This is about much more than Google giving its employees a raise and bonuses, this is also about protecting its assets. Which means retaining talented employees in the face of stiff competition with other Silicon Valley companies, like Facebook and Yahoo.
Google recently surveyed its employees and found that salary is more important than any other component of pay, like bonuses or stock compensation. Based on that feedback, plus that employee retention has been a problem, Google is financially rewarding staff as its way to thank them for their hard work and keep them happy.
First off, it's giving all 23,000 employees worldwide a 10 percent raise, effective January 1.
Every Googler is also getting a $1,000 cash holiday bonus, and Google is paying the taxes on it, so they keep the whole amount. Another financial move is to shift a portion of employees' bonuses into their base salaries, so they receive some in every paycheck. And there will even be merit increases, based on individual performance.
All this extra compensation aims at boosting morale and retaining talent. A concern especially when already about 10 percent of Facebook employees are Google veterans. Plus other Silicon Valley companies have been known to aggressively poach employees from Google as well.
While it certainly costs the company in its profit margins to give these across-the-board raises, it certainly helps that Google has just posted strong third quarter results.