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To What Extent Has The Change Of The Motivation Strategies In Google Lead To An Increase In Profitability

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Google was founded in 1998, by Larry Page and Sergey Brin and its headquarters are located in Mountain View, California. The US multinational technology company which is primarily focused around Internet-related services is chiefly known for the internet search engine. The search engine of the huge tech company holds almost the 75% of the worldwide market share. Google also specializes in advertising technologies, hardware, software, and cloud computing. During this research, I will investigate the financial position of the company and examine whether the motivation theories used to the employees, lead the company to an increase in its profitability.

Based on my research question: “To what extent has the change of the motivation strategies in Google lead to an increase in profitability?” I will analyze financial and non- financial HR strategies, motivation theories: Maslow and Pink, profitability ratios: Net Profit Margin and Gross Profit Margin. Then I will prepare a STEEPLE analysis (Social, Technological, Economic, Environmental, Political, Legal and Ethical) to show the opportunities and threats of the external environment. Since Google is competing in the fastest growing market and industry nowadays, new startups join the industry and try to steal the market share that the “monopolist” holds. So, Google changed their organization strategies by implementing new rules and motivating aspects to make their employees work efficiently, with better results, therefore, they maintain their power in the market. So, their profitability by “making work happier for employees” increases. To investigate the research question, I will use secondary research material such as websites, newspapers, and the Internet. The information will be both marketing and financial data before the year of implementation of the new motivating rules and after the implementation, to see the change in profitability and analyze what I have found.

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Google wasn’t titled as the “Best Company to work for” for no reason. Their practices to motivate their workforce, which exceeds the 50,000 employees, are very effective. Googles’ founders understood that to have a productive workforce, you must support them, make them feel valued and respect them. According to Douglas McGregor who came out with two different terms: Theory X and Theory Y, in 1960, the two theories explain the reasons why people work, Googles’ norms and actions fall under Theory Y where most of the companies are closer to Theory X. Theory X suggests that people aren’t motivated to work, are negligent, irresponsible and not attentive. They don’t aim to get better at their job and to be more productive, but they are bored of working. They tend to work only when strict methods are implemented by companies. The one approach is called “stick” and is activated when targets aren’t achieved by employees and companies threaten them; but fear is a great motivator. The second approach is called “carrot” and is the most common approach that companies put into effect. The reason behind is that people are persuaded easier when they are offered awards, usually financial ones. Profit is good motor but not the only thing. This is why Google, behaves according Theory Y. The company tries to motivate all employees by their strategies and make them want to reach the last level of Maslow pyramid, self-actualization. So, workers love their work, they are focused on it and solve any problems, overpass any obstacles and difficulties they may be faced with. Theory Y relates to “human relations school”

Starting with the first level, physiological needs. These are basic needs, that every worker needs to have to survive. Google offers these foundations needs by means of a steady salary, free lunch, and dinner. They have a two-year contract to finish the project they work on. Those healthy meals are available daily, cooked by gourmet chefs. So, in this way, employees can eat without spending money for their meals, thus ‘’saving’’ some, for other external needs and wants. Also, the maternity benefits of a maximum of 18 weeks off at about 100 % pay. The newborn is given expenses of 500 $ for meals in the initial 3 months they spend at home. Satisfying the first level is very important because the satisfaction of the next levels can be achieved. Continuing with the second level, we have security needs. The safety needs are the demands necessary to make people feel safe and stable. Google offers financial help up to 5000$ to employees for legal expenses. Also, for feeling secure and stable for their everyday minor needs, the company offers inside its headquarters, on site carwash, oil change, bike repair, massage-therapy and hairstylist for its employees. Similarly, at another location, GooglePlex, the company offers onsite doctor, free fitness center, trainer and laundry facilities. So, they have private security service for their health problems. In this way, by feeling secured they can be more productive, motivated and achieve in the plans they work on. The third level is social needs. Google satisfies to a great extent social needs of its employees. The financial aid to adopt a child, is an example of an ethical practice, thus increasing their brand recognition at the same time. Practices like the ability to express or communicate ideas through several channels, gives a great feeling of acceptance and trust to the employees. The channels used and the possibility of directing emails to any of the Google leaders, lead to a sense of worth and belonging at work.

The social events organized, give the feeling of fun and social interaction within the working environment and promote the personal creative sessions. Fun is also included in cases like April Fool’s day, where they allowed to make gags to the world and the weird and extreme office and building design as for example the slide-type and the ladder. The most important part is the recognition and rewards for the most motivated employee. These rankings and titles make them feel part of a small community where trust, acceptance, friendship and teamwork exist.Moving to the next level, we have self-esteem. These are satisfied in Google by a mix of involvement of employees in many aspects different than their direct responsibilities. They can comment on their managers’ performance, they have access to every crucial information about the progress of the company and, there is a lot of sharing of everybody’s work. When they share the same data as the BOD, they feel they are respected and acknowledged. They understand that managers of Google know their value and that they are able to offer the same working results as them.

Another practice that gives the same feelings to the employees is the freedom over how and when work is completed. They feel that the company is recognizing their personal needs and how these interfere with their working schedule. Thus, time freedom makes them more relaxed and productive for their tasks. Also, the allowance and freedom of the software engineers to create their own desks contributes to the high level of self respect, which is an internal need. Finally, the last level of Maslow’s pyramid is self-actualization. The freedom and flexibility allowed for employees to complete their tasks in their own unique ways, is challenging and can approach it in the ways they believe they can work best. It’s true, and through the previous years Googles employees with this freedom invented some of the most successful “systems”. The 80-20 that gives the ability to the workers to spend their 20 percent of their time, drives to reaching one’s full potential. They self- develop, due to these circumstances they usually surpass management’s expectations for their extensive and noteworthy work. An example of this 80-20 rule is the work of Chade-Ment Tan. In his free hours he invented a very successful course on mindfulness. And for his work he was entitled in New York Times.

The achievement of the fifth and last level of Maslow’s pyramid results in what every company dreams to have. An entrepreneurial environment which enables employees to work upon projects they dream of and making them real. Googles workers are some of the smartest minds in the world. So, when you give them challenges and let them innovate, amazing apps, services and more can be done. Motivated employees are one of the main keys which drives companies to success. It’s true that not all employees have the same needs, so it’s kind of impossible for Google to satisfy all the needs. But, observing the markings given to their managers and leaders, 95% voted that are extremely happy about working for this tech giant company, with maybe one of the most known brands, Google.PINK:Google gains when it has motivated employees. They are geared up and willing to work. Motivated employees lead to fewer mistakes and faster production. So, Google by implementing new rules and regimes creates a friendlier working place where workers feel more comfortable. They get inspired, they think of new ideas, apps, hardware and software that keeps Google in the top place in the fastest growing market.

The biggest motivator is enjoyment, the feeling of how creative employees are while looking for challenges, to get better, for mastery and engagement. Daniel H. Pink attacks the motivation theories of the twenty-first century, by stating the traditional works are more effective than monetary rewards, which disables the full usage of creativity skill by employees. By reading his book, The Surprising Truth About What Motivates Us, I ended up to the conclusion that intrinsic motivation, a person’s desire to complete activities for their own benefit, typically causes people to take action without external encouragement or influence, is exceptionally necessary for the workforce.

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