Read Googles Guide to SEO. Read SEO Blog sites Run tests like most great SEO guru's If you know programming, and engineering, you can try to to reverse engineer. If anything, read about Googles newest update that is being fully launched after the holidays: Caffeine
You can not know its algorithm. They are kept as secret. Letting it out can have Google shut down the company. Moreover the algorithm might not be simple. It will be complex with quite a lot of parameters.
you'll never fully know the algo, but you can certainly understand a lot of it. Of course it's going to be complex, anyone in the world would know that. He's not asking to know the full algo...he wants to know ABOUT the algo.
Thanks all for your replies as i just want to know about the policies and algo on that basis Google rank a site uppper than any other , decide page rank and many other things about the sites which are on Google. I am sorry if i was unable to clarify myself in previous post and i will definitely read about these and will Google about that. please suggest me more about that. Thanks in advance.
Even Google does not have a full control to their algo..I sometimes heard the word "might" from Matt Cutts. IMO
make a watch on your competitors and check which sites are getting 1st in google SERPs and check their work like on-page!
Read Google webmaster blog and other prominent SEO blogs for latest update. It can give you a clear idea what Google is doing and forget about the algo as no one, ever matt cutts knows about it.