Can You Trust What You Read on Glassdoor?

Robert Hohman is co-founder and CEO of Glassdoor, an online community where employees and job-seekers post anonymous information on salaries, company reviews, interview questions, and more, providing a valuable insider's glimpse of what it's like to work at a company. Hohman was on Expedia's (EXPE 0.58%) original team, and helped take it public in 1999. He most recently served as president of Expedia's discount division, Hotwire.

Glassdoor has been around for five years, and Hohman says companies' reactions to the employee-generated ratings have changed in that time. In this video segment, he explains how information is screened to assure integrity -- including being read by a human before going live.

A full transcript follows the video.

Tom Gardner: Tom Gardner, co-founder and CEO of The Motley Fool, here at Glassdoor's headquarters in Sausalito, California, with the co-founder and CEO, Robert Hohman. Thanks so much for spending some time with us.

Robert Hohman: My pleasure, Tom. Thanks.

Gardner: There's no secret about the fact that when I'm building my investment portfolio, a lot of what I'm looking at are the intangibles and the qualitative side of a business. It's relatively easy to do the numbers that everyone's doing out there, and valuation and looking at the financial statements -- but you can get a real advantage if you can learn something about the culture of the business. Most of the stocks in my Everlasting Portfolio have very high ratings on Glassdoor, so we're going to talk a little bit about that.

Robert, I want to start with just an overview of Glassdoor's business: how it works, maybe how long you've been in business and some idea of the size and reach of the business.

Hohman: The company is five years old -- the site is five years old -- and it was started with the goal of helping people make the best career decision they possible could.

We wanted to help people get an inside look at a company, and we did that by enabling other people -- the employees of those companies -- to tell their story. What's it like to work at Google? What are the best parts and what are the parts that could be better? How much money do they make? What is the interview process like when they went on their last job interview? All of that is contributed anonymously.

We started with 3,000 reviews on 250 companies. Today we have 4.4 million reviews on 280,000 companies in 190 countries around the world, so it's gotten quite large. We see about 13 million people a month that come to the site and use the resource to make a decision. The data has definitely proven to be extremely useful to job seekers and now many times, we're finding, investors too.

Gardner: One of our members, Tom, wants to know how you verify the authenticity of a rating or a comment by an employee to ensure that they are a present or past employee or have an affiliation with the company.

Hohman: Data integrity is something that we take as very important. There's numerous technical as well as procedural hurdles the data has to go through before it ever makes it live on the site, including human moderation. Before something goes live on the site, a human being reads it.

If at any time in that process we sense that something is fishy or doesn't look right -- we see repetitive behavior, we see patterns we don't like -- we challenge the behavior. We frequently find that in doing so, if someone is trying to stuff the ballot box or trying to do something they shouldn't be doing in the community, we can detect that and push it out. And we do.

What we found, after doing this for five years, is that by enforcing these community guidelines, we've gotten to a solid data set that is helpful in helping people make decisions.

Gardner: What type of pushback do you get from companies? Does anyone call in from an HR department and say, "This is unfair. You shouldn't allow this to stand." Is there any pressure? When I talk to the CEOs of companies, they have different feelings about Glassdoor. Of course, I love it because we're getting a new read on what it's like to work at that company and that culture. What do you hear from companies, good and bad?

Hohman: It's changed a lot. When we first launched five years ago, there was certainly quite a bit of discomfort around this much data -- mostly just because this was a new level of transparency that hadn't existed before, particularly around the HR function. There hadn't been this level of transparency around pay, work conditions, etc.

Flash forward five years, in a Facebook (NASDAQ: FB), Twitter (NYSE: TWTR), 24-hour news cycle world. Companies have gotten very, very used to this. The conversation has shifted away from, "Is this good? Bad?" and the discomfort, to "How do we engage with it and use it?" as companies are doing with social media and marketing now.

They know that job seekers are finding it useful and, frankly, companies in many cases are seeing the benefits of it because employees are coming to them more informed, when they hire them, and it's becoming a good match. That's a lot of what we do, is educating companies on how to use the tools -- some free, some paid -- to engage the community.