Google's CFO Ruth Porat is pushing “creatives” to bring costs under control

In other words, pay some employees below market rate, add in worthless stock options, and so long as you keep the "free" soda and dry cleaning cleaning coming (at a 2-4x cost over what they'd pay for themselves) coming, they're fine. Even if the fee they're paying is far more expensive than just going out to get those services themselves.

Once that ends, growth hacking ends and everybody gets burned.

A more cynical benefit of sodas/snacks/exercise classes/laundry/dogwalking/social events provided by the company is that it makes leaving a lot less appealing. A competitor can easily offer a higher salary, but when departing means completely restructuring an employee's daily routine, it can be a powerful force keeping people in place.

If you are 10 years old and you see your dad replacing his BMW by a beaten up Toyota, yes, he could just have decided to stop taking on so much credit, but chances are you'll think he's not doing well, even if he reassures you it's for perfectly valid reasons. So you mentally brace for giving up on that new bike you wanted for Christmas.

"They've cut the kitchens."

"Really? We just got an extra Jura coffee machine in every conference room..."

"Interesting, sounds like your cash flow is good at the moment. Are you guys looking?"

And the earlier you leave, the less affected you are - you benefit from the still strong brand, you get decent garden leave, you have little competition on the job openings and your former colleagues will be nice to you in case they need a hand out of the sinking ship later.

I often wonder if the management team knows this. The people who are really good are also often:

1) more expensive

2) less likely to tolerate bullshit

3) will not be as submissive and willing to follow orders from the new managers

Since more bullshit is coming down the pipeline and orders from new managers will have to be followed closely, they do something like this, know exactly what effect it will have.

It is a variation of "we are not laying you off, just moving you to the basement". No company wants to be known for laying of the creator of language X, or famous technology Y. But if it seems they move on from their free accord then the company saves face.

However, I think I would prefer a higher paycheck every pay period instead of free lunch or soda and so on. What I don't have faith in is that the money saved from free stuff there will directly go to my paycheck.

For example, one way to fix the problem, at least for current empployees is to immediately give raises according to how much it was perceived it was costing the company in free soda or lunches, but that just doesn't happen I guess.

  But the really good people, the people who constantly invent new things and have the skills to communicate their ideas and get them implemented, those people can work literally anywhere and if they can do what they want to do anywhere else, they will leave. So this "tax" of free soda and snacks is just a cost of doing business. And if you look at the revenue per employee, you do yourself no favor trying to maximize that number beyond the value that meets your net income numbers.

I mean, demonstrate that there are 'really good people who constantly invent new things' that are in some way better than other people.

I accept that it's convention (or touch stone) amongst SV participants and developers on HN. And we all like to believe we're especially talented. But, then if this is true it must also be true for CEO's right, there are some that are 10x more talented and therefore they should get Y more salary etc.

I agree with your underlying point "it's a cost of doing business", but not with your reasoning - to me the reasoning is that it's the social signaling for the industry: if everyone else gave away free shoes then company X hiring people has to do the same or be so 'different' in some way that it can go against the grain. As you say everyone totes up the benefits/draw-backs of their work place, team and tasks to decide if a role is good for them - I think that's quite a messy process and more than simply to do with whether there's free soda!

  >And if you look at the revenue per employee, you do yourself no favor trying to maximize that number beyond the value that meets your net income numbers.

1) Greedy bankers who were trying to maximize their bonuses by selling high risk instruments. 2) Predatory home loans that allowed for the financial instruments to exist and all the people associated (the lenders, the salespeople, etc.) 3) A completely backwards system for how the ratings agencies work and how their greed outweighed their duty to correctly rate instruments. 4) Greedy home owners who wanted to "keep up with the Jones" by having bigger and bigger homes and didn't understand their risk exposure. 5) While this is not explicitly mentioned by Lewis in his book, I think he makes it quite clear that simple regulation could've cut one of the previous four pillars from propping up the crisis.

Regardless, I thought Lewis' book was more of a treatise on how incredible human greed in all facets of the economy caused the collapse. Not just the investment banks, although they are certainly partly to blame.

A rising tide raises all ships.

I wouldn't say all (or even most) of the above applies to Google, but I do believe that for large corporate systems in general, these sorts of things become a major issue when you have half a million employees and hundreds of subsidiaries/divisions.

Just trying to make things clearer.

note: There are of course many aspects that would make this a bit of a difficult thing to study, mergers and acquisitions being just one for instance, and at least for small businesses, "birth" and especially "death" dates are incredibly hard to pin down. But still something I've been interested in for a while.

Furthermore, statistics show that there is a positive correlation between companies rewarding executives in a bull market, and punishing executives holding the exact same positions in a declining market, thereby making luck and timing, not skill, a main determinant of who eventually makes money (the correlation between how well a company performs and the perceived skill of its executives was determined to be around 10-20%).

I think there is a difference between how we try to compensate for the loss of something irreplaceable (a life) or disincentive negligence, and the price of something bought and sold.

I wish I could read this without thinking of human sacrifice on a scale unseen since pre-Columbian meso-America.

Even by your logic this is insane. She's paid more than 2,000,000 a year, and therefore should not be sacrificing herself from a pure economics standpoint.