Culture matters

Food at Google's Mountain View campus (free for all employees) is delicious, healthy, quick (as it's buffet-stylt) and the cost (to Google) is comparable to a restaurant meal.

I find it quite ironic that if Charlie's Cafe was a restaurant, I would (were I not a Google employee) go there all the time. Yet this fabulous service is provided by a tiny department of a huge corporation whose focus is in a totally different area. How can it be that a group with such indirect incentives does so much better than the restaurant business, which has direct monetary incentives to make good food?

Culture is the best answer I can come up with. Google has long prided itself on its food and how it takes care of employees, and the cafes are considered to be a key benefit and an important part of the culture. Still, I find it pretty surprising that this factor is strong enough to outweigh the indirectness of the financial incentives. It's something worth thinking about for those of us who tend to assume that financial incentives are the bedrock of motivating employees.

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The market matters

The Google campus does not exist in a vacuum but in a market. If a cook is bad, he can easily be replaced by another cook. If the person who has the power to hire and fire cooks has the opportunity to eat in the cafeteria every day, that is reasonably good incentive for him to want to hire the best cook available at a given salary. The quality of the food, then, is limited by the quality of the cooks available for hire, and this is not determined by Google. There is a market for cooks as for anything else, and cooks are hired in this market. The limiting factor in the quality of the food lies outside of Google, combined with the all-important how much Google is willing to spend. If other companies have crappier cafeterias than Google, the primary reason is likely that they spend less money on it.

Of course everybody knows that there is a problem with large companies, so if I'm denying that there is a problem then I must be wrong, whatever my arguments. I'm not denying that there's a problem, I'm just questioning whether getting a nice cafeteria is an example of the problem. I think the saving grace of the cafeteria is that it is an encapsulated problem. If you want good food, hire a good cook. If he doesn't work out, fire him and hire another one. The problem is fairly well encapsulated. Yes, I know that there is more to running a cafeteria than cooking, but the same thing that applies to cooking also applies to running a cafeteria. I think the fundamental problem faced by large companies is actually represented by the question of how much money to spend on the cafeteria. What is the appropriate amount of money to spend on a cafeteria? Well, from the perspective of the Google stockholders, it is whatever will maximize profit. But what amount will maximize profit? Well... I have no idea, and I think this is a really hard problem. The effect on profitability is so indirect. So I think there you have a real problem faced by sufficiently large companies.

Incentives

I suspect that the financial incentive is more direct and more powerful than you seem to think it is. It's not about attracting the marginal employees--it's about keeping the employees in the office for marginal hours. People who would never work an extra hour for $10 in cash will do it for $10 in free food. I wouldn't at all be surprised if Google got $5 in extra labor for every dollar they spent on food.

I want to work for google!

I want to work for google! If only I had better credentials! It seems to be such a heavenly place to work. Good motivators = good output. No wonder google is going up.

Cost != Price

The cost, to Google, is comparable to a restaurant meal. So, a restaurant serving the same meal would have to charge the cost of a restaurant meal plus profit and taxes, and would charge more than the market would care to pay.

Plus ditto Brandon Berg, people can spend more time at work with less impact on their outside-of-work lives thanks to the on-campus food and other amenities. If Google is rolling the benefit of greater productivity into the food cost then yeah they are getting engineers for the hourly wage of one-tenth of a fry cook. Sweet!