Role of HRM for Organizational Success
Cunha, Morgado & Brewster (2003) and Bonavia and Marin-Garcia (2011) conducted separate studies regarding the impact of HRM on organizational performance through testing model of structural equation based on the data of huge European business firms and identified that HRM has a greater impact on the overall organizational performance by influencing competitive strength, innovation, industrial charisma, and by attaining strategic goals.
Redman and Wilkinson (2005) noted that several manufacturing businesses throughout the world tried to identify the effects of HR management on productivity outcomes, and found that strategic management of the companies which pay attention to train employees, motivate them with organizational objectives, and ensure improved employment security, have higher productivity than that of the companies which pay for performance system.
Beardwell and Claydon (2007) pointed out that strategic management, by its direct or indirect action can largely influence the human resource management practices in every organization to provide flexibility of HR practices, and conduct performance management towards the positive changes of the organizational performance by providing training, learning, and skill development that would ultimately increase overall productivity. This paper has aimed to investigate with the contribution of human resource management at Google Inc and critically analyze the process of employee relations and employee reward at Google in this regard.
The Contribution of HRM to the Success of Google Inc
Bhatia et al. (2012) pointed out that the search engine giant Google Inc was founded by Larry Page and Sergey Brin in 1988 headquartered in California and grown quickly than the competitors with 572.11% market share while the other search engines like Yahoo gained 17.04%, MSN attains 5.56% and Ask represents 3.74%, of the US market surveyed in 2009. The core competence for such gigantic success underlies on the most innovative business model that Google put into practice in the market segment of hardware, software, advertising, telecommunication, publication, news, and entertainment, with vast market capitalisation while the human resource management of Google has kept tremendous contribution to its success with new approach to leadership, culture diversity, and employee benefits.
Byrne (2011) mentioned that human resource at Google always offered greater insights with advanced innovation through its data-driven HR process where every decision of the individuals are assessed through data and analytics complying with the recruitment, compensation, talent management process of the company that contributed human resource to turn into the key factor of future success of the Google. From the organizational viewpoint, with 53,861 staff and continuous process of new hiring, HR is the most significant subject matter for Google, but the real scenario is that the engineering roots of the company don’t consider HR with extra ordinary importance then the other departments rather people to produce data to implementing decisions and policies by generating people-analytics team.
The team consists with huge number of data miners, psychologists and business graduates jointly introduced ‘Project Oxygen’ dedicated to establish better boss by pointing to the attributes that make a good manager at Google and it is a different situation than the traditional managers and employees alignment. In the conventional system, the mangers determine the fate of the employees, but under ‘Project Oxygen’, employees re-evaluate their bosses to find out the considerable distinction between the best and worst managers, at the same time, the analytics team identifies that the best boos may not be a micromanage, but attain clear vision of the team and organization.
It is highly essential to note the fact that the success of Google today has resulted from the hard works and the contributions of the human resources that it has appointed and trained so far. There is no doubt that with 53,861 skilled employees around the world, the business has been able to attain unbounded success from all spheres of its operations. However, a number of contributions of HRM in the success of Google are noted below:
- Cook (2012) has pointed out that this business has been positioned amongst the best brands internationally (the brand was valued at 100 billion, for the first time on earth); in addition, the firm has made ninety seven percent of income from advertising
- According to Cook (2012), the firm has got a position amongst the best five firms through offering pioneering progression, suppleness, as well as the chance to chase inspirations, which confronted with the eminence standards of the industry’s practices and smashed all the pre established hypotheses
- It is notable that even in the face of disappointing global financial crisis all around the world, this firm had made a profit of 21795 million US dollars in 2008, which was actually a rise of about thirty-one percent form the previous year
- On the other hand, Cook (2012) has also pointed out that the firm had made a profit of 209624 US dollars for contributions made per worker during the recessionary year; moreover, this was the best performance that year, as it was able to put behind many other giants in the same industry, such as Intel, IBM, Apple, and Microsoft.
Employee Reward System at Google
Smith (2013) has beautifully identified a number of different factors that made this company one of the best performers all around the world in terms of rewarding employees and satisfying them. It is highly crucial to note the fact that this global search giant has succeeded to achieve such groundbreaking success only by building and maintaining a very interesting reward system. To be very specific, the reward system that is designated by this company focuses to encourage and engage the workers by a number of varied, exciting, stimulating, motivating, and inspiring ideas.
Smith (2013) has also pointed out that the jobs that are offered at this company are significant among those that are one of the most desired works after place of the whole technological market; moreover, the workers here do not have to worry much rather then their work because the company suggests that the benefits assure that workers stay contented. The most remarkable ideas of the reward system through which the company maintains its workforce are briefly outlined in the table below for convenience:
|Employee Reward System at Google Inc|
|Rewards offered||Features of the reward that the employees like the most|
|Great health lessons, gymnasiums, as well as structured sports education without any charge||According to Redman & Wilkinson (2005), some workers feel that the regular exercises, free sporting activities, as well as bathing facilities assist them to refresh and recharge themselves to work for late hours. Others argued that all these offered facilities aid them to get energy to carry on stressful works as well as providing them with fresh ideas for innovative projects. A number of other workers stated that all these facilities give them with a chance to come out and wander around, assisting them to lessen a great deal of uneasiness that are assembled from being stuck at the workplace; moreover, they also suggested that these rewards help them to concentrate at job and feel comfy for the whole day.|
|Workers of the company can get free cars as well as free gourmand foodstuff and refreshments continuously during the working hour||The workers can get vehicles without any charge, which helps them a lot during regular tours and emergency state of affairs. In addition, the workers are also satisfied with their jobs here in this company due to the reason that they are better fed here than any other companies; to be precise; they obtain free breakfast and lunch along with free dinner, where as the working sites also possess numerous squash and coffee saloons spread all around. A worker in this company noted that he likes the refreshment reward as it avoids waste of valuable time, labour, and cash, as well as constructing relations and connections with his workmates; on the other hand, another worker noted that she likes to begin her day at food saloon in the company with permanent barista who would prepare anything requested.|
|The company bothers regarding the workers’ overall happiness||The worker can also enjoy massage rewards for a marvellously performed task on any projects; it is notable that the massage rewards could be released for a free hour on the work site; apart from free massages, one worker shared one of her painful stories, while she suffered a wound and was required to carry out numerous surgeries and check-ups. The treatment was very complex, which aggregately made her to give absences for about half a year; however, starting from the executives and co-workers, to the whole business remained highly understanding for her and supported her to focus on recovering; moreover, after joining back, the bosses cheered her up enabling her to gear up speedily.|
|Workers are granted with a day each week to cheer up and enjoy||According to Smith (2013), it is notable to state that most of the workers noted that each Friday they get a chance to relax and meet people with free cocktail and hard drink. This is not only helpful for workers in terms of assuring them that they are human beings and not machines, but also in sense that it gives them with a huge amount of contentment as they are able to meet new people to make new friends.|
Table 1: Employee Reward System at Google Inc.
However, the company possesses a range of other reward systems as well, by which it inspires its workforce; these are shown in the table below:
|Other Reward Systems at Google Inc|
|Rewards offered||Features of the reward that the employees like the most|
|Parenthood holiday for new mothers and fathers together with an additional benefit||It is arguable that even though it is characteristic for new mothers to recover and join the work for about one and half a month subsequent to giving birth to a baby, at this company, however, the new father obtains paid vacation for the same number of days, whereas the new mothers can get holiday for about five months. Most importantly, the workers can constantly get bonuses whilst they are enjoying holidays; new parents working at the company explained that they get a reward known as “baby-bonding-bucks” subsequent to giving birth to assist with costs such as treatment and necessary material for the baby; in addition, as soon as the mothers get back, babies get free daycares too.|
|The company helps the human resources to fulfil their everyday needs by offering small sized rewards||It is highly important for firms to motivate and engage people towards their works, but assuring at the same time that the processes are cost effective and the motivational tools used are effectual. As a result, with this view, the firm has designed some small reward package to inspire the human resources by means of giving some little, but crucial helps. Redman & Wilkinson (2005) noted that in order to fulfil their everyday needs the company helps the human resources by offering small sized rewards to them, which, for example, includes fuel charges, dry cleaning and adjustments, vehicle cleansing, hired Digital Versatile Disc, Automated Teller Machine and credit union facilities, motorbike maintenance, hairstyling, as well as laundry facilities and so on.|
|Substantial reimbursements are given if a worker passes away||Cook (2012) noted that upon the loss of a worker, full amount of his reserves and the possession are instantly allotted to his trustworthy person, together with the life assurance payment; moreover, his existing partner would constantly obtain part of the wages for the upcoming decade; in addition, any child of that worker would get a thousand per month complementarily.|
|The company allows the workers with a great deal of time tofollow their passions||Apart from the range of vacations, the vacation packages provide employees with additional opportunities to discover life beyond of the scope of workspace; as a result, they could enjoy about 90 days unpaid vacation in certain situations; however, the company carries on to provide fitness benefits for that period; moreover, the workers may participate in any projects at that time.|
Table 2: Other Reward Systems at Google Inc.
Importance of Human Resource Management in a Business
It is highly essential for the senior management team of Google Inc to understand and appreciate the importance of human resource management in the business’s success and focus on better handling the workforce. As a result, it is significant to outline the key importance of human resource management in business so that the top leaders of the company can assess the relevant hypothesis and undertake apt actions where necessary:
- Redman and Wilkinson (2005) and Arthur (2004) pointed out that HRM helps escalating workers’ fidelity and resultantly broadens worker conservation
- As per Beardwell and Claydon (2007), proper HRM practices ensure graceful response to communal, monetary, environmental, certified, and systematic dealings
- Moreover, Bratton (2002) noted that it assists to get more power over diminutive, assorted, or mass markets
- According to Budhwar and Aryee (2008), it helps MNCs like Google to permeate prolifically at all-encompassing markets as well
- On the other hand, Beardwell and Claydon (2007) noted that suitable HRM practices helps firms to remain further habituated to unexpected and astonishing alterations within the corporate world
- Beardwell and Claydon (2007) and Redman and Wilkinson (2005) also suggested that it aids to clutch fluctuating buyer choices adeptly
- According to Banfield and Kay (2012) and Hollenbeck, Gerhart & Noe (2012), through apt management of HR, firms can get enough capable to change quickly with global financial downturns and take proper decisions promptly.
Theoretical Framework of Employee Relations
As per the assertion of Beardwell and Claydon (2007), there are numerous studies to develop a conceptual framework on human resource management and employee relations; however, these need more development, as it remains a largely disgruntled challenge. Nevertheless, Redman and Wilkinson (2005) and Kaufma (2004) have provided diverse theories to develop joint understanding among the organizational HR, which are the outlined below:
- Action Theory: Redman and Wilkinson (2005) noted that this theory concentrates on the interaction of strategically operating actors, micro politics, the process to limit the free choice of the actors, labour politics, negotiation and so on;
- Economic Theory: It suggests a model defining rational behaviour; however, Beardwell and Claydon (2007) noted that these are the rational choice paradigm and the transaction cost approach;
- Marxist Approaches: Karl Marx developed this theory with intent to remove class differences though the concept of industrial relations and free market economy, but he supported employees’ early efforts to build trade union, workers’ resistance against exploitation, and overthrow of the capitalist wage system (Kaufma 2004). However, Google has already developed diversity and inclusion plan to give equal opportunities to the employees; in addition, it only considers individual merit, qualifications and professional competence;
- However, Beardwell and Claydon (2007) further added that partnership with unions, and systems theory are also popular
- Regulation Theory: This theory based on Marxist approach (Kaufma 2004; and Weihrich & Koontz 2005);
Employee Relations at Google
At the initial stage of this company, it had limited number of human resources who provided simple ideas for the development of Google; in addition, the top leaders had tried to widen those simple concepts to become the market leader in the industry (Brassfield 2013; Kuntze & Matulich 2011; and Shong 2011). The valuable ideas of the employees contribute to design the business operation and become successful for which the management had indented to keep workforce happy to motivate them to show their best performance for this company; therefore, the compensation structure of Google was high in some extent while it provided many facilities (Brassfield 2013).
However, it is extremely esteemed brand, which trying to expand market position for which it concentrated on key services, such as, hold leading position with search platform (Myatt 2013; Kuntze & Matulich 2011; and Shong 2011). In this situation, the employees sever to meet the common objective of Google while the management teams follow humanistic leadership approach and theory Y leadership motivation to maintain relations with the associates (Myatt 2013; Kuntze & Matulich 2011; and Shong 2011).
As a result, the HR managers of this company mainly concentrate on the business competence and productivity, development of the psychological contract and ethical values, long-term ability, ensure enviable work culture, provide high remuneration to attract the new talent, the process to recruit the best talent (Myatt 2013; Brassfield 2013; Kuntze & Matulich 2011; and Shong 2011). On the other hand, the management teams always give effort to satisfy the employees; as a result, it is a dream job to the employees of this organization and the potential candidates (Myatt 2013; Brassfield 2013; Kuntze & Matulich 2011; and Shong 2011). However, the following table gives more idea in this regard:
Kuntze & Matulich (2011) stated that Google keeps good relation with the employees, but it had taken layoff decisions in 2009 and cut the job of 140 Googolers instantly and 200 employees were in list of job cut; however, this downsizing strategy reduced the productivity of the employees for which the competitors gain competitive advantages. At the same time, this company had reduced a number of facilities in order to face challenges at the recessionary period; in addition, Google took other measures to cost adjustment and to trim down “frivolous” expenses in the fiscal year 2008/09, such as, it developed the trend toward more economical celebrations. However, the employees of this company play vital role to produce higher long-term returns to shareholders through their outstanding performance; therefore, it is important to coordinate the tasks by developing good organizational cultures, otherwise, productivity of the staff and stock prices both fell (Kuntze & Matulich 2011).
The top leaders are committed to recruit skilled and the best talent for which it gives the chance to the students to explore their knowledge to get innovative business ideas for the company; therefore, Google communicates with the students to ensure participation and involvement and to aware them regarding competitive market, customer value, and so on (Kuntze & Matulich 2011). On the other hand, this company prepares cost benefit analyses to employ the students at the adverse economic condition; in this case, it follows cost reduction policy (Kuntze & Matulich 2011; and Shong 2011).
From the discussion, it can conclude that the leaders of Google understand the importance of the employees to become successful for which they provide high compensation, benefits and rewards to the workforce.
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