Laszlo Bock’s Work Rules sets forth a humane and data-driven approach to people operations. Bock (who used to run people operations at Google) argues that companies that offer their employees freedom perform better and attract the best talent.
Bock describes Google’s workforce policies and, more importantly, lays out Google’s methods for continuously improving them. Google relentlessly gathers data on happiness and performance. Wherever possible, it reduces complex management puzzles to actionable checklists and uses simple nudges to encourage the right actions.
This gets results. For example, sending managers a checklist of best practices for onboarding a new employee the night before the employee’s first day helped make new employees fully productive 25% faster.
Why Google’s Rules Will Work For You: The Surprising (and surprisingly successful) places that work just as we do
- Google’s philosophy is very similar to other successful companies in very different industries
- Talent is mobile and flows to high freedom environments
- If managers have too much power, employee freedom is diminished as employees worry about pleasing their boss rather than getting things done
- Google takes power away from managers and gives it to groups. E.g., managers can’t unilaterally decide who to hire, fire, or how to rate performance.
- Performance improves when employees have the power to make decisions and learning opportunities outside their scope of their jobs
1. Becoming a Founder: Just as Larry and Sergey laid the foundation for how Google treats its people, you can lay the foundation for how your team works and lives
- Google’s founders wanted to create a company where work was meaningful, employees were free to be great, and people were cared for
- Freedom means having choice about what you work on and the ability to impact your environment
- The best founders let others become founders alongside them
2. Culture Eats Strategy Breakfast: If You Give People Freedom, They Will Amaze You
- Google’s culture has three aspects: Mission, transparency, and voice
- Mission should be moral: Google’s is to make the world’s information accessible; there’s no mention of customers, profits, or shareholders
- Transparency is the default; without it there’s waste, internal rivalry
- Voice means giving people a say in how a company is run. This improves performance.
3. Lake Wobegon, Where All the New Hires Are Above Average: Why Hiring Is the Single Most Important Activity In Any Organization
- Most people recruit the same way and aren’t great at interviewing
- Google spends more time and money on hiring than others
- Google hires slowly. Top performers aren’t looking for work and instead have to be cultivated over time.
- Hire only people better than you
- Operationalizing this means taking hiring power away from managers because managers compromise their standards as the search drags on
- Look for people who have overcome hardship
- Look for underlying attributes the predict success rather than just prior performance; being a star in another environment doesn’t mean someone will be a star at your company
4. Searching for the Best: The Evolution of Google’s Self Replicating Talent Machine
- Have an objective standard, a single final reviewer who upholds the same standard of quality across all applicants
- Referrals from current employees are critical, but Google’s early referral process didn’t get enough referrals
- The application didn’t treat applicants or referrers well enough
- Google lowered the number of interviews in any candidate’s process and kept referrers in the loop about how their friends were doing
- Employees needed to be coached with specific questions and events to aid recall for potential candidates; e.g., “Do you know any good salespeople in NYC” or holding a recruiting party where everyone would look at their network for potential recruits
5. Don’t Trust Your Gut: Why Our Instincts Keep Us From Being Good Interviewers, and What You Can Do to Hire Better
- Interviewers commonly make a judgment about a candidate early in the interview and spend the rest of the time trying to confirm that judgment
- These early judgments are not predictive of the candidate’s potential
- Case interviews and brainteasers are not predictive of potential because they are easily gamed
- The best predictors:
- #1: Sample test, a simulated piece of work that is evaluated
- #2: Cognitive test with defined right and wrong answers
- #3: Structured interviews with a consistent set of questions and criteria for evaluating answers
- Behavioral: What did you do in this situation
- Situational: What would you do in this situation
- The Department of Veterans Affairs has a list of sample structured interview questions online
- Four traits predict success at Google
- Cognitive ability
- Leadership
- Culture fit, which for Google means:
- Intellectual humility
- Conscientiousness
- Comfort with ambiguity
- Having taken some interesting paths in life
- Role-related knowledge
- This is the least important because Google doesn’t want someone who robotically applies things that have worked in the past to situations that may be different
- Evaluating these traits
- At least two interviewers must ask about each trait
- They must write a report discussing which attribute they asked about, what question was, the candidate’s answer, and their assessment
- The report enables independent evaluation by others
- Check to be sure that the process works
- Google shortened the process to only four interviews after determining that additional interviews did little to change the result
- Interviewers get feedback on whether their scores are predictive of whether someone is hired
- Six stages in the Google hiring process
- First, recruiters do resume reviews
- Second, recruiters assess problem solving and learning ability using a video chat
- Third, a subordinate interviews important hires to prevent the manager from hiring his buddies send the message that hierarchy isn’t valued
- Fourth, someone from a different function interviews them
- Fifth, they compile feedback, weighting all interviews equally including the subordinate’s. No one interview is usually very determinative, all together are very accurate.
- Sixth, there are multiple layers of disinterested reviewers who look at the interview reports, including a hiring committee and the CEO
6. Let the Inmates Run the Asylum: Take Power From Your Managers and Trust Your People to Run Things
- Managers typically have so much power that subordinates are overly deferential and don’t have enough freedom to innovate
- Google combats this by:
- Removing as much formal authority from managers as possible
- There are no status symbols at the office like executive dining rooms
- Decisions are made based on data rather than manager opinions
- Google busts myths by making lots of data public, such as what factors correlate with promotions
- Google surveys employees, publicizes the data, and takes action on recommendations
- Google uses survey questions to predict what parts of the company are likely to experience attrition and then intervenes
- Setting high expectations but not specifying methods leads to the highest performance
7. Why Everyone Hates Performance Management, and What We Decided to Do About It: Improve Performance by Focusing On Personal Growth Instead of Ratings and Rewards
- Performance management systems often become a substitute for managing people
- Setting measurable goals is helpful but laboriously ensuring that each unit’s goals line up with the one above is not a good use of time, just make everything public and it will line up well enough
- Review structure
- Reducing the frequency of reviews to biannual and switching to a five point scale rather than a 41 point scale didn’t lower the effectiveness of reviews
- In fact, a five point scale creates more variation in ratings in that people use the bottom and top categories making it easier to know who to coach and who to use as a model
- Review calibration
- Ratings are calibrated by having groups of managers review the ratings together to be sure they have similar expectations
- Calibration meetings start with a review of common cognitive biases, such as recency bias
- Managers review distributions of ratings across teams to see if there’s a good reason for them
- Separating reviews into two parts
- Giving feedback should be separate from discussing raises and promotions
- If the conversations are combined, people will focus on the reward/raise, argue with their feedback, and shut down their learning
- Managers also fear having an argument and may give raises to avoid the argument
- Promotions
- Decisions are made by committee and are calibrated against prior years results
- Those not promoted are given specific things to improve to do better the next year
8. The Two Tails: The Biggest Opportunities Lie in Your Best and Worst Employees
- Power law defined
- Not a standard bell curve with highest point at the mean, in a power law one end of the distribution dominates
- Example: Earthquakes. Most earthquakes are of below average strength but the small number of very large ones pull the mean to the right
- With work performance, average performers don’t create most of your output; the small number of best performers create most of the output
- Bottom performers represent a great chance to raise performance
- They got through the interviews so their poor performance is probably fixable with a skill upgrade
- Google’s interventions with bottom performers typically raise them to average, which is a huge improvement
- If they don’t improve, it’s better to let them go rather than to let them coast for years and have their skills atrophy and not get a chance to be excellent somewhere else
- Top performers represent a chance to learn what traits are successful
- E.g., studying high performing managers with teams who rated them highly
- The method was to look at the differences between the very best and the very worst managers
- Teams under the best managers felt that:
- Decisions about performance and promotions were fair
- Their manager helped employees meet career objectives
- Work was efficient: decisions were made quickly, resources allocated well
- They were empowered to get things done
- They had freedom to manage the balance between work and personal life
- Team members with good managers performed better and were less likely to leave. Managerial quality was the single best predictor of whether an employee will leave.
- Google conducted double blind interviews of good and bad managers to uncover what their practices were. Neither the interviewer nor the manager knew if the manager was in the good or the bad category.
- Traits of top managers:
- Good coach
- Empower the team, don’t micromanage
- Express concern for success and wellbeing of team
- Be results oriented
- Listen and share information
- Help with career development
- Have a clear strategy for the team
- Have important technical skills that help the team
- E.g., studying high performing managers with teams who rated them highly
- Checklists make performance insights practical
- Teams give feedback on a questionnaire that reads like a checklist of good management practices. E.g.:
- My manager gives actionable feedback
- My manager doesn’t micromanage
- My manager shows consideration for me as a person
- My manager keeps us focused on results
- My manager shares relevant information
- My manager has had a conversation with me about career development in the last six months
- My manager has the technical expertise to effectively manage me
- I would recommend my manager to other Googlers
- Teams give feedback on a questionnaire that reads like a checklist of good management practices. E.g.:
- Google corporate learning supports managers’ achievement
- Taking their Manager as a Coach course improves coaching scores by 13%
- Taking Career Conversations improves coaching scores by 10%
- These initiatives have improved managerial quality
- Manager’s scores have gone from 83% favorable to 88% from 2010-2012
- Letting managers who scored poorly know their score, in an environment divorced from reviews or compensation, helps them improve. The lowest performing managers went from 70% to 77%.
9. Building a Learning Institution: Your Best Teachers Already Work for You…. Let Them Teach
- The average employee gets 31 hours of training per year
- Most of that is wasted because there’s no measure of what’s learned or what behaviors change
- Having your best people teach decreases their productivity marginally but increases that of many people significantly
- Only invest in training that demonstrates learning and results
10. Pay Unfairly: Why It’s Okay to Pay Two People In the Same Job Completely Different Amounts
- Four principles for compensation
- Pay unfairly
- Celebrate accomplishment, not compensation
- Make it easy to spread the love
- Reward thoughtful failure
- Pay unfairly: Your best people are worth more than you think and more than you pay them
- Most companies determine a market average and then limit how much an employee’s pay can deviate from that average
- They do this because they think that contribution doesn’t vary that much among employees
- The only way for top performers to escape this is to leave, which harms their current employers
- That’s wrong: Real fairness means paying commensurate with contribution, which means large variance between individuals
- Contribution for top performers increases quickly with experience
- It follows a power law in which the best performers account for a massive amount of team output and most performers are below average in output
- 10% of performance comes from the top 1%; 26% of output comes from the top 5%
- The top 10% generate 10 times the average performance
- Large variance in pay is difficult
- It means paying the median employee less
- You have to be able to explain the variance to the satisfaction of everyone
- The only thing harder is seeing your top performers leave
- Most companies determine a market average and then limit how much an employee’s pay can deviate from that average
- Celebrate accomplishment, not compensation
- Google’s founder award program, which publicly gave large financial rewards to top technical staff, made employees less happy
- Only technical staff on key teams had a real chance to win, making everyone else feel left out and creating the sense that money was celebrated
- People regard rewards as fair even if they don’t win so long as they think the process was fair and that winners behaved fairly
- Experiential rewards can generate more happiness because they’re not evaluated in comparison with your current salary, like a cash award
- Even though people say they prefer cash awards, experientially rewarded people are happier post award
- Google’s founder award program, which publicly gave large financial rewards to top technical staff, made employees less happy
- Make it easy to spread the love
- gThanks program: a public way to say thank you to another employee with a slick interface that makes it easy to use
- Employees can give a $175 cash award to another employee with no managerial sign off. This hasn’t led to significant abuse; employees police this culturally.
- Reward thoughtful failure
- Many smart people are paralyzed by failure because they haven’t experienced it
- E.g., many Harvard Business School graduates get stuck in middle management jobs because they stop learning once they hit a roadblock
- E.g., Google Wave was an innovative product that didn’t work. Members of the team sacrificed some of their Google compensation to work on the project. The company made sure they weren’t hurt by taking the risk, which helped keep some members of the team at Google when it was shut down.
- Many smart people are paralyzed by failure because they haven’t experienced it
11. The Best Things in Life Are Free (or Almost Free): Most of Google’s People Programs Can Be Duplicated by Anyone
- The goal of people programs and perks is to foster efficiency, community, and innovation
- Encouraging efficiency (professional and personal)
- Chores waste a lot of your people’s time, so Google offers onsite services like bike repair, car washes, dry cleaning, haircuts etc.
- These cost the company almost nothing; service providers want to come on site to get the employees’ business
- Chores waste a lot of your people’s time, so Google offers onsite services like bike repair, car washes, dry cleaning, haircuts etc.
- Community
- Google has a “take your parents to work” day where employees can say thanks to parents and show them what they do
- Innovation
- Perks are designed to create serendipitous interactions between employees who might exchange interesting ideas. E.g., office kitchens that are located so people from different teams run into each other.
- Other nice things Google has done
- If an employee passes away, their shares all immediately vest, the survivor gets half their salary for 10 years, and an additional $1,000/month for each child
- Google moved to five months of maternity leave when three was standard; this reduced post-childbirth attrition among women to the same level as men
12. Nudge… a Lot: Small Signals Can Cause Large Changes in Behavior. How One Email Can Improve Productivity by 25 Percent
- Our perception and attention are flawed; we hardly think about many decisions
- Nudges are a change in the environment that influences decisions without forbidding an option or substantially changing the economic incentives
- To avoid employees feeling uncomfortable about being influenced, Google discloses the nudges it makes and ensures that they aren’t shoves
- Google nudges employees to increase wisdom, wealth, and health
- Wisdom
- The problem: Many new employees fail or take a long time to become productive; half of senior hires fail within 18 months, half of hourly workers leave within 120 days
- Solution: A checklist for managers of a new hire listing the managerial behaviors that help increase new hire success and a checklist for new employees of behaviors that make them more successful
- The checklist is delivered the evening before the new hire starts
- The checklist is supported by academic citations to prove its validity and persuade the manager to implement it
- The checklist goes into detail on each point and provides examples so it is easy to implement
- The checklist advises managers to:
- Have a role and responsibilities discussion
- Match the new employee with a peer buddy
- Help the new employee build a social network
- Set up onboarding check ins once per month for six months
- Encourage open dialogue
- When managers took action based on this email, it made Nooglers fully effective 25% faster
- Solution: New hires are told about five behaviors that increase their success and reminded by email two weeks into their job.
- Google discovered these behaviors by looking at the two tails of the performance distribution; i.e., what did the top people do that the bottom people did not do.
- Those behaviors are:
- Ask lots of questions
- Schedule regular 1:1 meetings with your manager
- Get to know your team
- Solicit feedback, don’t wait for it
- Take risks; we’ll support you
- Wealth
- Lifetime wealth accumulation varies by a factor of 30 for households in the same income decile
- Most of the variation is explained by whether people start saving when they’re young
- Google experimented with email reminders to save more if they hadn’t maxed out their 401k
- Getting a reminder increased savings; the specific content of the reminder message didn’t make a significant difference
- Lifetime wealth accumulation varies by a factor of 30 for households in the same income decile
- Health
- Diet is the most controllable source of health outcomes
- Google tested three ways to intervene to promote good diet: information, limiting options to only healthy choices, and nudges.
- Nudges were the most effective:
- Informational signs had no effect on what people bought in cafes
- Employees did not like having their options limited, even though they wanted to eat healthier
- Nudges, like making healthy food more prominent in dining halls, decreased calories from candy by 30%
13. It’s Not All Rainbows and Unicorns: Google’s Biggest People Mistakes And What You Can Do To Avoid Them
- There are arguments against Google’s HR philosophy and they have some weight:
- Being open about company information will lead to leaks
- Giving people a voice will let them do crazy things
- Employees don’t appreciate the nice things you do
- Nice things cost too much
- Google fires people who engage in major leaks
- Reject entitlement
- Google used nudges to stop people from ransacking kitchens to get free food to take home
- Don’t worry too much about consistency
- Google altered a proposed change to reviews based on feedback
14. What You Can Do Starting Tomorrow: Ten Steps to Transform Your Team and Your Workplace
- The core of his philosophy is that people are good and can be trusted with freedom
- The best people will want to work in environments that offer freedom
- These are ten steps you can put into place:
- Give your work meaning
- Think about the people you help and how you help them
- Everyone in your organization contributes to that mission
- Trust your people
- Give people authority and let them grow into it
- It’s OK to say that a new policy is a test if you’re unsure if it will work
- Hire only people who are better than you
- Bad hires drag themselves down and all those around them
- The cost of hiring more slowly may be that everyone else has to work harder; so be it
- Don’t confuse development with managing performance
- Make developmental conversations safe by having them frequently and disconnecting them from pay and performance reviews
- When the performance period is over, then you can talk about rewards and benefits
- Calibrate performance reviews by having managers sit together and compare assessments
- Focus on the two tails
- Study your best people to determine what leads to success
- Let your best people teach others
- Your worst performers are a great opportunity to improve performance
- If you’ve hired well, they’re likely good people in the wrong spot
- If you can’t help them improve, then exit them immediately so they can find a better fit
- Be frugal and generous
- Most benefits cost very little, like having vendors come on site to provide services
- Generosity has a big impact when people face major challenges, like health issues or a new family member
- Pay unfairly
- Your best people generate a disproportionate amount of the value on the team
- Explain to B players why they get paid less and how they can change that
- Nudge
- People tend not to change their savings rate over their lifetimes; nudging Googler’s to save 3% more is expected to add $262,000 to their retirement funds
- Manage the rising expectations
- Let employees know when something is an experiment so that you can change direction when it’s necessary
- Repeat
- Building a great culture takes experimentation and renewal
- Any one initiative reinforces others, so get started
