but the fact that Google chooses to distribute benefits unfairly.
Lazslo Bock in his book mentioned that the key to keeping the most talented
employees from leaving the workplace and to keep everyone else focused on the
success is by paying more successful and potentially more beneficial employees
larger salaries than their less creative colleagues (2015, p. 189). Yet other employees
do not get discouraged enough to leave their workplace, because the corporate
culture encourages the celebration of achievement, not compensation (Bock,
2015, p. 190).
Google was going public, they offered employees a choice of receiving their
salaries fully in monetary form or partially in stocks (Edwards, 2011, p. 64).
This is how the company encourages their workers to nowadays. Receiving large
salaries today is important, but financial stability, career and the growth of
the company’s profits (and employee’s own one accordingly) could be much better
drivers for the productivity.
Google is known as one of the best employers in the world and the company
encourages 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 paychecks
might vary greatly. In order to achieve the incentive effect in full, it is
worth considering ensuring that the remuneration and bonus system is clear to
all employees so that everyone knows what to do in order to improve their input
to the company and that way achieve a higher income. The company invests a lot
in each employee and it is important to communicate what they receive for their
hard work and dedication. Therefore, the incentive effect, which already exists
in Google Inc, could be increased by small enhancements.