Compensation and benefits are the important part of human resource management of an

organization that is mainly divided into four categories such as variable pay, benefits, equity-based
compensation, and increase in salary (Moore, 2008). Google, Inc. is selected to discuss structure of
compensation and benefits. In this report, there will be a discussion of current pay structure of
Google and benchmark activities that attempted by the organization. In addition, compensation and
incentive programs, as well as legal and voluntary benefits, will be also discussed and described that
are offered by Google. In the last, problems with compensation policies, current issues with
compensation and benefits, and several environmental factors that influenced compensation and
benefits programs of the firm will be also described in this report.

compensation packages a business offers to employees affects the company’s recruitment rate,
retention rate and employee satisfaction

Compensation And Benefits Structure Of Google: Pay structure refers to a framework that helps
to assess different jobs, grouping similar types of jobs together, and define formal pay structure for
salary as well as compensation. Most of the organizations are developed formal pay structure within
the organization to effectively manage functions related to payment of basic salary and
compensation (Dorian, 2010). The current compensation and benefits structure of Google includes
compensation committee and different tools to provide benefits that are stock based compensation,
cash holiday bonus, salary hike, and equity incentive for executives. Along with this, the formal pay
structure of the company includes different measures to rewards their employees in order to retain
and motivate existing talented employees (Annual Report, 2010).

Benchmarking Activities For Compensation: In order to identify best among the many in terms of
superior performance, human resource management of Google has undertaken or attempted
various benchmarking activities within the organization (Moore, 2008). In this way, the annual review
of employee’s performance has undertaken by compensation committee and compensation program
manager to determine best performer. Along with this, Google has attempted to benchmarking
activities by collecting and analyzing data related to performance of non-executive employees for
making a comparison with benchmarking measures or standards (Annual Report, 2010).

Competitive Compensation Structure: Google offers a competitive compensation program to their

executives and non-executives employees to provide rewards, compensation, and benefits. To
provide compensation and benefits, Google has established compensation committee within the
organization as part of human resource department that sets parameters for salary increase,
bonuses and stock awards. Under this program, the company offers 10% hike in salary and $1000
cash holidays bonus during the Christmas seasons the incentives for those non-executive
employees, who performs better (Annual Report, 2010). The hike in salary of all employees comes
as a part of competitive compensation plan of the company to reward best performer. Along with
this, Google offers stock based compensation and equity award programs under the compensation
plan to attract new employees and retain existing talented employees (Google, 2012).

The organization offers a competitive compensation structure

Profit Sharing And Stock Ownership Programs: At present, different stock sharing and stock
ownership programs are used by Google’s management to compensate and reward their
employees. In this way, Google uses employee stock option program to motivate their employees for
performing better by rewarding. Due business interest, employee stock plan and equity
compensation or incentives are also available at Google to attract best talent, to create incentive for
executive on improving stock price or increase stock ownership, and to encourage growth of the
business (Google, 2012). Google offers rewards executive officers, Executive Chairman of the Board
of Directors, non-employee members of Board, and employees in the current compensation and
incentive programs. Along with this business assignment help, competitive compensation plans are
also available within the organization in which minimum 10% increase in salary and $1000 cash
bonus for holiday offers by the management for those employees, who performs better (Dorian,
2010). On the other side, under the equity incentive plan, stock ownership offers by the management
of the company to its employees for rewarding and compensating. So, employee stock option, cash
holiday bonus, salary increase, and equity compensation are available at Google as the profit
sharing programs.

Legal And Voluntary Benefits: In the current compensation and benefits structure, Google has
offered both legally mandatory and voluntary benefits to its employees. Under the voluntary benefits,
the company provides a vast range of innovative benefits, facilities, and services to its hard working
employees. In this context, Google offered creative time program in which employees can spend
20% of its total working time on creative activities to get some relaxation from work (Jackson,
Schuler & Werner, 2008). Along with this, Google provides a positive working environment to its
employees though package of voluntary benefits that includes healthcare facilities, gym facilities,
swimming pool facility, and indoor as well as outdoor games facilities. On the other hand, the
company has also offered some legally mandatory benefits to its employees that are benefits for
occupational illness or injury, insurance of employees, salary according to law, and annual paid
leaves (Ferrell & Fraedrich, 2012).

Cost Of Benefits And Communication Tool: The compensation and benefits plan has occurred
additional cost for the organization in different forms. The cost of benefits is estimated as a reward’s
fair value and calculated by using the Black-Scholes-Merton pricing model. The cost of the benefits
is occurred as cost of stock based compensation, cost of cash bonuses, and cost of incentive or
salary hike. In this way, the cost of stock based compensation has occurred as a percentage of
revenue that is 5.1%, 4.9%, and 4.7% in the year 2008, 2009, and 2010 respectively (Annual Report,
2010). The cost of benefits in terms of stock based compensation has increased by $212 million
from 2009 to 2010 for Google due to issuing additional rewards to existing and new employees. On
the other hand, our Google Case Study Assignment Help experts write that, in order to
communicate benefits to employees, Google has established a compensation committee and hired a
compensation manager within the organization, who makes direct communication with employees
through mails for taking feedback regarding current compensation policy (Google, 2012).

Problem With Compensation Policies: There is a problem identified related to measuring

comparability of predominantly male and female occupations. This is a major problem with the
compensation policies of Google. It is because the wages in Google are not equivalent with its total
compensation (Girard, 2009). In addition, there is no agreement on capacity of current job evaluation
methods that are used to evaluate the jobs. Some other problems are faced by Google due to
compensation policies such as amount of comparable condensation cost for employers, reduction in
employment opportunities for women etc.

Environmental Factors Influenced Compensation And Benefits: There are many environmental

factors that influenced compensation and benefits of employees in the Google. Culture difference is
an environmental factor that affected value of compensation and benefits program due to
subconscious beliefs, attitudes and values (Mejia, Balkin & Cardy, 2009). In addition, economic
factors also influenced compensation and benefit plan by affecting politics and power, a division of
wealth and volatility of events such as rates of inflation, currency etc. Taxation policy also affected
due to different structure for different nations. Some countries have more than 50% tax on income
whereas some have no income tax that directly affected compensation and benefits in Google to its
employees in different nations (Kurtz & Boone, 2008). At the same time, competitive labor market
also affect the compensation and benefits in the Google because it requires types of talent sought
and geographical scope of talent market etc to magnetize and sustain talent (Milkovich, Newman &
Milkovich, 2007).

Current Issue Related To Pay Structure: The current issue in Google is found out related to salary
and benefits. In 2008, human resource of Google settled up a private Google group to determine the
reasons behind quitting the organization by the employees. The reason behind this issue is found
that employees are unhappy with the compensation and benefit structure of Google so they were
given their resign (Burtnett, 2011). There were also found out an absence of fringe benefits that
should be provided by Google to its employees. These employees gave their responses that they
can earn more elsewhere because of low pay relative of Google. This issue was raised by the
employees that are unsatisfied with the compensation and other benefits to work in the Google.

Conclusion: Form the above discussion by our assignment help experts, it can be concluded that
the current compensation and benefits structure is helpful for Google to attract new talent and
motivate their executives and non-executive employees. It is also concluded that there are some
factors that influenced compensation and benefits programs of the company due to increase in cost
and additional burden on business. 

In conclusion, Google’s current structure for compensation and benefits is significant for Google since it
helps to sustain as well as attract the best talent in the industry.