Respect for employees and community support are factors that help companies rank high on the list of best places to work. But there is also a pay-off on the bottom line.
No one knows better than Gordon Bethune, CEO of Continental Airlines, how important it is to have employees who trust their boss. In 1994, Continental was facing its third bankruptcy, and employee morale was at an all-time low. When Bethune took over, he realised that turning around the company culture would be the only way to keep the airline afloat. He began by listening to his employees – really listening. Now, 10 years later, Continental is among Fortune magazine’s list of “The 100 Best Companies to Work For.” When the employees in 2003 faced the possibility of layoffs, they came up with their own solution, confident that management would listen to them.

Bethune offers Continental’s employees credible management, where communication is open and accessible. He visits with employees in a different city every month at CEO exchanges and sends a weekly voice-mail message to them, accessible any time through a toll-free number.

Credibility, along with respect, fairness, pride and camaraderie, are the building blocks of a great workplace, according to research conducted by the Great Place to Work Institute, which together with Fortune produces the “100 best” list each year.

“Continental Airlines is just one of many success stories,” says Amy Lyman, founder and president of the Great Place to Work Institute. “What all of these companies have in common is their emphasis on trust and treating people with respect and fairness. A company could offer great perks and benefits and still not show respect to employees.”

At Smuckers, a 107-year-old US family-run food business, rated No. 1 on the Fortune 2004 “100 best” list, fancy perks are in short supply, but a sense of family is paramount. The two brothers who run the company stick to their father’s simple code of conduct: Listen with your full attention, look for the good in others, have a sense of humour and say “thank you” for a job well done.

Serve in order to lead
Respect for employees is what keeps TD Industries, a Texas-based mechanical and electrical construction company, consistently near the top of the Fortune list. Every employee is called a “partner,” and it is more than just a title. Employees are actually full partners in the enterprise, as more than 900 employees and recent retirees own the company. No single individual controls more than 3 percent of stock, with the entire management team controlling less than 25 percent. The partnership concept stems from TD’s overall approach to running its business, based on the practice of “servant leadership” – that in order to lead others, one must first serve the people one leads.

According to Lyman, the kind of relationships TD creates with its employees benefits the bottom line, too. In an industry that traditionally faces high turnover in the double digits, TD Industries’ turnover for partners who have been with the company for more than one year has been less than 10 percent for the past five years; in 2002, it was actually 6.5 percent. All the companies on the Fortune 100 best list experience about half the employee turnover rate of other companies in their industries. 

In addition, independent analyses of the financial performance of the publicly traded “100 best” companies show that these companies experience significantly higher levels of financial performance.

“We have also noted that companies that value their employees are also likely to be big contributors to their communities, too,” adds Lyman. “If you have trust within your organisation, you realise how important it is to create a strong community around you, and the benefits that accrue from that.”

Doing good pays off
A number of companies on the “100 best” list have active employee volunteer programmes. IBM is appreciated by its employees not only for its openness to telecommuting (on any given workday, 40 percent of IBM’s 128,000 employees telecommute from home or when they are travelling on business), but also for the company’s support of community service. IBM employees log millions of hours a year of volunteer time, including school-based online mentoring programmes, camps for students interested in pursuing careers in IT, early-learning programmes, volunteering IT expertise to nonprofits and many other activities.

One shining example of community support is Timberland, the US clothing manufacturer. Its 2,200 employees are given 40 hours of paid time annually to perform community service, called the Path of Service. So far, more than 100,000 hours of service have benefited 200 community organisations in 13 countries, 26 states and 13 cities. One day a year Timberland sites worldwide close for business for a day of service and celebration called Serv-a-Palooza. This is a day-long event in which everybody in the company contributes toward the common good, such as the cleanup and construction of community centres, camps, playgrounds, hiking trails, beaches and homeless shelters.

Timberland, which reports annual revenue of 1.2 billion US dollars, says the day costs nearly USD 2 million a year in lost sales, project expenses and wages for workers, all of whom receive a full day’s pay.

While the day of service costs the company considerable money, there is certainly a payoff for the company’s image.
 
As CEO Jeffrey Schwartz told the Wall Street Journal, “I honestly believe that doing good and doing well are inextricably linked.”

This philosophy is shared by the pharmaceutical and biotech company Novo Nordisk, based in Denmark, which in 2003 launched an employee programme called TakeAction! that exemplifies the company’s business approach, based on a “triple bottom line” that measures success in terms of economic, social and environmental performance.

“TakeAction! translates our commitment to the Triple Bottom Line to an individual level,” says Lise Kingo, executive vice president at Novo Nordisk. “There are so many employees who are keen to engage in social or environmental activities, and this programme provides them with an opportunity to spend time on such activities and to learn from each other.”

Since Novo Nordisk specialises in diabetes, a growing worldwide epidemic that comes at a particularly high cost for poorer countries, many employee activities focus on raising money for diabetes care in developing countries. For example, employees raised money to establish a national diabetes centre of excellence in Dodoma, the official capital of Tanzania, and are also volunteering their time for three-week periods to work at the clinic in various capacities. The company pays the employees’ salaries during this period and assists with housing and other daily needs.

Awakening possibilities
Zeeshan Rab, one of the first volunteers in the programme, told a group of Novo Nordisk managers during a presentation after his return from Tanzania: “It has been an awakening. It makes you realise that the problems of our daily lives aren’t really problems. It’s a matter of changing your priorities.”

For the UK clothing manufacturer Marks & Spencer’s, charity begins at home – although its Marks & Start programme is based not so much on charity as on giving a helping hand so that others can help themselves. Through Marks & Start, the UK’s biggest company-led work-experience programme, up to 10,000 people who may face barriers getting a job are helped along the way. These include school children looking for work experience (including those from deprived areas), parents returning to work, the young unemployed, the homeless and students who are the first in their family to go to university.

Marks & Spencer’s has already found work for 600 homeless people, and of the 455 who have completed the programme, more than 30 percent are now employed at Marks & Spencer or elsewhere. The programme has also been designed to develop the skills of Marks & Spencer’s own employees. Each participant is allocated a “buddy,” a Marks & Spencer’s employee who will act as his or her mentor. More than 70 percent of Marks & Spencer’s staff who have been buddies to homeless people report that this experience helped develop their own skills.

For Amy Lyman of the Great Place to Work Institute, this double benefit is no surprise, since it involves trust on all sides of the relationship – employee, programme participant and employer.

“Since we started our research in the early 1980s into great employers, this notion of trust has remained paramount,” she says. “When you start from trust, everything else falls into place.”