Employer reputation

 Employee communications will undoubtedly be the hot topic of the next few years, especially in the reputation space. As leaders come to terms with the fact that employees can be their best advocates and worst badvocates, internal communications will rise to a new level. That’s a good thing because I think leader-to-employee communications is more immature than the art and science of external communications.  With all the technology we have, you’d think that employee communications would be more advanced. But it is not.  Research by Dov Seidman and the Boston Research Group surveyed thousands of employees at all levels. One of the more startling  findings was that 27% of bosses think that employees are inspired by their firm, when in fact only 4% of employees agree.  And 41% of bosses say their firms award people based on values rather than financial performance.  Only 14% of employees agree. Bosses have  much to do to get employees inspired and willing to go the distance to make their firms successful and a place others want to work at. Talent, leadership and culture are drivers of reputation. Time to inspire before it is too late.

I just read this wonderful interview with Vineet Nayar, CEO of HCL Technologies. He has written a book titled Employees First, Customers Second: Turning Conventional Mnanagement Upside Down.  And that he does. The reputation of employees seems to be gaining more steam lately. More CEOs are asking how to engage employees better and more creatively and harness their advocacy. Nayar’s strategies and tactics are compelling — not only are detailed financial performance delivered directly to employee desktops but all (ALL) employee appraisals or performance reviews are posted on HCL’s internal website for all to see. And get this, this includes the CEO’s review. His theory is that he too can learn from direct feedback.

The CEO seems very plugged into the employee component of the value equation. Here are a few things that really stood out to me. He must have a fine reputation among his employees to bear his soul so publicly and turn everything on its head. There are other good examples in the article so I recommend you read it. And here’s to all those dancing CEO bloggers out there!

“We also looked for symbolic ways to be a model of openness. One thing I did was publicly dance in front of all my employees. This was to remove the halo that a CEO has around his head. Meaningful conversation happens after you have set the stage in this way, after you make clear that you are as open as anyone else — crazy but effective.

I started writing a blog called “You and I,” in which I encouraged employees to ask me questions in the open. The only rule I made was that when you ask the question, it must have your name attached. All 60,000 employees should see your question and my answer. At first, I was depressed by the result, because I mostly received negative questions that made HCL look bad. People said things like, “Vineet, I don’t accept what you’re saying.” Or, “You lack vision; you haven’t articulated what the company’s size and scale will be in 2010.”

So I held an open house with a group of employees. “I’m feeling pretty bad,” I said. “Nobody is saying what is positive about our company. Do you think I’ve unlocked a genie that is spreading demotivation?”

Their answer was interesting. They said it is good to wash dirty linen in public, in this case on the blog, because it builds trust. There are no rumors. We discuss everything openly and honestly. We don’t always have solutions to problems, but at least we expose them. Out of that, I began to share the financial numbers and give my perspectives, and the tenor of the blog comments began to change.”

  Not sure if you were sent this article about “green” rankings….based on another article in MITSloan Management Review by Auden Schendler and Michael Toffel (you have to sign in to get the article). It is definitely worth reading but the central premise is that many of the environmental ratings focus on the wrong criteria, namely failing to incorporate advocacy activities that influence environmental regulation. What the article says is that environmental ratings should also include whether a company’s political actions support or undermine climate action. From a reputational point of view, these sentences stood out:

Third party corporate responsibility ratings matter. They help consumers vote with their wallets, aid job seekers with employment decisions, affect employee morale, guide socially responsible investors and pension funds and generate good — or bad — PR for businesses. Research has shown that poorly rated firms respond by improving their performance.

We work with companies on rankings of all sorts. And these “green” ratings are very sought after. There is no perfect scorecard that I know about and yes, companies can game the system even when they don’t deserve the reputation burnishing. What else is new? But winning them is important to reputation-buidling of credentials in the environmental space. And for those companies that are not truly green today, these environmental scorecards push them to do better and that’s what counts in my book. I often tell companies to go ahead and apply for Best Place to Work awards because it gets the CEO involved and gets leadership focused on one day being among the chosen few. Even if you don’t win, you usually can get your scores to determine what you need to do better. The same goes for climate change. If you don’t win, that’s okay. Try again next year.

The article rightfully says that these rating systems should factor in other criteria such as political contributions, CEO advocacy and NGO relations. True. And they also rightfully say that these rating systems could benefit us all by spurring corporate activism “to solve one of the world’s most pressing problems.” True. But we should recognize how far we have come already. I remember when there was no such thing as ”green” ratings. As it’s been said, we’ve come a long way baby.

No doubt about it but U.K.-based Pret-A-Manger (ready to eat, translated) is forging ahead with its reputation-building program in the U.S.  I think it is catching on. Today’s article on how they are building their reputation was illuminating because of its best practices on motivating employees and delighting customers who come for a fresh take on fast food. I should know because I’ve been a recipient for several years now since a Pret is located between my subway exit and my office. 

I am usually there along with one or two regulars when the Pret opens at 7am . Sometimes they give me free coffee and tell me to have a good day. But what I hold really dear to my heart  is their gesture of kindness in the dead of winter. If I arrive before their opening time and it is bitter bitter cold as it was many days over the past winter, they sometimes let me in to wait while they finish their daily early morning meeting or tell me to grab my coffee and go (I make it up the next day). As a New Yorker, most stores let people wait outside no matter what the weather is and stick strictly to their closing and opening hours. Here is another example that comes to mind of their friendly customer focus. Over the past two or three months I thought that a large coffee cost $2 and I would just drop two single bills on the counter, grab my coffee and head to my office. Just recently, however,  I learned that my coffee actually costs $2.11. No one ever said anything to me. Maybe they didn’t have the heart to displease me but I sure was embarrassed when I overheard another customer asking about the price. Now I pay full freight, happily. For some reason, I usually get to know the manager in charge because they are there early when the store opens and are always up front helping and welcoming customers. They always pitch in behind the counters when it gets crowed, clean up spilled milk at the coffee area and thank everyone for coming.  The managers understand the importance of teamwork and working shoulder to shoulder with the others. Everyone is always bustling around and moving to stock the shelves, answer questions, say hello, and keep the flow going. I often marvel at their customer service smarts but had not spent much time learning about how they do what they do so well. Therefore I was glad to read about how they run such a tip top shop.

Here are some of training strategies they use that are worth sharing:

• New hires are sent to a Pret A Manger shop for a six-hour day, and then the employees there vote whether to keep them or not. 
• Bonuses are awarded based on the performance of an entire team, not individuals.
• Pret also sends “mystery shoppers” every week. Mystery shoppers are people who visit and observe but do not reveal who they are. If a mystery shopper scores a shop as “outstanding,”  all of the employees get paid an extra wage-per-hour bonus, based on a week’s pay.
• When employees are promoted or pass training milestones, they receive at least $80 in vouchers. But, instead of keeping the bonus, the employees must give the money to colleagues, people who have helped them along the way. That’s a novel approach.
• Every quarter, the top 10 percent of stores, as ranked by mystery-shopper scores, receive about $50 per employee for a party.
• The top executives at Pret get 60 “Wow” cards, with scratch-off rewards of cash or an iPod, to hand out each year to employees who excel.
• Pret has all-staff parties twice a year and managers get a monthly budget of $150 or so to spend on drinks or outings for their workers.

And I forgot to mention that they are always ask how you are doing. It’s the little things that add up to make a reputation whole.

As reputation watchers, we are always watching the big barometers of reputation such as Fortune World’s Most Admired Companies and its sister, Fortune‘s Best Companies to Work For (BCTWF).  Below is an analysis and comparison of data points examined on the Fortune Best Companies to Work For list between the years 2006 and 2011. Even further below is some analysis on LGBT offerings, healthcare benefits, job and job sharing growth and other unusual benefits as factors in the 2011 winners of the workplace.

All Data 2006-2011

LGBT As a Factor

In the past decade, American companies have increasingly provided programs and initiatives to recognize the LGBT community in the workplace.  A large 95% of The Best Companies to Work For had LGBT-friendly policies and seven in 10 (70%) had LGBT-friendly benefits in 2008. In 2011, the number of Best Companies with LGBT-friendly benefits was an astounding 88% coupled with an almost perfect 99% of Best Companies with LGBT-friendly policies. While the Best Companies’ LGBT-friendly benefits have always lagged behind LGBT-friendly policies, each year the gap between the two has narrowed; in 2008 there was a difference of 25% which has since shrunk to a mere 11% in 2011. The LGBT community has become a widely-recognized group within the American workplace and the Best Companies have been quick to make headway in this area.

Health Benefits as a Factor

Major corporations at Davos this year came together for the World Economic Forum Workplace Wellness Alliance. The Alliance consists of 31 companies committed to advancing wellness in the workplace. Goals of the alliance include knowledge sharing and developing and promoting the use of standardized metrics to create a global standard of wellness, hopefully increasing worker productivity. Looking at health initiatives for Best Companies, after rising from 2006 to 2008, 100% paid healthcare was in decline from 2008-2010.  2011 saw the first uptick in two years moving from 13% to 14% of Best Companies but still not near the peak of 21% in 2008. While 100% paid health seems like a luxury not all companies can afford, a healthy work force can be a powerful tool that may make the investment worthwhile. On a similar note, only 59% of Best Companies offered subsidized gym memberships in 2008 compared to a whopping 78% in 2009. The number of Best Companies with subsidized gym memberships has fallen in the past two years, but far from pre-2009 levels (currently 71%). Best Companies are still trying to keep their workforce fit and healthy even in the wake of a recession which demonstrates that employee health is a staple of a great workplace.

Unusual Perks as a Factor

Recently, more employers have been offering not only physical health perks, but mental health programs as well for their employees. Health isn’t confined to gym and fitness centers. Companies like Zappos.com offer employees an on-site resident “life” and “goals coach” that advises employees on work/life balance and discovery of  higher meaning in their lives (sounds awesome, right?). Defense contractor SRC/SRCTec offers employee-led support groups that focus on alleviating the stress of caring for an aging parent. And starting with a yoga room at Ebay in 2008, the idea of peaceful exercising is re-emerging in 2011 with Intuit’s free Yoga, Pilates and Zumba (Latin-inspired dance fitness–first time I heard of this, oops) classes.

Job Growth & Job Sharing as a Factor

While perhaps a reflection of the economy, average job growth at the Best Companies ticked up slightly after falling to its all-time low of less than 1% in 2010. Traditionally, average job growth for Best Companies had hovered between 7% and 9% (between 2006-2009) before falling sharply in 2010. For the Best Companies, average voluntary turnover also moved in a similar direction. Voluntary turnover fell from almost 12% in 2009 to 7% in 2010 where it has remained flat through 2011. The past three years have proven to be difficult for the unemployed, perhaps pushing more workers to hold onto their positions.

Job sharing reached its zenith in 2007 with 71% of Best Companies offering such a program. The offering steadily declined for the next two years with a small surge in 2010, but ultimately falling to a five-year low of 56% in 2011. Job sharing may be on the decline lately as more Americans are pressed for income, looking for full-time employment as a suitable solution.

[Many thanks to Ross W for his help on this.]

  If you have not read “Four Lessons in Adaptive Leadership” in the November Harvard Business Review, I highly recommend it. It was written by Michael Useem, professor of management and director of the Center for Leadership and Change Management at the University of Pennsylvania’s Wharton School of Business. There are many lessons to be learned from the article that are reminders on how leadership drives meaning and in turn, purposeful reputation.

One of his lessons is about creating a link with the people you oversee or work with. Building a positive company reputation is often as simple as thoughtful communications from the top. It may be just a glance, a handshake or asking someone what they are doing over the holidays. Useem wrote about an incident when the U.S. Joint Chief of Staff visited his business classroom that is a good reminder of how the most ordinary gesture can communicate the extraordinary moment:

It is 10 minutes before class time, and many of the 65 first-year students are taking their assigned seats in a tiered classroom. The general strides into the room—four stars on his epaulets and a half-dozen staffers and security agents close behind. He walks straight to the first row and introduces himself to the nearest student. He shakes hands, exchanges a few personal words, and then moves on to the next student.

Making a personal connection from the top can have a tremendous impact on company or employer reputation. It forges a connection that transcends the everyday rapid fire activity and isolation of working behind a computer that many experience. 

Useem’s example has special resonance.  When I wrote my first book, CEO Capital, I used many examples of how CEOs build reputation. I used an example of symbolic CEO leadership that I had heard about upon joining my former agency.  I had been told that on our CEO’s first day at work at the agency, he (Chris Komisarjevsky) shook hands with every single employee starting in the mailroom and working his way up to the 13th floor where senior management sat. When people wanted to explain to me what kind of company I was joining, they always used this example as a demonstration of the kind of personal leadership that I would witness from the top.  It certainly reminds me of Useem’s classroom example.

As the year ends, I wonder how CEOs can more effectively build workplace reputations through communications, both tangible and intangible. It is important to figure out what really counts and will make the difference in keeping your best employees and getting them to go that extra mile.

Employee satisfaction is a prime driver of corporate reputation. Nearly all reputation studies conclude that talent makes a tremendous difference. A global survey from Forrester recently looked at employee advocacy – how much employees would recommend their employers’ products or services and recommend their employer as a good place to work to friends or relatives. They borrowed this questioning from the Net Promoter Score (NPS) work done by Bain and which is widely accepted as a strong proxy for excellence. What particularly attracted my interest was how employee advocacy differed by country. Advocacy is a key tenet at Weber Shandwick and for that reason, I find advocacy and its impact on reputation something to keep up on.

North American employees (US and Canada) are three times more likely to be advocates for their employers than those in Europe.  French employees had the most “badvocates” or detractors and the least advocates. The authors postulate that labor laws and cultural differences are factors in why France had the most detractors when it comes to answering questions about products/services made by their employer or as a place to work.  Germany fared better than the UK on the advocacy dimension but France performed the least well.

Yet, there were plenty of detractors in all regions which underscores how important it is for management to build better understanding of employees’ satisfaction if they wish to have admirable reputations and attract the best talent. This will only grow in importance as the baby boomers retire and the next layer of management thins.