Report: Each and Every Google Employee’s 2011 Bonus Tied to Success of Social Products

Since his reinstatement as Google’s CEO, Larry Page has has cut a broad swath, putting engineers, not managers, back in charge and aggressively bidding for Nortel’s patents in the course of just a few days as he brings his quirky but forceful management style to bear. But if this is for real, this may be his boldest move thus far, and one that will be hard to top: The Business Insider‘s Nich Carlson reports that according to a leaked internal memo, as much as 25% of every single Google employee’s 2011 bonus will be determined by the success of Google’s social products this year. Considering the spotty track records of such Google social productions as Orkut, Wave, and Buzz, that would be a lot of potential risk to bring to bear on the bonuses of engineers, executives, and support staff whose work has nothing at all to do with the likes of +1, Google’s new searchwide social button.

Business Insider reports:

“This is a joint effort so it’s important that we all get behind it,” we’re told Page writes in the confidential memo, subject-lined “2011 Bonus Multiplier.”
…
[Page writes] “When we release products, try them and encourage your family and friends to do the same.”

As for how it works:

When Google gave all of its employees a 10% raise and $1,000 bonus last fall, it was part of a move to abolish bonuses that had been based on an annual company multiplier – where employee bonuses were multiplied against some figure correlated to the overall company’s performance. In 2011, the returned company multiplier will be somewhere between .75 and 1.25 – depending on how well Google does in social. That means employees’ bonuses could shrink by 25% if Google doesn’t perform.

So really, the 25% figure may not fully convey how much is at stake here (again, assuming the memo is legit). An employee with a base bonus of $10,000 could get $12,500 if Google hits social out of the park this year or could see their bonus shrunken to as little as $7,500 if social catastrophically flops. Though realistically, it seems unlikely that Google would actually enact so severe a morale-killer as declaring social a total failure, all told, that’s a potential swing of $5,000 — 50% of base in our example! — for a variable over which many employees will have little control, encouraging family and friends aside.

Update: Pic of the memo below: (via TBI)

(Business Insider via Mashable. pic via Chaaps)

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Robert Quigley