How Google Uses People Analytics to Create a Great Workplace Hint: It's about the people, for the people, and by the people -- and you can translate the big ideas to your much smaller company.
By Steffen Maier Edited by Frances Dodds
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This article is included in Entrepreneur Voices on Company Culture, a new book containing insights from more than 20 contributors, entrepreneurs, and thought leaders.
Ever since the term "employee engagement'' started being widely used in the 1990s, it's been hailed as the key to high productivity and retention, profit increase and better customer satisfaction. Companies took notice of the benefits and sought to turn this abstract concept into a trackable metric. Many companies began administering annual employee-satisfaction surveys.
These snapshots help companies check in with team members and assess how happy their employees are in the workplace. While the practice now is widespread, some thought leaders in human resources (HR) have begun questioning the annual survey's accuracy and usefulness.
Related: How to Make Employee Engagement a Top Priority
The problem with most feedback tools.
How do you know the answers you're getting are valid in terms of what you're trying to achieve? A survey by Impact Achievement Group and HRmarketer discovered 48 percent of all respondents did not believe employee surveys provide an honest and accurate assessment, compared to 31 percent who thought surveys painted a true picture.
Some argue that employees are more apt to answer survey questions positively -- creating a sense that everything seems fine (at least on the surface). Employees who give falsely high marks might fear retaliation or feel a general disinterest toward a survey that takes time out of their busy work day. Others might believe their answers won't make a difference. This sense of apathy is evidenced by the simple fact that many companies have trouble achieving high participation rates.
Here's the most revealing finding from the Achievement Group/HRmarketer study: 58 percent of respondents agreed that results did not -- or only slightly -- helped managers gain a better understanding of what behaviors or practices they could change to improve. If surveys don't yield any actionable information, will their results make any difference in how a workplace is run? This loop perpetuates the apathy problem. If employees are conditioned to believe they won't see actual changes in their work environments, what incentive do they have to fill out a satisfaction survey?
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A recent LinkedIn post from Forbes writer Liz Ryan had some pretty harsh words about employee-satisfaction surveys: "Employee Engagement Surveys are the business equivalent of giving the prisoners in a penitentiary a survey to complete once a year and slide through the bars of their cells. The survey process cements an unequal power relationship."
Is she right? Are engagement surveys an HR check-off box at the least -- and a tool for damage control at most? Do these surveys simply give employees the pretense of a voice within a company? Maybe it's time to rethink employee-satisfaction surveys and how we administer them.
How Google does it differently.
At Google, surveys aren't just about checking the pulse of the workplace, they're about constantly striving to improve it. The company's People Operations team (formerly known as HR) uses feedback to optimize different aspects of its people processes and align them with its unique work culture. As a result, the company reports an average participation rate of 90 percent.
Nearly every decision the company takes is data driven -- and that's representative of the culture in a majority engineer workforce, too. But the very nature of the HR field focuses on interpersonal relationships in the workplace. It can be difficult to assess based on pure input/output metrics alone. Productivity metrics are extremely important to gauge effectiveness, but they don't tell the whole story.
For this reason, Google integrates the human aspects through use of people analytics. Mixing quantitative and qualitative data enables leaders to really dig deep into the company's inner-culture dynamics. Google has used people analytics to improve the workplace across a number of studies. A few notable examples appear below.
Related: The Google Tool That Helps You Make Better HR Decisions
Leadership Case Study: Project Oxygen.
Through surveys, company leaders learned that most Googlers are averse to hierarchy. Many employees -- cofounders Larry Page and Sergey Brin among them -- questioned the need for a management level. They thought they simply might flatten the company structure. First, though, they engaged the company's people analytics team to determine whether having managers makes a real difference.
In Project Oxygen, People Operations workers analyzed managers' performance ratings and the upward feedback gathered in employee surveys. They then compared these results with productivity metrics. The outcome? At Google, great managers lead to more engaged and productive teams.
The people analytics team took the research a step further to identify which characteristics made a great manager. The team returned to comments from surveys, performance evaluations and great-manager nominations. They then conducted double-blind interviews with the company's highest- and lowest-rated managers.
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Rather than prove managers unnecessary, Project Oxygen discovered mid-level leaders were essential to create conditions in which other employees could thrive. To be truly effective, though, the company had to turn away from supervisory tactics that ran counter to what Googlers need from a manager. Micromanaging was at the top of the list.
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Google turned Project Oxygen's findings into the company's Top 8 management behaviors and now uses the list as a guidebook to identify and train leaders from within Google's ranks. The initiative's data-based roots make it easier for managers to accept these standards and move toward meeting expectations.
Teamwork case study: Project Aristotle.
In another study, Google sought the perfect formula for creating effective teams. Leaders looked at each team's performance metrics and then at perceptions of effectiveness itself. People analytics acknowledges that abstract terms means different things to different people. Through Project Aristotle, Google learned that executives equated effectiveness with productivity. For employees, team culture was the most important measure of effectiveness. Meanwhile, team leaders ranked ownership, vision and goals as the most important influences.
To capture these varied factors, the people analytics team examined qualitative surveys from the three major employee groups and compared the information to sales performances (stacked against quarterly quota). Combining human experience with hard data allowed Google to see which teams fared the best. Even more important, the results helped Google understand why certain teams succeeded. These findings formed the basis of Google's five essential factors to create a positive work environment.
Translating Google's lessons to other companies.
Google's process provides HR insights into employee engagement. It also creates trust between employer and employee. Googlers feel a sense of equality because they directly shape how their company is run.
Laszlo Bock, Google's former Head of People Operations, described the strategy in a recent Harvard Business Review article. His piece listed four steps leaders can take to "move from hunches to science" in their own decision-making processes. Bock's strategy (1) asks employees to identify the company's most pressing people issues and (2) suggest ways to improve, (3) encourages the analytics team to share feedback company-wide and (4) finally empowers leaders to run experiments that test which data-supported theories work best.
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It's impossible to overstate the importance of engaging the human aspect in HR efforts. Pure performance data alone isn't enough. Qualitative results help leaders truly understand the underlying dynamics at work in their companies. Done right, employee surveys play a crucial role. Start by asking what workers want to improve and take the next steps to move forward from there.
