Google pay hike is ‘short sighted’

by 17 Nov 2010

Google’s announcement that it is to award a 10 per cent pay rise for its entire global workforce has been criticised for being a “short-term tactic that won’t prevent the Facebook brain-drain” by a leading reward expert.

RedBalloon founder Naomi Simson said the employee engagement generated by a 10 per cent pay rise and shifting of annual bonuses into pay checks will only last as long as it takes for the extra cash to be swallowed by the mortgage or credit card.

It is thought the move was designed to stop staff being lured to IT rival Facebook, where between 15 and 20 per cent of employers are ex-Google.

“It’s widely-documented that cash rewards don’t inspire employee loyalty,” said Simson.

Earlier this week, Google CEO Eric Schmidt sent an internal memo to all 23,300 employees, saying the company wanted to reward staff for their hard work.

US media reports have since said that the employee who leaked the memo has been sacked by the firm.

“Loyalty is never about the money,” added Simson.

“I recommend Eric Schmidt invest in experience-based rewards and recognition over the cash incentives. Notice people, love them, value their contribution and make them heroes – make their dreams come true and they will be with you forever – and will also give you their valuable discretionary effort.”

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