Staff morale on the rise? Google bets it will be

By Crayton Harrison  |   2008-7-11  |     NEWSPAPER EDITION

THE day after a company's stock rises, employees are more optimistic about the projects they're working on. You can bet on it.

And at Google Inc, they do.

That's what researchers found in the behavior of employees on an internal trading system the company designed, Bloomberg News reported. Using a faux currency called the Gooble, 2,000 workers have wagered on about 370 subjects, from the success of the company's Gmail service to the quality of a new "Star Wars" movie.

Academic studies show these so-called prediction markets work as financial modeling tools. Google managers use the results as a reference in strategy meetings and crunch the data to see how employees behave. After finding traders got bullish about meeting goals following a climb in the stock, Google started examining how productivity and optimism are connected.

"It may be that employees also do their jobs differently on that date," said Bo Cowgill, the manager at Mountain View, California-based Google who worked on the research. "They may have other expressions on optimism - the hours they work or how much stuff they manage to get done, the scores they give to candidates being interviewed that day."

Because markets of this kind are based on anonymous bets, employees can weigh in without worrying what managers will think, said John Maloney, who helps organize research conferences on the subject.

"They work quite well," said Maloney, whose San Francisco company Net Intelligence promotes academic talks. "If you can find a problem that has a number of stakeholders in it where it's very difficult to figure out the outcome, you'd be well served by a prediction market."