“A billion hours ago, modern Homo sapiens emerged. A billion minutes ago, Christianity began. A billion seconds ago, the IBM personal computer was released. A billion Google searches ago…was this morning.”

So said Hal Varian, Google’s chief economist, about a year ago. This quote opens Work Rules!, Laszlo Bock’s inside account of how Google works and how Google workers work. Bock heads up what Google calls “people operations” (what other companies call HR), and in Work Rules!, he has written a remarkable account of how Google hires, supervises, compensates, and organizes its workers and its work.

The book is remarkable for three reasons. The company it describes is remarkable for the effect it has had on everyone’s life. The company it describes is remarkable because its management practices are so distinctive. And the book is remarkable in its willingness to be transparent about what Google does in a highly competitive world in which you would imagine that companies would keep their “secret sauce” hidden from view. On top of that, the book is a pleasure to read—full of useful detail and almost completely free of the meaningless jargon that dominates most management tracts.

Bock tells us that before coming to Google, he had become frustrated while working as a management consultant because “leaders always spoke of putting people first, and then treated them like replaceable gears” (p.2). Not so at Google. At Google, hiring is done with enormous care (and Bock takes us through the excruciating hiring process, a real challenge since it’s about 100 times harder to get a job at Google than it is to get admitted to Harvard), but once hired, employees are treated as individuals, and given enormous latitude about how they get their jobs done. As executive chairman and former CEO Eric Schmidt says, “managers serve the team.”

So what’s Google’s recipe for success? There are many pieces to this puzzle, which Bock does a wonderful job elucidating. I will highlight what I take to be the most essential and the most distinctive pieces.

1. Be mission driven in a way that makes sure that the mission is embodied throughout the organizations activities. Every company has a “mission,” but most of them are so vague or so unserious that no one inside the company, and few people outside the company take the mission seriously. Bock thinks it all starts with mission. You might think that it’s easy to be mission driven when you actually have an admirable mission, as Google does. But as research by both Adam Grant and Amy Wrzesniewski (discussed by Bock) has shown, it’s actually not all that hard to develop a mission that employees can be proud of once you appreciate its importance.

2. Go easy with the rules and trust employees to do the right thing without them. The title of the book is a bit ironic. There are very few work rules at Google. Bock’s belief, well confirmed, I think, by both laboratory research and the practical experience of enlightened companies, is that rules neutralize judgment, creativity, and motivation and so end up being counterproductive. Work rules! (i.e., is deeply satisfying) if you don’t have too many work rules. Cooks follow recipes; chefs create masterpieces. We want more chefs and fewer cooks, but we won’t get them in an environment that is weighed down by rules.

3. Start out with the assumption that people are basically good, and “enough courage to treat your people like owners instead of machines. Machines do their jobs; owners do whatever is needed to make their companies and teams successful” (p.15). I think this is a key to Google’s enormous and ongoing success. If you assume that people are basically good and that they want to do work that is meaningful and significant, then you create a nourishing environment that leaves them free to do their best. If you assume that people are basically lazy and out to rip you off, then you create an environment in which rules and incentives are used to rein in and control the bad actors, to keep them from exploiting you. Bock’s deepest point is that both of these starting assumptions are, in a way, self-fulfilling, in that a work environment that starts out with positive assumptions about human nature creates conditions in which good people achieve and thrive, whereas a work environment that starts out with negative assumptions about human nature creates an environment in which workers will only do what is required of them, and even less if they think they can get away with it. If readers take nothing away from Bock’s book than this one profound point, the book will be worth their time.

4. Separate feedback from consequences. I can’t emphasize how important and counterintuitive this principle is. Imagine that you’re a teacher of fifth graders. Your performance is evaluated via standardized tests. And that evaluation has consequences. You might get fired. You might get a bonus. You might get transferred to another school. Your whole school might get shut down. What happens under these conditions? You learn how to game the system, by, say, teaching to the test. As a result, the evaluation tool becomes close to useless.

So what does one do? Surely, we need some way to measure teacher effectiveness, but the tools we use seem vulnerable to corruption. Well, what happens if the school district continues using the test, but now only to provide informative feedback that can guide teacher improvement. Bonuses or dismissals are off the table, or at least in other hands, based on other criteria. Now, the teacher has no reason to game the system and corrupt the evaluation. I’m not suggesting here that standardized tests are the right tool for feedback and correction. What I am suggesting is that there is no chance that they will be the right tool when significant material consequences ride on the outcome.

So what does Google do? It is painstaking in its measurement and evaluation, providing detailed feedback that no standardized test can match. But beyond that, it works hard to keep the consequences of the evaluation pure. The aim of the evaluation is to guide improved performance. Decisions about salary, promotion, stock options, etc. are in other hands. As a result, employees have little or no reason to game the evaluation so as to come out looking like better performers than they really are. In addition, even with the worst performers, the aim is to guide improvement and not to show them the door. Based on the story Bock tells in the book, it’s pretty hard to get fired by Google. The company gives employees every chance to succeed.

5. Be transparent. Let employees know what’s going on, even in parts of the company that have nothing to do with their own work responsibilities. Why is this important? Because it helps build an atmosphere of trust and a spirit of joint commitment to a common mission. It says to employees that they’re all in this together. How strikingly different this attitude is from the silo-like environment of most large companies. Divide and control. Well, since Google isn’t all that interested in controlling, it tries to unite, and thus benefit from both improved morale and occasional unexpected insights from unlikely sources within the company. I think Bock’s book is a testimony to Google’s commitment to transparency. As I read it, I was surprised again and again that he was permitted to disclose company practices to the larger world.

6. Be willing, even eager, to experiment. Google employees must sometimes feel like lab rats. The company is willing to try new things, but it tries them in the way that scientists do research. Design a study, treat one group of people one way, a second group another way, a third still another way, and carefully measure the differences in performance quality and employee satisfaction. Experiment with tools to encourage people to take care of their bodies. Experiment with various forms of compensation and various ways to acknowledge excellence. Pretty much everything is on the table. And respect science. Derive your experiments from existing research literature and not from an idea that an executive had one morning while shaving.

7. Encourage and acknowledge intelligent failures. Human beings learn much more when things go wrong than when things go right. Growth and development come from mistakes. But people have to feel free to make mistakes. Otherwise they won’t take chances. Google encourages its people to take thoughtful chances. Failure in the short run may be the key first step to spectacular success down the road.

I’ve said a lot about the book, and I could say more, but reviews have to end some time. There is plenty of rich material beyond what I’ve discussed that ought to get any manager, at any kind of organization, thinking hard about how her own organization works.

It should be obvious that I think Google is a spectacular company and that Bock has written an extraordinary book. But I can hear the naysayers already. “Sure, it’s all well and good for a company like Google, with 30% margins, supersmart employees, really neat projects, and a near monopoly on its main source or revenue to operate in this way. It’s got more money than it knows what to do with.” Well, fair enough. Not every company can provide gourmet food to 50,000 people for free. But Bock points out that many of Google’s distinctive practices have either negligible costs or no costs. And he points out other companies, operating in highly competitive, low-margin businesses, that share many aspects of Google’s philosophy. These companies are typically both industry leaders and reliably appear on “best places to work” lists. That correlation is certainly not an accident. So a Google-like commitment to a mission driven, high autonomy, trusting environment that assumes the best of people is, or could be, a live option for almost any organization.

This fact leads to a puzzle, with which I’ll end the review. If doing things the “Google way” leads to happier and more productive employees, why is the “Google way” still so rare? Why hasn’t the market pushed less efficient and effective, command/control, incentive driven organizations out of business? This is a real mystery, enough of one that I’ve written a whole book to try to explain it. That book, Why We Work, will be out in the fall, but the story it tells is that businesses have been victims of an ideology that assumes the worst in people and then creates workplaces that essentially compel people to validate that assumption. In other words, executives design their organizations based on a false conception of what people are like, but then their organizational design works to make that false conception true. In other words, “human nature” is to a large degree the product of institutional design.

But the self-fulfilling feedback loop I’m suggesting is not inevitable. And books like Work Rules!, describing companies like Google, show us that there is another way—a way that leads to happier workers, more fulfilling work, and more successful companies.

Disclosure: Barry Schwartz is a member of The Psych Report‘s Advisory Board.