Work Here

1. Work Here Heather Whitney April 16, 2013

2. The Motivation vs.

3. Questions and Early Thoughts • Why do we like Google? • Is what we like scalable? • Is what we don’t like fixable? • A possible experiment?

4. Roadmap • Objections to a Google-fied solution to widespread employee dissatisfaction (and some responses) • What motivates Google (and the like) to create the workplaces they do? • Discussion (you help me!)

5. Objections to this Google-fied solution

6. Objections to this Google-fied solution • Reject the premise (Google isn’t so great) • Welfare Capitalism: failed before, it will fail now • Case Study: General Motors • Response: The price of betraying employee trust • Non-union employee orgs: manipulative and anti-union • Case Study: Colorado Fuel & Iron Company • Response: They don’t have to be (and historically haven’t been) all bad 1 2 3

7. Reject the Premise 1 • Google isn’t great for everyone • Example: contractors (and there are a lot) have no voice • “Humane workplaces” come at a cost • Example: the 12 hour work day has returned

8. Welfare Capitalism: failed before, will fail again 2 Welfare Capitalism: Industrial paternalism, typically of non-unionized workplaces. Started around the 1890s and peaked through the 1920s. Involved the voluntary provision by employers to employees of non-wage benefits, greater employment security, and employee representation and voice.

9. Case Study: General Motors 2 Timeline • 1910s – investing $10M/yr in housing program for employees • 1919 – employeesavings and investment plan • 1920s – created four year apprenticeship program • 1921 – blue collar workers disqualified from some company bonus programs • 1931 – rapidly laying off workers and foreclosing on their company homes • 1931 and 1932 – paid dividends in excess of net income to stockholders

10. Response: The Price of Betraying Employee Trust 2 • Chiaki Moriguchi, Did American Welfare Capitalists Breach Their Implicit Contracts During the Great Depression? Preliminary Findings From Company-Level Data, 59(1) Indus. & Lab. Rel. Rev. (October 2005). • Repudiation of implicit contracts positively correlated with the severity of the depression’s impact on the firm • The more effective the internal enforcement mechanisms of welfare capitalism (e.g. joint administration), the less likely the company repudiated the implicit contract • Greater breaches in implicit contracts were associated with both greater employee support for outside unionism and more explicit and rigid employment contrasts after the New Deal

11. Non-union employee representative organizations: just anti-union devices 3 Non-union employee representative organizations: typically employer funded and supported organizations where employees act in an agency function for other employees in dealing with management over issues of mutual concern, including the terms and conditions of employment. • Daphne G. Taras and Bruce E. Kaufman, Non-union employee representation in North America: diversity, controversy and uncertain future, Industrial Relations Journal 37(5) (2006).

12. Case Study: Colorado Fuel & Iron Company 3 Aftermath of the Ludlow Massacre, 1914 (Wikipedia)

13. Response: Company Unions Aren’t Necessarily Union Avoidance Techniques 3 Filene Cooperative Association • There are many examples of non-union employee organizations created for reasons totally independent from union avoidance • Is union avoidance why companies today would do this? When private sector unionization is around 6.3%? • Started in 1905 in Boston • Stated purpose to “enable all of the employees of the corporation to have a sufficient voice in the store government and administration to make it just, considerate and effective” • No union threat (mostly women) • Paternalistic (women and large impersonal institutions) • Comprehensive welfare program included insurance, library, lectures, bank, and social activities. • Took on responsibility for grievance settlements, wage adjustments, and other “union functions”

14. What motivates google to create the work environment it does?

15. Answer: Because It’s In Their Best Interest To Do So • Strategically: A cooperative, engineering-focused commitment model is a model for success • Tactically: Creating cooperation and commitment requires tactically providing the kinds of “perks” and voice they do

16. Strategic: The blueprint you chose has enduring and demonstrable effects on financial success James N. Baron and Michael T. Hannan, Organization Blueprints for Success in High-Tech Start-Ups: Lessons From the Stanford Project on Emerging Companies, California Management Review Vol. 44 No. 3 (Spring 2002).

17. Tactical:Building Out Your Employment Blueprint Requires Tactical HR Choices • Profit-sharing plans reduce turnover and are associated with larger firm investments in training • High compensation (wages) seen as another tool in the HR arsenal • But – this also means HR practice choices aren’t going to be universal (will depend on the employment blueprint chosen)

18. Discussion

19. Food For Thought (to get us started) • What do you think makes these Google-like workplaces great? Do you think they’re great? • Do you think they can be replicated throughout industries or is it some sort of freak geek anomaly? • Do you find the lack of unionization troubling? Or do you see these environments as meaningful alternatives? • Do you think the ban on 8(a)(2) is justified or should we rethink it in a world of already almost non-existent private sector unionization and a country full of workers who are just not happy with the status quo? • Scalable model across industries or is, if you like the Google environment, just a substitute for compensation • What exactly about these work environments is it that we like? Tech? Food? Perks? Good smart people?