Work Rules!

Work Rules! Plot Summary

Introduction

The first time I stepped into Google's colorful Mountain View campus, I was struck not by the famous slides or free gourmet food, but by the energy of the people. A software engineer excitedly showed me a project she'd been working on during her "20% time" – Google's policy allowing employees to spend one day a week on passion projects. Her eyes lit up as she explained how this side project might help millions of people. This wasn't just a job for her; it was a mission. Behind Google's extraordinary success lies something far more valuable than its algorithms or business model – its revolutionary approach to managing people. While most companies treat HR as an administrative function, Google transformed it into a laboratory for human potential, using data and experimentation to discover what truly motivates people and enables their best work. The principles they've uncovered challenge conventional wisdom about everything from hiring and performance management to compensation and workplace culture. These insights aren't just theoretical – they've been tested and refined in one of the world's most successful companies, creating an environment where exceptional people can do exceptional work. The lessons are surprisingly universal, offering a blueprint for anyone who leads teams or organizations of any size.

Chapter 1: The Founders' Vision: Building a Culture of Trust and Innovation

In March 1995, a twenty-two-year-old Larry Page visited Stanford University as a prospective PhD student in computer science. His campus tour guide was Sergey Brin, a twenty-one-year-old already enrolled in the program. Far from exchanging polite small talk, the two quickly developed a friendly yet argumentative rapport, debating ideas with an intensity that would later define their partnership. When Larry joined Stanford a few months later, they reconnected and began collaborating on a project that would eventually become Google. What made Google's founding story unique wasn't just their technical brilliance but their personal histories and values. Larry's grandfather had been an autoworker who carried a homemade weapon to protect himself from his own company during labor disputes. Sergey's family had defected from the Soviet Union in 1979, seeking freedom from Communist oppression and anti-Semitism. These experiences instilled in them a commitment to creating a company where employees would be treated with dignity and empowered to do meaningful work. Both founders had been educated in Montessori schools, which shaped their approach to management in profound ways. The Montessori method encourages children to question everything, act on their own initiative, and create freely. This educational philosophy manifested in Google's culture, where employees are given remarkable freedom to pursue their passions and challenge conventional thinking. As former Google executive Marissa Mayer observed, "You can't understand Google unless you know that both Larry and Sergey were Montessori kids." When Google went public in 2004, the founders included a letter in the prospectus that made their commitment to employees explicit: "Our employees, who have named themselves Googlers, are everything." The letter promised unusual benefits and emphasized that Google would be organized around attracting exceptional talent. Most importantly, it declared that "Talented people are attracted to Google because we empower them to change the world." The founders' vision created a company where people feel ownership not just of their specific jobs but of Google itself. They deliberately left space for others to act as founders in their own right, launching initiatives that the original founders never imagined. This approach has proven remarkably effective at unleashing human potential. When people are trusted, given meaningful work, and empowered to make decisions, they respond with creativity and commitment that no amount of traditional management could extract. The lesson is clear: culture isn't just about perks or office design; it's about creating an environment where people can do their best work in service of a mission they believe in.

Chapter 2: Hiring for Excellence: Finding Needles in the Talent Haystack

Imagine you've won a $656 million lottery jackpot and decide to build a championship baseball team. You have two options: hire the best players on the planet, or take the Bad News Bears approach—assembling a ragtag team of misfits and molding them into winners through coaching and motivation. Which would you choose? The New York Yankees have demonstrated the power of the first strategy, winning 27 World Series by consistently paying top dollar for the best talent. In fact, 38 percent of World Series since 1998 were won by one of the two highest-paying teams. At Google, the founders recognized early that their greatest constraint on growth would be finding exceptional people. Unlike the Yankees, however, Google didn't have the luxury of simply buying the best talent. For years, the company paid among the lowest salaries in the industry. As late as 2010, most people who joined Google took significant salary cuts, some of 50 percent or more. Yet the company still managed to attract remarkable talent by focusing on an unorthodox approach to hiring. Google's hiring philosophy starts with two big changes to conventional thinking. First, hire more slowly. Only about 0.25 percent of applicants receive offers—making Google nearly twenty-five times more selective than Harvard. This extreme selectivity exists because the best performers aren't just marginally better than average—they're exponentially better. As Alan Eustace, Google's SVP of Knowledge, explains: "A top-notch engineer is worth three hundred times or more than an average engineer." The second change is to only hire people who are better than you. Every person hired should improve the average. This means waiting for the right person rather than settling for someone merely adequate. Karen May, VP of People Development, turned Google down for four years before finally joining. The company was willing to wait because she brought emotional intelligence and counseling skills that complemented existing strengths. What makes Google's approach to hiring particularly powerful is how it combines rigorous data analysis with a deep respect for human potential. The company constantly experiments with its hiring process, measuring which interview questions actually predict job success and which are merely interesting but useless. They discovered, for example, that brain teasers ("How many golf balls would fit in a school bus?") have zero correlation with job performance, while structured behavioral interviews ("Tell me about a time you had to make a difficult decision with limited information") are highly predictive. The lesson for any organization is clear: your people are your most important asset, and no amount of strategy or technology can compensate for mediocre talent. By treating hiring as your most important decision and using data rather than intuition to guide that decision, you create the foundation for exceptional performance. The investment in finding the right people pays dividends for years to come, as each great hire raises the bar for future candidates and contributes to a virtuous cycle of excellence.

Chapter 3: Empowering Teams: How Google Removes Manager Power

Does your manager trust you? If you thought you were ready for a promotion, could you promote yourself? If you wanted to spend one day a week working on a side project, could you? These questions get at the heart of Google's approach to management: deliberately taking power away from managers and giving it to employees. At Google, managers cannot unilaterally hire someone, decide on pay increases, determine promotions, or make many other decisions that managers traditionally control. Instead, these decisions are made by committees, peers, or independent teams. This approach stems from a deep skepticism about power and how it can be abused. As Lord Acton wrote in 1887, "Power corrupts; absolute power corrupts absolutely." Google's solution is to cleave this Gordian knot by removing sources of power from managers. This approach creates an environment where employees feel and act like owners rather than subordinates. To reinforce this, Google eliminates status symbols that might create hierarchy. There are only four meaningful, visible levels: individual contributor, manager, director, and vice president. Executives receive the same benefits and perquisites as new hires—no executive dining rooms, parking spots, or special compensation packages. When Google introduced a deferred compensation program, it made it available to everyone rather than just senior executives. Google also relies heavily on data rather than managerial opinions to make decisions. This transforms managers from providers of intuition to facilitators in a search for truth. One of the company's core principles has always been "Don't politick. Use data." As Hal Varian, Google's chief economist, explains, "Relying on data helps out everyone. Senior executives shouldn't be wasting time debating whether the best background color for an ad is yellow or blue. Just run an experiment." Beyond removing power and using data, Google gives Googlers uncommon freedom to shape their work and the company. The company's version of 3M's "15 percent time" is "20 percent time," where engineers can spend 20 percent of their week on projects outside their day jobs. Gmail, Google News, and AdSense all began as 20 percent time projects. As Ryan Tate of Wired explained, "Twenty percent time has always operated on a somewhat ad hoc basis, providing an outlet for the company's brightest, most restless, and most persistent employees." The power of this approach lies in how it transforms the relationship between employees and the organization. When people are treated as trusted partners rather than subordinates to be controlled, they respond with greater creativity, commitment, and ownership. By distributing decision-making and eliminating traditional power structures, Google has created an environment where good ideas can come from anywhere and people feel empowered to make a difference. This doesn't mean abandoning accountability or structure; rather, it means redesigning systems to harness the full potential of every person in the organization.

Chapter 4: Performance Management: Growth Through Feedback, Not Ratings

In the Simpsons episode "The PTA Disbands," Lisa Simpson panics when her school closes due to a teachers' strike: "Look at me! Evaluate and rank me! I'm good, good, good, and oh so smart! Grade me!" There's a little bit of Lisa in all of us. Our first twenty years are spent being compared to others—lined up from shortest to tallest, graded, ranked in our classes, and measured against national averages. It's no wonder that as adults we re-create those same conditions in our work environments. Google's approach to performance management has evolved significantly over time, driven by data and experimentation rather than tradition. The company starts with goal setting through OKRs (Objectives and Key Results), a practice introduced by board member John Doerr who had seen it used successfully at Intel. OKRs are specific, measurable, and verifiable; if you achieve all your results, you've attained your objective. Importantly, Google deliberately sets ambitious goals that people won't always achieve. As Larry Page often points out, "If you set a crazy, ambitious goal and miss it, you'll still achieve something remarkable." Until 2013, every Googler received a performance rating score at the end of each quarter on a 41-point scale from 1.0 (awful) to 5.0 (astounding). This system created an illusion of precision but didn't actually help managers make better decisions about pay. In fact, when it came time to set raises or bonuses, managers changed the pay outcomes two-thirds of the time, regardless of the ratings. The company was also spending up to twenty-four weeks each year either assigning ratings, calibrating ratings, or communicating ratings. After extensive experimentation, Google moved to a 5-point rating scale: needs improvement, consistently meets expectations, exceeds expectations, strongly exceeds expectations, and superb. The company found that with fewer rating categories, managers became more likely to use the extreme ends of the rating system, better reflecting actual performance differences. This simplified approach provided employees with more consequential feedback, replacing the murky differences between a 3.2 and a 3.3 rating. What makes Google's approach to performance management particularly effective is how it separates feedback conversations from compensation discussions. Annual reviews happen in November, while pay discussions occur a month later, and stock grant decisions are made six months after that. This separation is crucial because when managers sit down to give employees their annual review and salary increase simultaneously, employees focus on the extrinsic reward (the raise or rating) and learning shuts down. As Prasad Setty explains, "Traditional performance management systems make a big mistake. They combine two things that should be completely separate: performance evaluation and people development." The lesson here extends far beyond Google's walls. Effective performance management isn't about complex rating systems or annual rituals; it's about creating conditions where people can receive honest feedback, learn from it, and grow. By separating development from evaluation and focusing on specific, actionable insights rather than numerical scores, any organization can transform performance management from a dreaded administrative exercise into a powerful tool for individual and collective improvement. The goal isn't perfect ratings; it's continuous growth.

Chapter 5: Learning from Extremes: The Two Tails Strategy

Your team has tails. Anything you can measure follows some kind of distribution from low to high, small to big, near to far. In a classroom, students can line up from shortest to tallest, with most clustered in the middle and a few at either extreme. These extremes—the "tails" of the distribution—represent your biggest opportunity to improve performance, though most organizations overlook this insight. At Google, the company regularly identifies the bottom-performing 5 percent or so of employees. But unlike Jack Welch's famous "up or out" model at GE, where the bottom 10 percent were fired each year, Google takes a different approach. The goal is to tell every person in the bottom 5 percent that they are in that group, but with a message of help rather than threat: "You are in the bottom 5 percent of performers across all of Google. I know that doesn't feel good. The reason I'm telling you this is that I want to help you grow and get better." This approach of "compassionate pragmatism" recognizes that poor performance is rarely because someone is incompetent or a bad person. It's typically a result of a gap in skill or will. Google offers a range of training and coaching to help struggling performers build their capabilities. If that doesn't work, the company helps the person find another role within Google where they might thrive. The result is that people either improve dramatically or leave and succeed elsewhere. Either way, teams improve significantly. While focusing on the bottom tail is important, studying the top tail—the very best performers—is equally crucial. Google's People and Innovation Lab (PiLab) was founded to advance the science of how people experience work. One of their most influential projects was Project Oxygen, which set out to prove that managers don't matter and ended up demonstrating that good managers were crucial to team success. The project began by comparing the best and worst managers at Google, looking at both performance ratings and Googlegeist results (employee survey data). The researchers found that teams with the best managers performed 5 to 18 percent better on a dozen dimensions compared to teams with the worst managers. To prove these differences were due to the managers themselves rather than just having stronger teams by chance, they looked at what happened when Googlers switched teams. Those who moved from good managers to bad ones scored significantly lower on 34 of 42 survey items, while those moving to better managers saw significant improvements. The power of the two tails approach lies in its efficiency and impact. Rather than trying to move everyone up a little bit, focusing on the extremes produces dramatic improvements with targeted effort. By helping those at the bottom improve or find better fits and learning from those at the top, organizations create a virtuous cycle of continuous improvement. This strategy doesn't require massive resources or complex systems; it simply requires the courage to have honest conversations and the humility to learn from both success and struggle. The result is not just better performance but a culture where excellence is celebrated and everyone has the opportunity to grow.

Chapter 6: Compensation Philosophy: Why Paying 'Unfairly' Works

When Google was preparing for its initial public offering in 2004, Wayne Rosing, the company's first VP of engineering, gave a memorable speech to the engineers. After talking about staying true to values and focusing on users, he concluded with a warning: "If after we go public I see any lamborghinis in our parking lot, you better buy two of them because I'm going to take a baseball bat to the windshield of any parked here." This ostentation aversion reflected Silicon Valley's engineering culture, where the ethos has long been "Work hard, but don't show off." Despite this cultural preference for understatement, Google has always taken compensation seriously. The company has spent more time thinking through compensation issues than any other people issue except recruiting. Over the years, Google developed four principles that guide its approach to rewards: pay unfairly, celebrate accomplishment rather than compensation, make it easy to spread the love, and reward thoughtful failure. The first principle—pay unfairly—challenges conventional wisdom. Most companies design compensation systems that encourage their best performers to quit by limiting how much an individual's pay can deviate from market rates. A top performer might get larger raises initially, but these increases slow down and eventually stop as they approach the upper limit of their salary range. The rational response for exceptional performers is to leave and negotiate based on their true worth in the free market. Google takes a different approach, recognizing that performance follows a power law distribution rather than a normal distribution. Research by Ernest O'Boyle and Herman Aguinis found that "ten percent of productivity comes from the top percentile and 26% of output derives from the top 5% of workers." At Google, two people doing the same work can have a hundred times difference in their impact and rewards. The range of rewards at almost any level can easily vary by 300 to 500 percent, with plenty of room for outliers. For this approach to work, managers must understand the reward system well enough to explain to recipients why a reward was so high and what any employee can do to achieve similar results. The allocation of extreme awards must be just—both distributively (the end distribution is fair) and procedurally (the process for deciding is fair). Without this justice, rewards breed jealousy and resentment rather than motivation. Google learned this lesson the hard way with its Founders' Awards program, which was designed to give extraordinary rewards to teams that created tremendous value for Google. Despite good intentions, the program made Googlers less happy. Many viewed the awards as unattainable, there were contentious debates about who should be included, and even winners were sometimes disappointed if they received less than they expected. The company eventually shifted from monetary awards to experiential awards—sending teams to Hawaii or providing trips to health resorts—which proved much more effective at making people happy. The insight at the heart of Google's compensation philosophy is that true fairness isn't about treating everyone the same; it's about recognizing and rewarding exceptional contributions in exceptional ways. By aligning rewards with impact rather than job titles or tenure, organizations can create environments where people are motivated to do their best work. This doesn't mean abandoning principles of fairness; rather, it means redefining fairness based on contribution rather than equality. When done transparently and justly, paying "unfairly" can be the fairest approach of all.

Chapter 7: Creating Community: Low-Cost, High-Impact Benefits

People often assume Google spends a fortune on special perks for employees, but aside from cafés and shuttles, most Google programs are free or very close to it. The company offers a wide range of on-site services like bike repair, car washes, dry cleaning, haircuts, and grocery delivery - but Googlers pay for these services themselves. Google simply provides permission for entrepreneurs to come on-site, sometimes negotiating volume discounts on behalf of employees. These services are easy to establish. In the Chicago office, a Googler asked a local nail salon owner if she would set up shop in a conference room each week so Googlers could get manicures at the office. Now it's a Googler-maintained perk that costs Google nothing more than the coffee the manicurist drinks. All it took was a culture where employees knew they could suggest new programs and shape their own workplaces. Beyond practical services, Google creates community through events and groups. In 2012, they held their first annual "Take Your Parents to Work Day," welcoming over 2,000 parents to the Mountain View office. The day includes product demonstrations, campus exploration, and a special TGIF hosted by the senior team. Parents are incredibly proud of their children and, surprisingly, most have no idea what their children do for a living. Helping them appreciate the impact their children have is heartwarming, even when those children are fifty years old. Google also supports over 2,000 email lists, groups, and clubs, ranging from unicycling and juggling clubs to book clubs and financial planning groups. Employee Resource Groups (ERGs) like the Black Googler Network, Gayglers (focused on LGBTQ+ issues), and VetNet (Veterans Network) host events, provide support, and engage in community outreach. These groups organize activities from pride marches to family health days for local communities, creating connections both within Google and with the broader world. What's particularly noteworthy is that there's no expectation or requirement that people participate in any of these activities. Just like in school, some people join clubs, some play more than others, and some just want their own quiet place to get work done. The value comes from creating an environment where people can connect in ways that matter to them. The magic of Google's approach to community building is how it transforms the workplace from merely a place to earn a paycheck into a place where people feel they belong. By creating spaces for connection around shared interests, values, and needs, the company fosters relationships that transcend work assignments and organizational boundaries. These connections not only make work more enjoyable but also create the conditions for collaboration and innovation. When people know and trust each other as whole human beings, not just as colleagues, they're more likely to share ideas, ask for help, and take creative risks together. The lesson is clear: building community doesn't require lavish spending; it requires listening to what people want and creating the conditions for them to connect authentically with one another.

Summary

Throughout this journey inside Google's people machine, we've explored how a company built on a foundation of trust, transparency, and purpose has created one of the most innovative and employee-centered workplaces in the world. From Larry and Sergey's original vision of a company where work was meaningful and employees felt free to pursue their passions, to the sophisticated data-driven approaches that now guide everything from hiring to management development, Google has consistently pushed the boundaries of what's possible in organizational design. The most powerful insight that emerges is that treating people well isn't just the right thing to do—it's good business. By investing heavily in finding exceptional talent, giving employees unprecedented freedom, removing traditional sources of managerial power, and rewarding people based on their actual contributions rather than arbitrary standards, Google has built a self-replicating talent machine that continues to drive innovation and growth. The company's approach demonstrates that when you trust people and give them the resources they need to succeed, they will amaze you with what they accomplish. What makes this story particularly inspiring is that many of Google's most effective practices don't require enormous resources. Creating a mission that matters, being transparent with information, giving employees voice in how the company operates, learning from your best and worst performers, and recognizing accomplishment rather than just compensation—these are principles that any organization can adopt. The courage to trust your people, to be honest with them even when it's difficult, and to create systems that reinforce rather than undermine their intrinsic motivation is available to anyone willing to challenge conventional management wisdom. In the end, Google's success isn't about free food or colorful offices—it's about creating an environment where remarkable people can do remarkable work together.

About Author

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Laszlo Bock

Laszlo Bock leads Google's people function, responsible for attracting, developing, retaining, and delighting "Googlers." He believes that giving people freedom and supplementing our instincts with hard science are steps on the path to making work meaningful and people happy. Laszlo's first book, WORK RULES!, is available for pre-order now and will come out on April 7, 2015. As of January 2015 it has already been recognized by THE WASHINGTON POST ("12 leadership books to watch for 2015"), THE TELEGRAPH ("Top business books to read in 2015"), THE HUFFINGTON POST ("The 15 new books to read in 2015") and VENTURES AFRICA ("First a reader, then a leader").During Laszlo's tenure, Google has been named the Best Company to Work For more than 30 times around the world and received over 100 awards as an employer of choice. In 2010, he was named "Human Resources Executive of the Year" by HR Executive Magazine. He has testified before Congress on immigration reform and labor issues and been featured in The Wall Street Journal, the New York Times, the PBS Newshour and on the Today Show. Laszlo's earlier experience spans executive roles at the General Electric Company, management consulting at McKinsey & Company, start-ups, non-profits, and acting. He (briefly) held the world record for Greek Syrtaki dance (along with 1,620 others).

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