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.
So you need to rely on mid-level managers to identify the top performers, but each mid-level manager is likely to be biased towards their own staff and their area of responsibility. And of course the mid-level managers may not be in the top 10% and so may be unable to identify who the star performers are anyway. So then you try to add some kind of normalisation scheme, maybe you take the top 10% from each department. Except that doesn't account for one department being better/more important than another. So you have to add that weighting in,... and you end up with some complex system that no-one really understands or agrees with.
Add to that the evidence that performance related pay isn't always beneficial and this becomes a very difficult problem.
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.
Well I agree, but there is a flip side to that which is where you have a number of people on your team who are not carrying their weight and are causing the high fliers to be held back, perhaps even feel complacent as though their contribution isn't worth pushing for if others can slack off. Clearly, hiring the right people to begin with is crucial but standards drop as companies get bigger.
If done right, the myspace approach can be executed correctly with little-to-no culture of fear.. everyone who scored high has nothing to fear (and even rewarded with pay rise) and anyone who has something to fear is (hopefully) kicked out.
Of course, if they don't, then you're absolutely right.