Employees are a crucial resource for the organization since their performance influences the productivity and profitability of a business. High-performing companies seek to continuously develop and enhance their approaches to human resource management to create a better and more motivating organizational environment for their workers. It is also a common notion in both research and practice that human resource management should be strategic, that is, HRM activities should align with organizational strategy and goals (Noe et al., 2016).
Strategic human resource management can become a valuable practice for the organization since it takes into account the key challenges that affect the organization’s human resources and addresses them in a way that complements corporate strategy (Noe et al., 2016). Studying the application of strategic human resource management in practice can help to highlight shortcomings and develop a better understanding of the relationship between corporate environments, HR practices, and organizational outcomes. The present paper will discuss the HRM environment and practices at Google, one of the largest and most profitable global companies.
Organizational Background
Google, LLC is a large, US-based international company that offers tech services and products to customers from all over the globe. The company is owned by Alphabet Holdings, Inc. and is most famous for its Internet-based services, such as Google search engine, Gmail, and office applications. The company has been growing steadily both in terms of profitability and size. As of early 2020, the number of Google employees was over 100,000, and the company had branches in most major cities of the world, from its headquarters in Mountain View, California to Mumbai, Seoul, and Singapore (Elias, 2020; Farfan, 2019).
To maintain such a large and diverse workforce motivated and productive, the company requires effective HR strategies that would contribute to its operations and support the achievement of strategic goals.
Employees are crucial to Google since their creativity and expertise is what has helped the company to develop into the tech giant that it is now. Consequently, Google focuses on HRM a lot and is famous for its work environment. For instance, Farfan (2019) reports that the organisation focuses a lot on its employees’ work-life balance and general wellbeing and has a variety of policies and practices in place to ensure their satisfaction. Nevertheless, there have been reports of the company experiencing problems with its human resources.
Ghaffary (2020) states that “in recent years, Google workers feuded among themselves and with management over issues ranging from the company’s alleged mishandling of executive sexual harassment cases to its crackdown on employee speech in the workplace” (para. 2). These problems have a significant effect on how employees view the company, as well as on their commitment and satisfaction with their jobs. Therefore, it is essential to explain the external contexts affecting Google’s HR strategy and practice, analyse the company’s response, and offer recommendations as to how these shortcomings should be addressed.
HR and HR Strategy
The analysis of strategic HRM practice requires a full understanding of the concepts of HR and HR strategy. Human resources of a company include its employees, who contribute their skills, experience and abilities to business performance (Noe et al., 2016). Consequently, human resource management is defined as “the managing of people within employer-employee relationships [and] usually involves maximising employees’ performance and effective utilisation of human resources to enhance productivity and other outcomes” (. Consequently, HRM practice is crucial to the organisation as it enables the achievement of organisational goals. Strategic HRM evolved over the years as a term emphasising the strategic nature of HRM within a company and its influence on the achievement of business goals (Syed and Kramar, 2017).
Storey, Ulrich and Wright (2019) note that SHRM seeks to secure a competitive advantage by ensuring that HR practices used by a company reflect its long-term focus, business goals and any macro issues that it faces. In this context, and HR strategy can be defined as the organisaion’s planned HR practices and policies that reflect its long-term goals and current challenges and support the company in sustaining a competitive position in its market (Storey, Ulrich and Wright, 2019). These strategies may include performance measurement and management, talent development, retention schemes, and many other activities that enhance workforce characteristics and lead to superior performance (Lengnick-Hall et al., 2009).
Having a well-defined HR strategy and applying it in accordance with the principles of SHRM is crucial to companies regardless of their industry sector or size. On the one hand, HR strategies help organisations to anticipate and respond to challenges posed by their external environments (Storey, Ulrich and Wright, 2019; Syed and Kramar, 2017). This, in turn, makes companies more agile and flexible when reacting to changes in the economy, market, or other environments. On the other hand, HR strategies also help to ensure that HRM practices align with the company’s strategic goals and objectives (Noe et al., 2016).
A dissociation between HRM practice and organisational strategy threatens businesses since the activities of its HR practices might not contribute to corporate performance. This can pose a risk of financial losses for companies while also impairing workforce characteristics as employees will not be as involved with the company’s strategic plans as they should be. Hence, HR strategies are vital for companies to be able to adjust to and make use of their business environments.
External Contexts Affecting HR Strategy/Practice
There is a significant variety of factors that affect companies HR strategies and practices. For instance, legal and political factors necessitate actions to ensure compliance with relevant employment laws and regulations to avoid sanctions and protect employees from unfair treatment. Socio-cultural factors, in turn, shape the preferences, needs and even behaviours of employees, which influences the organisational environment and their work-related actions. In the modern world, technological factors have also gained prominence due to the fast development of new technologies. In Google’s case, all of these factors affect the company’s workforce and need to be addressed as part of its HR strategy.
Legal and Political Factors
First of all, the organisation is impacted by legal and political environments of the countries in which it operates. As shown by Greenwood (2013), human resource management operates in a complex context of various laws and rules that companies need to address in their HR strategies. For example, countries differ in terms of unionisation and employment contract regulations. Adjusting to various legal and political contexts enables companies to work internationally while preventing legal or financial sanction (Syed and Kramar, 2017). Therefore, operating in a wide range of global locations complicates the SHRM context of the company.
Socio-Cultural Factors
Secondly, socio-cultural factors also play a vital role in Google’s strategic HRM. Socio-cultural factors reflect the conditions of society in which a company operates, so it is particularly important for multinational enterprises to take them into account. Countries where Google’s offices are located differ a lot in terms of culture, and this promotes variations in HRM practices applied (Al Ariss and Sidani, 2016). This can cause difficulties in fostering and maintaining corporate culture, which is instrumental for such a large organisation to succeed.
Another important socio-cultural factor that is of great importance to Google is diversity. In the contemporary world, diversity in workplaces is unprecedented because people have unique opportunities to travel for work while also not being restricted by gender or racial inequality. Consequently, modern workplaces employ people from a variety of cultural, religious and social backgrounds. Furthermore, companies of today strive for greater diversity as part of their ethical initiatives (Armstrong et al., 2010). Diversity in terms of age is also evident as the development of medicine has enabled people to stay in the workforce for longer (Gordon, 2017). Differences that exist between people from various backgrounds can impact HRM practices in an organisation both positively and negatively.
On the one hand, diversity can have significant positive effects on a company and its operations. Researchers highlight the beneficial impact of diversity on innovation, decision-making, performance and improved stakeholder management (Guillaume et al., 2017). For example, diverse employees can bring unique perspectives into decision-making, thus improving operations, products or workplace environment. Additionally, diversity stimulates creativity by introducing variation in perspectives and views and stimulating dialogue between team members (Guillaume et al., 2017).
On the other hand, there is also evidence that diversity can impact the organisation negatively. Studies have linked workplace diversity to critical issues, such as decreased morale, worse individual performance and higher incidence of conflicts between workers (Guillaume et al., 2017). These problems can impair the company’s operations and impact its competitive position if they result in low performance.
Diversity is particularly relevant to Google’s HR strategy because it relies on HRM activities for beneficial effects. Guillaume et al. (2017) explain that the reason as to why companies experience negative consequences of diversity are typically associated with internal organisational factors, such as policies, HR practices, leadership, climate and culture. Therefore, it is possible and even necessary to manage diversity appropriately to achieve the desired organisational outcomes.
Technological Factors
In recent years, the development of technology has shaped workplaces in many ways by introducing new tools, gadgets and programs that can both facilitate or decrease performance. Since Google operates in the tech sector, its workplaces are on track with the latest technological developments, and the company relies on technology significantly to support its functioning. Like diversity, technology is a major trend that has to be addressed as part of HR strategy in order for it to benefit the organisation.
The first potential problem associated with heavy reliance on technology is that many positions are likely to become automated in the foreseeable future (Brougham and Haar, 2018). It is true that using technological tools instead of human resources helps organisations to decrease their operational expenses in the long term and avoid human errors that impact performance outcomes (Brougham and Haar, 2018).
Knowing that might affect the ways in which people think about their careers and jobs. For instance, young people could opt for positions that are unlikely to be replaced by technology, which creates a shortage of talented, young workers in other functional areas. The tendency toward automation also impacts the relationship between workers and their employers. If a person believes their position to become automated soon, they are unlikely to put in the effort to progress in their careers and might opt for changing career paths instead. This creates difficulties for the implementation of HR strategies related to workforce qualities and abilities.
Another possible difficulty that arises from technological development is the shifting nature of the work itself. As noted by Colbert, Yee and George (2016), virtual workplaces are becoming more and more popular among employers since they are cheaper and provide easy access to international experts. There is a multitude of technologies that make working online as easy as possible, and yet, virtual teams create concerns for HRM due to the lack of face-to-face contact, monitoring tools and in-person collaboration (Zuofa and Ochieng, 2017). To work effectively, virtual teams require specific attention from managers and supervisors, which necessitates considering these arrangements while planning HR strategies.
For Google, technology presents numerous opportunities both for international collaboration with leading experts and teams and for improving its day-to-day operations continuously. However, yielding the benefits of technological progress requires ensuring that employees accept new technologies and learn to use them correctly. This is particularly true for workers from older age groups, many of whom are not as proficient in technology use as their younger colleagues. The implementation of new technologies should thus be considered carefully, and employees’ needs with respect to training or adjustment should be fully evaluated.
Analysis of Responses
In general, the company’s responses to most of the contextual factors identified above could be stronger. First, Google shows no significant issues regarding multinational legal compliance based on information available online. The company monitors compliance on the local level, which assists it in preventing legal repercussions and negative events. This is beneficial for a multinational company because legal issues in one of the countries could affect future operations in it, leading to performance losses.
However, respect to diversity management, reports suggest that Google does not meet the needs of diverse workers and does not take sufficient action to employ more diverse candidates. For instance, Umoh (2020) states that the percentage of black people hired by Google in the United States in 2019 was just 5.5%, whereas Latino employees comprised 6.6% of all new hires.
The recruitment of female employees decreased between 2018 and 2018, from 33.2% to 32.5% (Umoh, 2020). In order to enhance diversity, the company has initiated some internal programs, such as selection bias removal and retention case management for underrepresented employee groups (Umoh, 2020). Still, there is significant room for improvement with respect to gender and cultural diversity at Google, and the company could benefit from addressing the problem through greater efforts (Guillaume et al., 2017).
With respect to technological factors, Google seems to be addressing the potential challenges well. The company relies on virtual teams heavily in its operations, with 2 out of 5 teams, including members who work remotely and 30% of meeting spanning across several time zones (Razzetti, 2019). The company uses various HR practices to support the work of virtual teams and address the problems that this type of work entails for employees and the company. For example, Google strives for clarity in its communication with virtual teams, setting clear goals and performance norms to monitor productivity (Razzetti, 2019).
The company has also established support and engagement practices for employees who work remotely, thus supporting collaboration with them (Razzetti, 2019). These responses have helped Google to navigate the HR challenges presented by new technologies successfully.
Conclusions
On the whole, strategic human resource management is essential to organisations wishing to be successful in the 21st century. SHRM focuses on supporting business performance through HR practices and strategies, thus assisting companies in attaining performance and profitability targets. In order to develop effective HR strategies, it is crucial for managers to have an in-depth understanding of the contextual factors influencing the company and its workforce. At Google, the core macroenvironmental factors affecting employees and their work are legal, political, socio-cultural and technological. Issues such as legal compliance, high diversity and the shift to virtual teams can all lead to negative consequences for the company, and so it is important that Google develops and implements appropriate HR strategies continuously.
The analysis of the company’s responses shows no significant issues with respect to legal, political and technological factors. However, the company’s response to diversity as one of the key socio-cultural forces shaping its workforce is inadequate. The company has a low share of women and cultural minorities, despite certain initiatives that sought to promote the hiring of underrepresented cultural groups. Addressing this problem will help the company to yield the benefits of diversity, which could be beneficial for its future performance.
Recommendations
The primary issue that Google has to address as part of its SHRM efforts is diversity. The fact that the company does not hire sufficient numbers of women and cultural minorities means that there is a high congruence of socio-cultural backgrounds in the company. While this can help to promote cohesion and prevent workplace tensions, it also stops the company from experiencing the benefits of diversity (Guillaume et al., 2017).
For instance, increased diversity could have a positive impact on the company’s decision-making and innovation. Increased creativity of the workforce and improved problem-solving abilities, in turn, could help the company to develop better products and growing its market share and revenue. Reports suggest that the efforts implemented by Google to enhance diversity are rather small and, therefore, do not show consistently good results in increasing the share of diverse workers in the company. In order to address this gap, the company should develop and introduce organisation-wide programs for hiring and developing diverse talents.
Nevertheless, simply increasing the number of employees from minority backgrounds would not be sufficient for Google to experience the full benefits of diversity. As explained by Guillaume et al. (2017), diversity should be managed adequately in order to bring good results. Hence, Google should focus on integrating diversity into its internal HR policies and strategies.
For example, Google could benefit from exploring the experiences of minority groups within the company. Performing internal research could explain the limited number of diverse talents within the organisation while also suggesting ways in which the situation could be addressed. Applying various approaches focused on diversity management could also help to develop Google’s SHRM and support existing minority employees. By implementing the recommendations suggested here, the company could leverage its diversity, talent management and employee development while also benefitting from increased creativity and innovation.
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