I think on some level, they're constrained by collective bargaining agreements. Maybe they hope you've been with the company so long you only see the people around you. Maybe they only see the people around them.
There was a real technical superstar of a guy a few years ago. I didn't work with him, but a coworker did. He went to management and said, "Give me a 17% raise or I'm leaving." They didn't and he did. The fallout was cataclysmic.
I left a project about three years ago, and there was widespread panic when I announced my decision to leave. I took four months to pack things up and leave them in a stable state, but you cannot totally mask the absence of talent. A coworker asked, "Is there anything this program could do to make you stay?" I answered, "No." He said, "How about a 200% raise?" I said, "Oh, I'd stay another year for that." Judging from the fallout over that year, it would have been an efficient option. But they either didn't have the power or didn't have the perception.
I assure you that pay increases in large companies in the valley are not a slam dunk 10% a year, particularly if you aren't getting a promotion to a new position.
For me, you usually don't earn what you deserve, but what you negotiated.
Does anyone have more information on this?
When a company is filled with engineers, it turns to
engineering to solve problems. Reduce each decision
to a simple logic problem.
Not sure, if this a 10% raise really.
You're right. The distribution isn't clear. It doesn't sound like a flat 10% raise. Yet, it is a 10% raise, no?
20% of staff-time should be taken off anti-pagerank gaming efforts and redirected at anti-bonus-metric gaming.
Come on. In any organization of that size there are people you really want to hang on to. People about whom the question "How would I replace that person?" is harder to answer than for others. My only point is if the stated goal is to retain people, put the resources toward those you actually want to retain. If Google is so exceptional that they really don't have that issue, then I am totally impressed.
Of course the other possibility is that Google is without constraint when it comes to compensation resources, which would also be completely foreign to my experience and invalidate my point.
The best way I've seen this done is carrot and stick combined. When I worked with MySpace/NewsCorp (for all my sins) one of the things I was most encouraged by was their anual review...
EVERYONE in the company was given an anual performance review by their manager with a final mark out of 5.
Then out of no where it was simply announced that EVERYONE who got 1 or 2 out of 5 was fired. No one knew that was going to happen but it was simple + effective.
Low performers, slackers, idiots and the like were immediately expelled from the company. Everyone who was pushing like crazy was inspired to go on and do more with a revitalized team. Anyone who was thinking about slacking was thus incentivized not to going forward. People who knew they were out of their depth and might get a 1 or 2 next time started looking for a different job. It was a harsh yet thoroughly effective move.
That, combined with salary raises makes for effective, rewarded teams IMHO.
Of course, if they don't, then you're absolutely right.
They give out free food? They must be desperate.
They drive employees to work for free? They must be desperate.
They give free massages at work? They must be desperate. Etc.
The truth is, all else being equal, salary is an important factor when deciding between offers and the only one that is easily comparable (i.e. if you have an offer from few good companies, like Amazon or Google or Apple, you will only know if you're compatible with the company/team/particular job you landed after you have worked there for a while but salary is a known quantity upfront hence it might tip the scale in favor of the company offering the highest salary).
Which is why offering above average salary is a good hiring strategy for any company, including Google.
I can't think of a reason why a single current Google employee should be displeased with such a raise.
Personally, I think it's great to see a major company recognize that salaries do matter.
I dislike this common attitude in IT to think that money doesn't matter since we're working on cool stuff and can play the Wii on lunch breaks.
20's: money? whatever. I want to work on cool stuff!
30's+: cool stuff? I can do that on my own, whenever I have free time. (And btw, I don't want to work 60+ hour weeks in order that I can maximize that free time.) Give me money! [This is compounded if you know have a spouse and children to take care of financially]
My understanding is that Google "target bonuses" are much, much more than 10% of salary. I've heard 30%-40% as not uncommon. So does that mean that people are actually getting a much bigger raise than the headline indicates? (Or is the "target bonus" something else again?)
Google is essentially powerless to compete with Facebook's stock option potential value.
1) Past peaks aren't relevant to the value of options granted at today's prices. The question is whether GOOG will be higher or lower next year.
2) Options and equity that Facebook gives its employees aren't free. They have a market value, which Facebook is giving in return for an employee's efforts.
The real issue is that Google has more than 10x as many employees as Facebook, and its value is likely to be more volatile, which is good for risk-seeking employees.
Edit: Both Google has about 10x the Market Cap and 10x the employees, so they're at least in the same order of magnitude in terms of how much equity can be given away in each.
GOOG stock right now is making a triple top under the 2007 peak. It's done for. I dare you to go long. I double dare you to buy a call.
The bottom line is I would take any Facebook option at today's prices, over any Google option, period.
It's just too many unknowns. I don't think it makes sense to plan your life around hitting this options jackpot.
Guess what? Facebook is in the same situation Google was in 2003 today.
2 links: http://piaw.blogspot.com/2010/05/compensation-thought-experi... http://piaw.blogspot.com/2010/04/facebook-google-redux.html
Even though some people said that Google paid "below market," when you take into account that kind of bonus (and some stock options), I think I did better than I would have pretty much anywhere else.
Now, is it life changing? Not for me. Maybe if you were only making $20,000 a year, or if you were spending right up to the edge of what you make, an extra 10% of breathing room would make a huge difference in your life. And sure, some people if they change job function or get promoted in a U.S. company can get anywhere from 20-40%, all the way up to multiples of 100% raises. But even though it is not out of this world, a raise like this is nice. It's also nice to get something for "nothing" above and beyond what you're already doing, which is the effect a blanket raise must necessarily have.