Tuesday, March 4, 2008

What Makes a Good Employee?

by Bill Kalmar

May I have the envelope, please!

Each year at this time a momentous event is announced in the pages of a prominent magazine. No, I’m not talking about the Sports Illustrated swimsuit edition, although thoughts of that warm me up on frigid evenings in Michigan (sorry if that’s sexist). I’m referring to Fortune Magazine’s announcement of “The 100 Best Companies To Work For.”

For us quality and customer-service geeks it’s an opportunity to examine the inner workings of some of the best organizations in our nation. For the companies who applied for this recognition it’s a guessing game to see where they rank among some of their peers and who is labeled No. 1.

Ever since this list was first published I’ve been following and reviewing these companies like a broker follows blue chip stocks or a wine connoisseur absorbs Wine Spectator’s list of the top bubbly. We all want to work for an organization that espouses sound customer-service processes and provides employees with a safe, challenging, rewarding environment. Fortune Magazine lists those companies.

After the list is published each year, the featured companies are flooded with unsolicited applications. In fact, in the current edition of the list there’s a section entitled, “How To Get Hired By A ‘Best’ Company.” As the author points out, “Looking at the past decade, our top 25 each year have averaged job growth of 14 percent.” The author goes on to mention that it helps to know someone at the company, because thousands of people submit applications. Before it opened in 2006, the Doha Hotel in Qatar received 25,000 applications for 600 positions.

Before we get into the specifics of these companies, let’s first examine how they were chosen. There’s that special moment in the Oscar awards program where two or three sartorially correct accountants come out on the stage with a briefcase containing the envelopes naming the winners for the evening. Of course we learn how the balloting was done. So in imitation of the Oscars, here’s how “The 100 Best” were selected:

    “More than 105,000 employees from 446 companies responded to a 57-question survey. Two thirds of a company’s score is based on the survey, which is sent to a minimum of 400 randomly selected employees from each company and asks about things such as attitudes toward management, job satisfaction and camaraderie. The remaining third of the score comes from an evaluation of each company’s responses to a culture audit which includes detailed questions about demographic makeup, pay and benefits programs, and open-ended questions about the company’s people-management philosophy, internal communications, opportunities, compensation practices, diversity programs, etc. About 1,500 companies participated in the survey. Any company that is at least seven years old with more than 1,000 U.S. employees is eligible.” (Courtesy of FORTUNE magazine)

I have used this listing in my presentations to illustrate the attributes of these organizations. In that regard, I first shared the following 12-point list with QualityInsider readers in “The Corporate Running of the Bulls.” Interspersed with that list are examples from the “100 Best” list:

What makes the “100 Best Companies To Work For” so great:

They make people feel that they’re part of a team or, in some cases, a family.

    • With an average salary of $90,083, the 1,376 employees of American Fidelity Assurance call this Oklahoma insurer their “second family.”
    • National Instruments yearly stages an employee-appreciation week with executives serving breakfast and culminating in a family outing day.
    • Nugget Markets throws a year-end bash, and in 2007 took all of its 1,322 employees whitewater rafting.
    • In 2007, as is the case every year, the Plante & Moran team gathers at its annual conference, an opportunity to bond. Partner Jeff Jenkins stated that the theme was to “amp it up,” which means that in workplace and with client relationships and in family-oriented activities, the staff was asked to ratchet it up another notch while living the “golden rule” (i.e., treat others as you would like to be treated) More energy results in better client service, a more enriching work environment and better results.
They encourage open communication, informing their people of new developments and encouraging them to offer suggestions and complaints.
    • The CEO at Adobe Systems answers employee e-mails within 24 hours and employee councils feed management with ideas.
    • After feedback from employees, SRA International switched insurers, added health savings accounts and adoption aid, and increased 401(k) matches.
    • Four times a year employees at Nike are invited to an all-employee meeting where feedback and suggestions are encouraged.
    • The head of Yahoo hosts monthly chat ’n’ chow lunches with employees and even answers employee questions online.
    • Perhaps the lowest turnover rate in the hotel industry (18 percent) is attributed to J. W. Marriott Jr.’s visits to 250 Marriot properties each year and meeting with employees.
    • Cisco Systems uses an employee feedback/suggestion system, “On My Mind.”
They promote from within, letting their own people bid for jobs before hiring outsiders.
    • Eighty-five percent of managers at supermarket Stew Leonard’s were hired in house. This supermarket has been featured in many of quality guru Tom Peters’ columns. Here’s a bonus: CEO Stew Leonard Jr. has a surefire way to determine the strength of the economy: “I look for the mashed-potato effect. If customers are buying our freshly-prepared mashed potatoes instead of whole potatoes, then the economy is doing well. Lately, bulk potato sales have been going up, so there’s a concern about where the economy is going.” The so-called experts can cackle about their charts and their prognostications, but for me, I’m focusing any investments I might make on the “mashed-potato” metric.
    • At S.C. Johnson & Son more than half of employees are over age 45, 28 percent have worked there more than 20 years, and 78 percent more than six years.
    • Twenty-three percent of Herman Miller’s workforce are “Water carriers,” employees who have 20 or more years with the company.

They stress quality, enabling people to feel pride in the products or services they provide.

    • Quick action by Mattel in recalling defective toys from China illustrated this company’s focus on quality and safe products.
    • Granite Construction has a zero-accident goal and employees are rewarded, not fired, for bringing attention to unsafe situations.

They allow their employees to share in the profits through profit sharing, stock ownership, or both.

    • Ten percent of employees’ pay is deposited into 401(k)s at Booz Allen Hamilton.
    • Workers at Stanley own at least 50 percent of the company.
    • How about a 43-percent stock price rise at EOG Resources, where all employees have stock options.
    • Intuit offers all new employees stock options.
    • Of the 3,558 employees of PCL Construction Enterprise, 2,200 employees own shares in the company, and many received dividend checks last year in excess of their annual salaries.

They reduce the distinctions of rank between top management and those in entry-level positions, and they bar executive dining rooms and exclusive perks for high-level people.

    • Everyone gets overtime pay at David Evans & Associates.
    • No one earns more than 10 times anyone else at TDIndustries.

They devote attention and resources to creating as pleasant a workplace as possible.

    • Because during tax season the workplace is home six days a week for employees of Plante & Moran, management has designed a building with staff in mind: Custom wood stain throughout the entire building, work stations designed by focus groups, each staff member has his or her own space with a nameplate, and in the front lobby a huge assortment of flowers is replaced weekly. Dan Essad, human resources senior manager stated it best when he was interviewed recently by reporter Carol Marshall for the Oakland Business Review: “We care for our clients, we care for our employees, our community, our families, and that caring is reflected in our space.”

They encourage their employees to be active in community service by providing money to organizations in which employees participate.

    • Every employee at Intuit receives four days off with pay each year to perform community service.
    • Umpqua Bank provides 40 hours of paid time yearly for employees to volunteer in the community.

They help employees to save with matching funds.

    • Aflac boasts a 401(k) matching fund.
    • Seven and a half percent of salary is offered as profit sharing at Arnold & Porter.
    • Genentech bumped up 410(k) match in 2007—100 percent up to 5 percent of pay.
    • Here’s quite a bonus from Boston Consulting Group—15 percent of pay deposited in a retirement plan.
    • Alcon Laboratories has the richest retirement program in U.S. business with employee contributions matched 2.2 to 1.
    • A 15 percent of pay contribution by Russell Investments is part of their automatic profit sharing.

They try not to lay off people without first making an effort to place them in other jobs, either with the company or elsewhere.

    • American Express had 6,000 internal job moves last year.
    • There’s a no-layoff philosophy at FedEx.

They care about the health of their employees, sometimes providing physical fitness centers and regular exercise and medical programs. (This was a perk provided by too many companies to mention. This is a sampling.)

    • Healthways has walking trails, bikes for rent, and easy-to-locate stairways to encourage exercise.
    • Certainly this was to be expected—Nike has a decathletes dinner every year.
    • Tennis and basketball courts are provided by AstraZenica.
    • eBay has hired a full-time staff of personal trainers and nutritionists.
    • A pool, cardio room, a racquetball court, putting greens, and horseshoe pits can be found at SAS Institute.
    • At Goldman Sachs, where the average salary of $137,000 keeps people financially healthy, you will also find rock climbing, a martial arts boot camp, massage therapy and Pilates. Even with the over-the-top salaries paid here, the company will even outfit you with workout duds.

They expand the skills of their people through training programs and reimbursement of tuition for outside courses.

    • Tuition reimbursement of up to $20,000 and bonuses for advanced degrees, which 65 percent of MITRE employees have, makes this a company that encourages learning.
    • Let’s not undercut what Station Casinos is doing—free dealers school for staffers wanting to advance and gain new skills.
    • Johnson Financial Group offers a graduate tuition reimbursement up to $10,000.

No. 1 is Google, which prides itself on having fun and minting millionaires. The stock just rose above $700 and 99 percent of employees have stock options.

There you have it. So update your resumes and start campaigning for that new job, unless you are fortunate enough to work at one of these extraordinary companies. I’m just pleased that all of you are still working and supporting my social security and Medicare.

P.S. Finally, for those of you who are anal-retentive like me, I did mention in last month’s column that I would report on two recent books, The Three Signs of a Miserable Job (Patrick M. Lencioni, Jossey-Bass, 2007) and one about General Electric—Jacked Up (Bill Lane, McGraw-Hill, 2007). I suspect that some of you have been searching for that. Rest assured that will be in next month’s column. I thought learning about the best companies better served me and you than harping on a miserable job. I hope you agree.

About the author
William J. Kalmar has extensive business experience, including service with a Fortune 500 bank and the Michigan Quality Council, of which he served as director. He has been a member of the Malcolm Baldrige National Quality Board of Overseers and a Baldrige examiner. He’s also been named quality professional of the year by the Detroit Chapter of ASQP. Now semiretired, he’s a freelance writer for the Detroit News; writes a monthly column for Mature Advisor newspaper; is a mystery shopper for several companies; is a frequent presenter and lecturer; does radio voice-overs; and competes in duathlons.

Editor's Note: This article appeared in the March issue of Quality Digest Magazine which can be accessed at: www.QualityDigest.com

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