'It changes everything': Facebook insiders are cautiously optimistic about changes to employee bonuses

REUTERS/Francois Lenoir

Facebook's CEO Mark Zuckerberg arrives at the European Parliament to answer questions in Brussels, Belgium on May 22, 2018.

• Facebook is changing employee bonuses to focus on tackling social issues.
• It's a big change, designed to change employees' incentives as the company struggles to move past two years of scandals.
• Business Insider spoke to sources who were cautiously positive about the change.
• It has the potential to produce good results - but will be hard to measure and could have dangerous unintended consequences.

As Facebook struggles to move past its two years of scandals, it's putting its employees' money on the line.

On Tuesday, the Silicon Valley tech giant told employees that it's changing how it calculates bonuses to focus on fixing the biggest issues bedeviling the company - and some people close to Facebook are cautiously optimistic.

Business Insider spoke to three former employees about the news, and all were at least somewhat positive about the change, arguing that it seems likely to incentivize real work on fixing Facebook's problems, but that it might also have unintended consequences. (All asked for anonymity to speak candidly about their former employer.)

Historically, Facebook's twice-yearly bonuses for employees centered around achieving company objectives like growing the userbase, increasing sharing and engagement, boosting revenue, and improving quality. Now, they'll focus on four goals CEO Mark Zuckerberg set for the company in 2019, around tackling social issues, building new experiences, supporting businesses, and communicating transparently.

In a statement announcing the news, Facebook spokesperson Vanessa Chan told Business Insider: "Over the past two years, we've fundamentally changed how we run Facebook. This particular change is designed to ensure that we are incentivizing people to keep making progress on the major social issues facing the internet and our company."

The change to bonuses comes as Facebook has been hit by intense criticism for its role in spreading misinformation online, for violating user privacy and for creating products that encourage excessive screen time at the expense of healthy lifestyles.

Facebook's bonuses have historically played a large part at Facebook in incentivising employees, sources told Business Insider, so the change could help shift the workforce's focus - but they warned that measuring "social impact" will prove incredibly difficult to measure quantifiably.

"This will definitely change things. Most teams at Facebook make decisions based on running tests and measuring how it affects metrics," one source said. "If you take that away, it changes everything."

But, they cautioned, the difficulty in measuring impact could have negative knock-on effects on company culture. "I suspect this will be a feeding ground for politics and infighting unless it comes with some sort of additional empirical rubric. If it's just he said vs she said that's a very different conversation and more of a political skill."

They added: "I see how this move makes sense for shareholders, but definitely also see how it creates a lot of turmoil for employees, and especially those who've come up in Facebooks metrics-focused system."

Another called it "a start."

"There are a ton of good people still working there"

"It will be super subjective, but that's how any performance review process works," the person said. "The most encouraging part of the story to me is that Shrep [as Facebook CTO Mike Schroepfer is known internally] is the one speaking about it. I've only ever known him to be a good person who cares about solving problems. There are a ton of good people still working there. They are the ones who can bring Facebook on the right side of this."

Facebook

Mike Schroepfer

They added: "People were always quite motivated by their performance rating and the corresponding bonus. If this kind of impact truly makes its way into the review process, it can make a difference."

A third said they supported the move - but expressed concerns that impact would be hard to measure, and suggested other changes at the company might be more impactful.

"Glad to see they are making some changes," they said. "However it sounds more vague than ever. And not sure how they will evaluate something so subjective."

Instead, they suggested, Facebook should try to alter its internal culture. The company can be hostile to internal dissent and criticism, something that needs to change to tackle issues in future, they said.

"What I think they need is, internally, they need to have even harder conservation that has opposing views," the person said. "Don't just have hard conversations around what you agree with."

It's also not immediately obvious if the changes will have any unintended effects. Radical changes in employee incentive structures can produce bizarre results: When HP tried to encourage innovation in the early 2000s by financially incentivising the workforce to come up with new ideas, employees sat around for months on end inventing curios like soy-sauce-dispensing chopsticks.

In other words, the second-order consequences of Facebook's new bonus structure may not be fully clear for months - or even years - to come.

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