Graef Crystal on performance stock awards at Google.
Google Inc. is showing one reason why it's such a
wildly successful Internet company: It's using
money the way it should be used -- to motivate
people in a meaningful way.
Last month, two teams of Google employees were
handed $12 million of free company shares, with
more so-called Founders' Awards planned for other
work groups. By giving the stock, the Mountain
View, California-based Google is seeking to
reward, motivate and retain employees.
``The Founders' Award is designed to give
extraordinary rewards for extraordinary team
accomplishments,'' Google co- founders Sergey Brin
and Larry Page said in their first letter to
shareholders. ``A general rule of thumb is that
the team accomplished something that created
enormous value for Google.''
In my graduate psychology training, I was taught
that for money to motivate, an employee must:
understand what performance is being measured and
rewarded; have substantial impact on the
performance measure chosen; and be given the
reward quickly after his performance has been
assessed.
That's the in-school thinking. The out-of-school
reality for most companies is: An employee may
know what performance is being measured, yet he
has no serious input on how it's being done, and
frequently the reward is given out late,
undermining the link between performance and that
reward