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Wed, 04 May 2005
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
Posted 05:48

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