Google employees bombard executives over compensation at recent town hall meeting

Sundar Pichai, CEO of Google

Anindito Mukherjee | Bloomberg | Getty Images

Google executives, facing a barrage of criticism from employees over pay-related issues, defended the company’s competitiveness at a recent town hall meeting while acknowledging that the performance review process could change.

The company-wide virtual rally earlier this month followed the release of the results of an internal survey, which showed that a growing number of employees do not consider their compensation to be fair or competitive with what they could earn elsewhere.

At town hall meetings, Google CEO Sundar Pichai and other top executives regularly read Dory’s Best Submissions, a site where employees write questions and give a thumbs up to those they want management to approaches.

The second highest-rated question ahead of the March meeting was about the annual Google Geist survey. As CNBC reported, the lowest scores in the survey, which was sent to employees in January, were in the areas of compensation and performance.

“Compensation-related questions showed the biggest drop from last year, how do you understand why?” Pichai read aloud the employees’ submissions. According to the survey results, only 46% of respondents said their total compensation is competitive with similar jobs at other companies.

Bret Hill was the first to respond. Hill is Google’s vice president for “Total Rewards,” which refers to compensation and stock packages.

“There are macroeconomic trends at play,” Hill said. “It’s a very competitive market and you probably hear anecdotal stories of colleagues getting better deals at other companies.”

Hill said people “feel the effects of inflation in their own lives” and “deal with the changes in location and the effects there.” He was referring to an announcement made last summer, when the company said it would adjust wages for relocating employees based on the market rate for that region.

Google has long been considered by engineers to be the place to go in Silicon Valley for the best salaries and benefits. However, the company faces a clear challenge in its efforts to maintain that status, as the combination of soaring inflation rates and a four-month decline in tech stocks, even after a big rally last year. last, left employees nervous.

In a statement to CNBC, a Google spokesperson said employees are well paid and the company values ​​feedback.

“We know that our employees have many choices when it comes to where they work, so we make sure they are very well compensated,” the spokesperson said. “That’s why we’ve always provided above-market compensation in terms of salary, equity, time off and a host of benefits.”

Employee retention and satisfaction are more important than ever to Google and its industry peers as record numbers of people in the United States leave their jobs and explore new opportunities. Google is also set to start moving most of its employees back to physical offices at least three days a week, adding another wrinkle to workers as they consider future employment.

Salary is always a priority. In February, Amazon announced to employees that it would double its maximum base salary for corporate employees, citing the competitive job market. One of the top-rated questions read at Google’s meeting referenced Amazon’s raise and said Apple was paying more in restricted stock units.

“Base salary cap adjusted by Amazon, Apple would have used RSU bonuses,” the question read. He then asked what steps Google was taking.

Hill, who joined the company in 2021 after 15 years at Amazon, said there is a list of 81 companies that Google typically competes with for talent, including Amazon, Apple, Facebook and Microsoft. He said these are where Google finds recruits and where employees go when they leave. Hill noted that Google pays on average in the top 5-10% of the market.

“We already compare favorably to these companies,” Hill said. “We are able to hire from them. We will make changes if and when needed.”

Pichai stepped in to agree with Hill.

“One thing I’ll add is that for any given company, we look very hard to see the net flow of people and how we’re doing,” Pichai said. Google is doing “very favorably” in “almost all businesses”, he added.

“worrying” trend

Based on the other topics in Dory’s queue, the employees are unconvinced. Pichai read the following question:

“Googlegeist results show a 10 point drop in year-over-year numbers to keep our compensation competitive with other companies, while executives continue to say we’re paying the best deal. Is it time to remove the lowest paying companies like Walmart from our benchmarking and adjust does the employee pay accordingly?”

Again, Hill responded.

“We are concerned about this trend and are watching it closely,” Hill said.

An entire section of Dory questions was devoted to Googlegeist. For topics not related to the survey, there was a section titled “Other”. Even there, the top rated questions were about pay.

Here is the question from this section with the second highest number of upvotes, as read by Pichai:

“If Google aims to hire the top 1% of talent, why isn’t Google aiming to pay 1% of salaries, rather than being the top 5-10% in the market?”

Hill said the company wants to “hire the best people everywhere” and has generally achieved that by being within that range and offering a “broader package.”

Pichai added that “when we say the top five at 10%, we plan to be very aggressive. So, for example, when we see job functions based on supply and demand, we do what we need to recruit new people and sometimes the number is much higher too.

“Systematic corrections”

Employees also asked about Google’s performance reviews. The process is known to take several weeks and requires employees to self-assess and collect assessments from managers and may also involve peer assessments. The deadline is extended if an employee seeks a promotion.

Executives said changes to performance reviews, or what the company calls “perf,” are on the way.

“With so much emphasis on performance, aspiring employees are driven to do what’s best for performance, which isn’t necessarily what’s best for Google or users,” said a question from high rank. “What are we doing to solve this problem? »

Brian Welle, vice president of people and performance analytics, responded by saying, “As head of the perf team, I’m also concerned about this one.” He said the company is “working on systematic fixes” and in the meantime “encouraging Googlers and managers to work together to set clear performance expectations.”

Pichai said the company is considering changes to the performance review process and hopes to “come back and give a more comprehensive update.”

“Employees want to feel like they have an impact,” he said. “There is so much we can do to make perf a much more supportive process focused on developing people as well as aligning with business goals.”

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