A Good Company Looks Out For Its Employees

Scripps Howard News Service
Judy Olian
(Judy Olian is Dean of Penn State's Smeal College of Business and is a leading expert on strategic human resources management.)

This week's Fortune Magazine includes their annual list of the 100 "Best Companies to Work For." You have to take these ratings with a grain of salt. For example, in 2000 Enron was number 24 on the list, Amgen (a biotech firm) was 27, and Janus (a fund management firm) was 35. None are listed in this year's top 100, and I imagine that Enron would now occupy the top spot on the list of the100 worst companies to work for in the eyes of most of its employees.

Nonetheless, there are some common denominators about best employment practices that can be extracted from the list and from other exemplary companies. It's not just about money or typical fringe benefits. Even after lay-offs, some companies still evoke positive feelings among their former employees who seem to have accepted the necessity of the pain, and appreciate the way it was done.

Among the most salient characteristics of "best companies" is open communication. Employees want to share in the important decisions of the company and its future, for good and bad. Among the best companies, many offer employees the opportunity to devise creative solutions in new business areas, drive cost-cutting strategies, or develop and implement key employee policies. At Agilent (the HP spinoff), when the business environment was tumbling, employees successfully postponed gargantuan cuts to their workforce by finding ways to cut travel expenses by 15 percent, and equipment purchases by 70 percent. At Gortex, salaries are determined by a ranking system owned by the employees, since there are no bosses and no permanent job titles. At Griffin Hospital in Connecticut, all 1100 employees attend the company retreat and are encouraged to participate in generating ideas for the hospital. And at Harley Davidson, open communication is taken to the extreme - - none of the executives have office doors.

Another critical dimension that seems to shape employee perceptions of companies is the values demonstrated by the leadership. Employees look for signals that the company cares about the community of employees, and about the community in which they live. Many employees of these best companies note how firms respond to community crises such as September 11th, or how involved they are in community projects like helping the poor or mentoring children. Medtronic's employees were especially appreciative of the medical device company's contribution of defibrillators after the World Trade Center tragedy. Small gestures are also very important. MBNA gives $500 to every employee when they get married. Frank Russell, a company providing pension fund advice, pays employees up to 80 hours a year to volunteer for their favorite causes.

The profile of employee benefits can also signal a company as a great place to work. There's a huge range of benefits that companies offer their employees, but some are distinctive. At Capital One, employees can get a vacation day on a half-hour's notice. At pharmaceutical companies like Pfizer or Eli Lilly, all company drugs are free to employees. AFLEC, an insurer, provides on-site childcare for 540 children. At Edwards Jones, a stockbroker with small offices across America, despite a financial shortfall, all employees received their year-end bonuses a week early to help them during the last Christmas season. Many firms provide extensive educational benefits paying for a variety of degree and non-degree education, and others offer tremendous fitness facilities and interesting vacations as performance rewards. Patagonia, the casual clothing maker, offers employees organic food in its cafeteria and Genentec, a biotech firm, provides on-campus bicycles, an on-site hair salon, and free espresso to all employees.

These company features do not work if they are isolated gestures or gimmicks, but will work if they are an extension of fundamental principles. They work because they are symbolic of a general climate - - that management cares, is fair, open, and treats its customers and the community in which it serves with respect and honesty. In the long run, it's a wise investment in your most precious asset - - people.

To return to Media Coverage click here .

REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu .

Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

Click here for more news.