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BEST COMPANY

Studying the Employee Value Proposition at America’s Top Companies

Matt Gottfried • Julianne Smith • Lindsae Lowrie Nate Engelhardt • Preston McClellan


DEFINING CHARACTERSISTICS

What makes a company great to work for?

GENERAL BENEFITS/VACATION

- Within each company, there are defined benefit packages, vacation policies, time-off stipulations, the rate at which sick leave is accrued, etc. All of these offerings from a company contribute greatly to how it is perceived by its employees and is thus a crucial part of the employee value proposition.

CULTURE/OFFICE AESTHETICS/ENVIRONMENT

- How do employees treat each other on a daily basis? Is it a high-stress environment? Is the feedback given mostly positive or mostly negative? In addition to the human culture, the aesthetics of the office and general vibe given are big factors into employee happiness.

CAREER DEVELOPMENT

- With Generation X and the Millenials slowly starting to takeover workplaces, it is crucial for companies to have characteristics that align with the needs of these current generations. One of the common things that people want is the opportunity for career development. Without the chance to move up the ladder, employees can quickly become complacent or unmotivated and start looking for other jobs.

COMPANY PROFITABILITY

- People want to be successful. Being proud of where you work is crucial to the employee value proposition and overall employee happiness. While company profitability does not solely determine happiness within a company, it definitely plays a role. If the company is successful, it’s also usually a sign that things are going well on the inside.

WORK-LIFE BALANCE/FLEXIBLE HOURS

- Just as younger people in the workplace want the chance for career development, they also want the ability to have a life outside of work. Baby Boomers were known for living in the office. Younger people are not like that. It will be crucial for companies to provide time for employees to spend away from the office.

EMPLOYEE VALUE PROPOSITION

- Each of the characteristics above help to make up the employee value proposition. However, they are not the only factors. Simply defined, it is the balance of rewards and benefits that are received by employees in return for their performance at the workplace.

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TOP TEN Our top-10 companies to work for in America based on the defining characteristics LOCATION: - M o u n t a i n Vi e w, C a l i f .

LOCATION: - Ve n t u r a , C a l i f .

LOCATION: - A u s t i n , Te x a s

LOCATION: - A u s t i n , Te x a s

LOCATION: - N e w Yo r k , N e w Yo r k

N O . O F E M P L OY E E S : - 30,000

N O . O F E M P L OY E E S : - 1,500

N O . O F E M P L OY E E S : - 11 0

N O . O F E M P L OY E E S : - 780

N O . O F E M P L OY E E S : - 14

M I S S I O N S TA T E M E N T : - Google’s mission is to organize the world’s information and make it universally accessible and useful.

M I S S I O N S TA T E M E N T : - Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.

M I S S I O N S TA T E M E N T : - Since launching uShip in 2004, our mission has been to be the world’s leading online solution for shipping anything, anytime, anywhere.

M I S S I O N S TA T E M E N T : - Changing the world, one authentic conversation at a time.

M I S S I O N S TA T E M E N T : - Our mission is to end loneliness

DEFINING CHARACTERISTICS: - Focus on their people - They pride themselves on hiring diverse candidates that represent the world wide customers - They have open culture often associated with startups - Everyone is a handson contributor and feels comfortable sharing ideas a n d o p i n i o n s - o ff i c e s a n d cafes are designed to encourage interactions between Googlers within and across

DEFINING CHARACTERISTICS: - Connection between people and nature - Give back time, services, and 1% of sales - They are 100% organic, give employees the opportunity to support environmental work

DEFINING CHARACTERISTICS: - Tr a n s p a r e n t - Collaborative - Tr u s t w o r t h y - Environment - Always experiment and innovate - Fun culture

DEFINING CHARACTERISTICS: - Entrepreneurial - Spirit - Innovation - Openness - Respect - Generosity - Te a m w o r k

DEFINING CHARACTERISTICS: - Fun, - Bring people together - Improving lives - Live healthy lives

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TOP TEN Our top-10 companies to work for in America based on the defining characteristics LOCATION: - M e m p h i s , Te n n .

LOCATION: - S e a t t l e , Wa s h .

LOCATION: - S a n A n t o n i o , Te x a s

LOCATION: - Deerfield Beach, Fla.

LOCATION: - San Diego, Calif.

N O . O F E M P L OY E E S : - 1,001 - 5,000

N O . O F E M P L OY E E S : - 149,000

N O . O F E M P L OY E E S : - 24,700

N O . O F E M P L OY E E S : - 3,800

N O . O F E M P L OY E E S : - 26,000

M I S S I O N S TA T E M E N T : - The mission of St. Jude Children’s Research Hospital is to advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family’s a b i l i t y t o p a y.

M I S S I O N S TA T E M E N T : - Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

M I S S I O N S TA T E M E N T : - The mission of the association is to facilitate the financial security of its members, associates, and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the m i l i t a r y c o m m u n i t y.

M I S S I O N S TA T E M E N T : - At JM Family Enterprises, our mission is to be the premier provider of quality p r o d u c t s a n d s e r v i c e s . To accomplish our goal, we build mutually rewarding relationships with our customers, associates, business partners and the c o m m u n i t y. T h e c o m p a n y ’ s five core values are what set us apart. Our 3,800 associates adhere to these p r i n c i p l e s , a n d t o g e t h e r, w e achieve success.

M I S S I O N S TA T E M E N T : - To c o n t i n u e t o d e l i v e r t h e world’s most innovative wireless solutions.

DEFINING CHARACTERISTICS: - Great workplace culture - Employees have a great mission that drives them - Competitive benefits, salaries and competition - We e k l y s e m i n a r s a v a i l a b l e to all employees to learn new skills

DEFINING CHARACTERISTICS: - Full health care and benefits for anyone that works at least 20 hours - Great ability to move up the corporate ladder - Wo r k p l a c e c u l t u r e a l l o w s employees to develop relationships with customers and colleagues

DEFINING CHARACTERISTICS: - Service - Loyalty - Honesty - Integrity

DEFINING CHARACTERISTICS: - Innovative - Te c h n o l o g i c a l - Honest - Hard working

DEFINING CHARACTERISTICS: - Consideration - Cooperation, - Communication - Innovation - Accountability

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GENERAL BENEFITS/VACATION HOW DOES GOOGLE MEASURE UP? Google provides its employees with the standard benefits one might expect from a company of its size including: health insurance, retirement benefits etc. Yet, it is the additional benefits above and beyond that set Google above the rest. Google wants to take care of the overall health of their employees, physically, emotionally, financially and socially. Their motivation is making employee’s lives better and easier so that Googlers can focus on the things they love, both inside and outside of work. In the workplace, the culture is one of family. Google wants it’s employees to know that it cares about them and their families as well. In order for Google employees to stay healthy, on-site physicians and nurses, convenient medical services, and comprehensive health care coverage are available. Specific amenities vary at each Google location. Because physical fitness is essential to a healthy physical well-being, Because physical fitness is essential to a healthy wel-being, Google offers state-of-the-art on-site fitness centers at several offices. Employees without on-site gym access have their gym membership subsidized. They also provide free fitness assessments and on-site personal training at a discounted price. Free fitness classes ranging from yoga and kickboxing to dance technique and hip hop are also offered for Googlers free of charge. In addition to physical fitness, Googlers enjoy free meals at on-site cafes, designed to help foster collaboration. The meals are prepared with organic and sustainable ingredients to create healthy and delicious dishes. Even though there are many perks on-site, Google still wants their employees to get away and recharge. Google’s vacation policy grants ample time off during employee’s first year, and the amount increases the longer they work at Google. Googlers are encouraged to take vacations by placing a cap of 30 days on accrued vacation time. Googlers can even borrow 5 days of paid vacation from their first day as a Googler. To help ease any burden while traveling, Googlers and their families are covered with travel insurance and emergency assistance. This coverage exceeds travel for work and even covers personal vacations. In addition to vacation time, Googlers can take up to one three-month leave of unpaid time off under specific circumstances. Health care benefits continue for unpaid leaves of up to three months. Googlers can use their time off to work with non-profit organizations, political campaigns, and other communityoriented projects of their choosing. Googlers are encouraged to take time away from work to impact the world around them. To encourage Googlers to

participate in elections, national election days in the U.S. are declared “no meeting days.” Googlers are also given paid time off every year to participate in community service projects through an employee-led outreach campaign known as GoogleServe. To make sure that hardworking Googlers don’t become stressed or burned out, Google offers ample opportunity for personal rejuvenation. Google provides subsidized massage services at all locations, including chair, table and prenatal massages for our expectant moms. In between appointments with a massage therapist, Googlers can relax in the massage chairs located in every building. To help Googler’s get the proper amount of sleep, a few buildings on the Mountain View campus have nap pods with secluded, relaxing places for rest. For the outdoor enthusiasts, on-site hammocks are also set up in many buildings. Google provides many convenient on-site services in many offices to reduce the errands Googlers have to run after work or on weekends. For example, Googlers Corporate Concierge team can assist with everyday tasks such as planning a dinner party as well as more unusual requests. Multiple on-site services save Googlers precious time that they can instead spend with family and friends or enjoying other hobbies. They include: oil changes, dry-cleaning and alterations, car wash, DVD rental, ATMs and credit union services, bike repairs, haircuts and laundry (at the headquarters location.) There are other miscellaneous benefits that are offered to Google employees. As for maternity/ paternity leave, new parents both male and female get time off and some extra spending money to help with the addition to their family. Google will reimburse employees for any classes or degree programs that will help advance their career. In the even that Googlers would need legal aid, Google provides that as well. They get legal advice at no cost and, in the US, also get common legal services at a substantial group discount. These benefits will not be the same forever. Just as Google is constantly adapting in the technology world, their benefits will as well. Google evaluates their benefits regularly and changes them based on the needs of their changing population. Benefits are an open conversation just as anything at Google is and feedback is a part of the equation. Google’s employees are valuable to us, and their benefits and perks intended to show that to employees.

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WORK-LIFE BALANCE BECAUSE WORK IS GREAT, BUT FAMILY AND FRIENDS MATTER. Work-Life balance has become a worldwide quest for those in the working world, and while everyone is searching for it not all companies have built a culture that exudes it. A great working definition of work-life balance is “meaningful daily achievement and enjoyment in each of our four life quadrants: work, family, friends and self” (Bird, 2003). As contributing members of society, we want to be sure that we still have the time to develop life outside of the office and work. Google has been championed for several years with its ability to build a culture with a great work life balance. On Google’s benefits pages it states, “We’re constantly searching for unique ways to improve the health and happiness of our Googlers…our hope is that, ultimately, you become a better person by working here.” Google improves its employees’ lives by going above and beyond what normal companies do for their employees. At Google, there are on site nurses and doctors. Employees receive travel insurance even on

personal vacations, parents receive perks such as more paid time off and spending allowances, employees are encouraged to never stop learning and legal services are discounted. These are just a few of the many ways Google provides a better work life balance for their employees in comparison to other companies. Google does work-life balance better because the company is constantly evaluating and updating their benefits that help build a work-life balance to better match their population. As stated on their benefits page, “benefits are an open conversation and your feedback is a part of the equation.” By evaluating the benefits Google offers, they are able to build an even stronger work-life balance for their employees because they discover the needs and wants of their employees. These characteristics are imitable, but a company that decides to build a positive work-life balance needs to understand doing so will use resources in a way the company has not used them. Grouper is more equipped to create a similar version to Google’s work life balance due to its nature of being an online service. Employees at Grouper would be able to work from most anywhere at any time of the day, as opposed to employees at St. Jude. This is important to the employee value proposition because it allows employees to plan their lives the way they need while still being a contributing member to Google. Employees at Google are allowed to “punctuate their day” with different activities during the day, whether that be salsa dancing, grabbing food or taking a nap (Clay 2012). The design of Google’s campus and the benefits offered allow Google’s employees to design their own, unique work schedule. In turn, this gets the most of the employees at Google because “Googlers” are allowed the mental breaks they need to be the most productive.

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COMPANY PROFITABILITY Google is a tremendously profitable company. This can be illustrated by their net income being $3.5 billion for the quarter ending March 31st. This is a 16% increase when compared to Google’s income a year ago. The company’s method of generating income is based primarily on advertising that revolves around its search engine. Indeed, the manner in which Google generates profits is imitable. However, they are the largest and best at doing what they do. When an individual compare other search engines, they do not get the notoriety that Google does. For example, Microsoft has been constantly trying to promote their search engine. However, the number of people utilizing “Bing,” their search engine, is significantly smaller. Ironically, Microsoft is more profitable than Google primarily due to the fact that they control the operating system that most people have utilized over the years. Microsoft faces a tremendous challenge to find new ways to grow especially as people migrate to phones and tablets. In a similar fashion, in order for Google to continue to generate

AM I CONTRIBUTING TO SUCCESS?

large profits it must also grow. This is due to the average price that Google charges for AdWords being driven down over the years. Also, advertisers see viewership/users moving more toward the use of mobile platform technologies. Therefore, less “eyes” are associated with desktop search advertising. In addition, advertisers perceive that mobile advertising does not generate immediate sales as readily as desktop searches. This creates a challenge for Google to migrate towards finding better ways to capitalize on the increasing mobile market space. At the same time, Google must overcome the stigma that mobile advertising is less effective for sales. Furthermore, Google’s profitability hinges on its flexibility to explore new and innovative methods to expand its revenue streams. In fact, Google’s CEO Larry Page has been quoted as saying, “Companies tend to get comfortable doing what they’ve always done. […] My job as CEO is to get people to do new things.” Google can increase their profitability by moving into different types of markets other than just advertising. This is coming into fruition based upon Google’s purchase of Motorola, investment in a fiber network, innovative research for technical accessories (such as eye glasses), and research concerning computerized self-driving cars. When compared to the other companies considered, Google takes up a bigger market for advertising revenues than Grouper. Therefore, Google hits more viewers than Grouper. Perhaps, Grouper might have a slight advantage for those advertisers that need to capture a specific “singles” demographic. However, Grouper is not yet well known. When comparing profitability, St Jude is a non-profit organization in general, and there is no comparison.

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CAREER DEVELOPMENT One of the criteria we considered crucial for a company to have was proper career development opportunities for employees. Most employees are always working with their next move or step in mind. This has never been more true than it is with the Millenial generation. Younger workers expect companies to have their careers in mind. This means companies need to have mentorship programs, skills classes, workshops, and training sessions in place so that employees have the opportunity to thrive without feeling like they need to go elsewhere. Google has done an excellent job of making career development a very important priority within its headquarters. Management is such a key function of any successful company, and Google started to formalize its top management qualities in 2009 with something the company termed “Project Oxygen.”

DOES GOOGLE HAVE MY FUTURE IN MIND?

The executives at Google wanted to formalize a set of characteristics that all top managers share. The hope was to create a blueprint or template of sorts for highly effective management habits. What they came up with were eight qualities for highly effective managers. Still, Google warns that it is not trying to make management entirely a numbers game. “GOOGLE executives say they aren’t crunching all this data to develop some algorithm of successful management. The point, they say, is to provide the data and to make people aware of it, so that managers can understand what works and, just as important, what doesn’t.” All this management research allows Google to properly develop its employees. Along with some of the most in-depth management research of any Fortune 500 company, Google also does a fantastic job of providing equal opportunities for employees of all races, gender, etc. Google has an entire section on its website devoted to ensuring that women get equal opportunities and pay at all levels of the companies. This holds true for other minorities.

By making things like this a prority, Google also instills values in its employees. Those values help make the Google work place so unique. So, those values are, in effect, part of Google’s employee value proposition.

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OFFICE CULTURE The common theme that has made Google the top workplace in the world, according to Forbes, is that it creates a culture that promotes work and play. Unlike many stuffy workplaces that are more concerned about efficient usage of floor space, Google is more concerned about creating an environment that will enable its employees to be most productive. Google strives to be different in all aspects of work culture, both in aesthetics and procedures. Google incorporates a very eclectic array of color schemes, modern dĂŠcor and furniture, playground like perks, and a unique property design. The Googleplex, 506,000 square foot Google complex located in Mountain View, CA, has fully stocked kitchen in every building, free to employees, which promote healthy eating habits without forcing the lifestyle choice on its employees. Some of the catering is served out of full-size food trucks that have been implanted inside the buildings. In the staff rooms, the healthy eating options are in translucent jars,

IS GOOGLE A COOL PLACE TO WORK? while unhealthy eating options are in opaque jars. Google has found through its research that this creates an initial subconscious will to eat the healthier options. The majority of the buildings are one story to remove any barriers that would deter employees from interacting with each other. In order to navigate the large complex, Google provides employees with Razor Scooters as well as has plenty of space for employees to ride bikes or run. They even have a Conference Bike, which has multiple seats with pedals around a table with wheels that is used to have meetings outdoors and build teamwork. Employees are also offered several perks, such as messages, yoga classes, day care, etc., that will be explained in greater detail in the benefits section. Everything that is put into the dĂŠcor and perks at the workplace is supported by research to improve employee happiness and productivity. While the workplace at Google is a dream to most employees, Google does not require employees to come into work. Google has created a culture that promotes work/life flexibility by allowing employees to work on their own hours and at their location of choice. However, the statistics have shown that the majority of employees enjoy the workplace culture so much that they not only come in to work, but also during their off hours to enjoy the workplace perks. Google has managed to grow as a company because of the employee-first culture that has been established.

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MEASURING THE EMPLOYEE VALUE PROPOSITIION Google’s employee value proposition is one of the more unique offerings among companies its size. Google seeks to make its employees genuinely love being at work, which thereby leads to greater productivity. Along the way, the company provides value to its employees in many different forms. EVP OVERVIEW According to a 2011 article by Graebel titled “Employee Value Proposition and Its Benefits,” “an EVP comprises much more than salaries and benefits; it reflects the entire employment experience at a company including benefits, career development opportunities, rewards, culture, and management style. The EVP should align with the company’s brand and be reflected consistently to employees” (Graebel, 2011). The Employee Value Proposition “is the deal that the company makes with its employees in exchange for their skills, knowledge and experience” (Graebel, 2011). This article clearly

outlines the need for a formalized employee value proposition that is consistent with the originally promised message to the employees and that is in-line with company culture. In a blog from the Society for Human Resource Management titled Understanding Employee Value Proposition, Sabeet Sidhu states that “the associations stakeholders make with the company include job satisfaction, communities, passion, innovation, flexibility, informality, fun and brand loyalty, of which innovation and flexibility were viewed as stand-outs” (Sidhu). INIMITABLE While the culture at Google is unique, it is not entirely inimitable. Many of the offerings and aesthetics that make up the Google culture could be imitated with enough capital and commitment. The one aspect that would be difficult to imitate is the guideline of not requiring employees to come into work. This is a unique principal that works well within Google’s culture because it is a software/search engine company that uses the Internet as its major platform. Its employees are able to be just as productive from home as long as they are well managed. ROI Google is willing to put in a large capital sum to creating a fun and productive work environment for its’ employees because of the value that each of them bring to the company. In 2008, it was reported that the revenue Google was generating on a per-employee analysis was $210,000 per year. If Google’s cash stockpiles were added into this equation for the present, each employee would be worth $1.4 million of ROI (Beal, 2010).

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HOW CAN GOOGLE IMPROVE ITS EVP? BENEFITS

WORK-LIFE BALANCE

Google has an abundance of benefits, of which many go far above and beyond the typical benefits that most companies offer. In order for improvement, it is not additional benefits Google needs but just a reevaluation of how benefits are distributed and used. It can be speculated that employees might not be able to use each and every benefit to its full potential because there are so many and because employees have different tastes and needs. In order to improve their benefits, Google should consider making certain benefits optional and offer an increased salary or other compensation instead. For instance, perhaps one particular employee does not enjoy massages; he or she could either exchange that for its cash equivalency or could use it to get a different spa treatment like a manicure or facial. Google has a really great benefits package for Googlers; it is hard to say they need improvement at all because other companies cannot come close to offering what Google offers but it might be more beneficial for employees if they could pick and choose the benefits they wanted instead of being given every possible benefit imaginable.

Google does a great job of keeping its benefits relevant to their employees. By reevaluating their benefits, Google is aware of what areas they are lacking in and what areas they are excelling in when it comes to the benefits they offer and the work life balance they provide for their employees. Through this process, Google lowers their risk of employee turnover and strengthens their relationships with their employees. By reducing employee turnover, Google is able to see a return on their investment for building a culture with a positive work life balance. The characteristic of work life balance is imitable; however, not all companies will be able to reach Google’s potential. Google has built what they refer to as a campus and not a place of work. On campus, one can find doctors, gyms, bars, places to sleep or read, etc. Google has created something so unique to the Google culture that is very difficult to replicate. Companies have managed to take certain aspects of Google’s work life balance to help create their own, but no one has developed a campus like feel that creates the work life balance at Google.

PROFITABILITY AND FUTURE GROWTH Of course other companies can attempt to compete with Google based upon their primary business of advertising. However, when it comes to digital advertising, people usually equate that with Google advertising. Since Google encompasses a greater share of market share for digital advertising than most companies, it provides Google with an automatic advantage when competing for new client relationships. In addition, Google is challenging many other companies by expanding into new niches. Google has enough cash to enable themselves to expand their brand to increase profitability. The investment in a fiber network, research in new technical devices, and the purchase of smaller companies will allow Google to expand their profitability into the future.

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Benefits - Google Jobs. (n.d.). Retrieved from https://www. google.com/about/jobs/lifeatgoogle/benefits/ Top 5 Reasons Why Google is the Best Company to Work For. (n.d.). Retrieved from http://www.ibtimes.com/top5-reasons-why-google-best-company-work-553844

What It’s Really Like to Work at Google - LockerGnome. (n.d.). Retrieved from http://www.lockergnome.com/soGraebel. (2011, January). Employee Value Propositions and cial/2012/01/16/what-its-really-like-to-work-at-google/ Its Benefits. Retrieved June 6, 2013 Why Google’s a Great Place to Work and Your Company Sidhu, S. (n.d.). Blogs. Retrieved 6 10, 2013, from Society Isn’t - Vault: Blog. (n.d.). Retrieved from http://blogs.vault. for Human Resource Management: http://www.shrmindia. com/blog/salary-and-benefits/why-googles-a-great-place-toorg/hr-buzz/blogs/shrm-india/understanding-employee-valwork-and-your-company-isnt/ ue-proposition-evp Work-Life Balance Defined - What It Really Means!. (n.d.). Bailey, B. (2013, April 19). Google profits trounce expectaRetrieved from http://www.worklifebalance.com/worklifebaltions as mobile-advertising business ramps up - San Jose ancedefined.html Mercury News. Retrieved June 10, 2013, from http://www. mercurynews.com/business/ci_23055285/google-profitstrounce-expectations-mobile-advertising-business-ramps Kirk, J. (2013, February 28). Comparing The Profits of The Five Titans Of Tech | Tech. Opinions - Perspective, Insight, Analysis. Retrieved June 10, 2013, from http://techpinions. com/comparing-the-profits-of-the-five-titans-of-tech

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Organizational Behavior and Human Resource Management Project