Including the key to empowering your workforce, what it really means to be a great workplace, and why your employees’ lives are at stake

5 Lessons for Leaders as they Build a Great Workplace

If one thing was abundantly apparent at this year’s Great Place to Work® Conference, it was this: The moment for workplace culture has arrived. No longer a “soft” idea existing on the fringes, business leaders around the world are actively contemplating and creating workplace cultures that have a notable, measurable, and undeniable impact on their business success.

The following pages distill the ideas shared at the 2014 Great Place to Work® Conference into the top �ve lessons anyone interested in creating or sustaining a great workplace culture should consider. Our hope is that these lessons and the truths that lie within them will help you think about how to take action in your own company to build a great workplace.

Each year Great Place to Work®

convenes hundreds of executives, academics, and senior HR leaders to discuss what it looks like to have—and what it takes to create—a world-class workplace culture.

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“The idea of a great place to work no longer exists on the fringes, or with a few courageous leaders. It is an essential component of our dialogue about business.”

- China Gorman, CEO, Great Place to Work®

“

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What is possible when people are their most productive, collaborative, innovative and original selves? Our respective businesses thrive, and you will reap the bene�ts and the business results whether you make a list or not.

If you remember that, your journey will have been a success beyond your expectations.

—Lori Perlstadt, U.S. Managing Director, Great Place to Work®

Blake NordstromPresidentNordstrom, Inc.

Victoria B. MarsChairman of the BoardMars, Inc.

Terri KellyPresident and CEOW.L. Gore & Associates

China GormanCEOGreat Place to Work®

Bill EmersonCEOQuicken Loans

Leslie CaccameseAssociate Vice President, U.S. MarketingGreat Place to Work®

Lori PerlstadtUS Managing Director Great Place to Work®

Jeffrey PfefferThomas D. Dee II Professor of Organizational BehaviorGraduate School of Business, Stanford University

Katie PoppBest Companies DirectorGreat Place to Work®

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Great Place to Work® Experts and Conference Keynote Presenters

Creative TechnologiesWorldwide

5 Lessons for Leaders as theyBuild a Great Workplace

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Your employees’ lives are at stake.

Top companies are leading with shared values, not rules and policies.

Being recognized as a Best Company is less about “perks” and more about the employee experience.

Leaders need to be on board for a great workplace culture to thrive.

When it comes to your employees, be generous.

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Action Item

1 Wellness programs are not the lever that drives employees’ health. Instead, improving the overall work environment is a far more effective way to keep employees healthy.

In his keynote address, Dr. Jeffrey Pfeffer of Stanford University noted, “Companies that build great workplaces also improve human physical and mental health and lifespan.” He estimates that unhealthy work environments cost society a staggering $130 billion and 125,000 deaths each year.

What can employers do to keep workers healthy? According to Pfeffer’s research, factors such as control over one’s work, managing work/life balance, perceptions of fairness in the workplace, and more (see next page) directly impact employees’ health.

When these factors aren’t managed favorably, employees are far more likely to experience a slew of mental and physical health problems including unhealthy weight gain, anxiety, depression, alcoholism, hypertension, cardiovascular disease, and even death.

The result for organizations—other than a workplace brimming with stressed-out and sickly people— includes costlier insurance premiums, increased absenteeism, lower worker productivity, and more.

Your employees’ lives are at stake.

For organizations that are truly concerned with employee health, before working on a separate wellness program, take stock of the broader work environment first to ensure it is one that promotes employee health.

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Quote

1Workplace factors that impact employee health

“Companies that build great workplaces also improve human physical and mental health and lifespan.”

–Jeffrey Pfeffer

7 Workplace Factors that Directly Impact Employee Health

Among Employees at the 2014 FORTUNE 100 Best Companies to Work For®

1. Job design, including control over work

2. Overtime and number of hours worked

3. Providing social support

4. Con�ict between work and family commitments

5. Perceived fairness and justice at work

6. Layoffs and economic insecurity

7. Offering health insurance

77% believe management involves them in decisions that affect their jobs or work environment

91% believe they can take time off work when they need to

87% feel a sense of family or team at work

83% feel they are encouraged to balance work and personal life

84% believe their workplace is fair and just

85% believe layoffs would only be used as a last resort

All 100 Best Companies cover 60-100% of FTE’s health insurance premium

91% of Best Companies cover 60-100% of the premium for dependents

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2Action Item

Top companies are leading with shared values, not rules and policies.

Leaders at the Best Companies to Work For are throwing away the 75-page employee handbook in favor of simple statements or shared values. In an era where command-and-control leadership is waning, leading with shared values and principles provides an effective strategy for the evolving, trust-based organization.

Nordstrom leads the pack in succinctness with a one-line employee credo that guides all behaviors: “Rule #1 is ‘Use good judgment in all situations.’ Rule #2 is: ‘Go back to Rule #1,’” shared President Blake Nordstrom. “This is all employees need—and it works.”

Simply put, when employees are guided mainly by rules and policies, trust is not at the heart of the relationship. And further, rules and policies do not provide a strong platform for innovation or empowerment.

But when a deeply-held set of values and principles are in place, they serve as stakes in the ground to help guide decisions and actions, foster innovation and creativity, and empower employees. And when employees feel empowered, great things happen. The most creative ideas, the most outstanding customer service, and the most innovative solutions come from the employees’ spirit unleashed, tethered only to a handful of tenets that are so well- engrained that they have become second nature.

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Take stock of the shared values or principles that guide your company, with a focus on whether they are well-integrated. If you see room for improvement, consider having a candid conversation with senior leadership about making this a strategic priority.

”“Leadership Insights on Shared Values and Guiding Principles

“If you were to go to a Gore site, you would �nd [a poster outlining Gore’s values and guiding principles] in every of�ce and conference room. Our associates use it as they think about their decisions and what actions they’re going to take. This becomes the one thing they look at to make sure they’re really aligned with our cultural bindings as a company.”

- Terri Kelly, President & CEO, W.L. Gore

“Rule #1 is ‘Use good judgment in all situations.’ Rule #2 is: ‘Go back to Rule #1.’ This is all employees need—and it works.”

- Blake Nordstrom, President, Nordstrom

“For every unit around the world, The Five Principles play the role and the foundation of the culture that gets created there. We’re absolutely clear that’s the way it’s going to be. We don’t have a lot of rules beyond that…These are our principles, these are our values, and this is how we do business.”

- Victoria B. Mars, President of the Board, MARS

“As you continue to grow, senior leaders simply can’t be everywhere and make every decision. You need to have a culture and a philosophy that people can understand…because we want people to make decisions themselves.”

- Bill Emerson, CEO, Quicken Loans

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3Action Item

What people often think makes a great workplace isn’t actually what makes it so. So say Leslie Caccamese and Katie Popp, two of the masterminds behind the FORTUNE Best Companies to Work For Lists. In their Conference session, they gave attendees a behind- the-scenes look at the selection process for FORTUNE Magazine’s most popular list franchise: The FORTUNE 100 Best Companies to Work For.®

The key takeaway? While famed amenities such as workout facilities, on-site massages, gourmet cafeterias, game rooms, and much more are all well and good, FORTUNE List evaluators are ultimately looking for evidence of trust- based interactions in the workplace.

That’s because more than any other factor, employees’ experience of the workplace determines List placement. Two-thirds of a company’s overall score is based solely on employees’ responses to the Trust Index© Employee Survey assessing trust in the workplace, and the

remaining one-third is based on the extent to which workplace practices are “gift- like”—not transactional—in nature (see Lesson 5).

So by all means, install slides and �reman poles; scatter about lava lamps and bean bag chairs. Bring in the manicurist and the barista, and cater to people’s pets. Just make sure these things aren’t happening in lieu of deeper, more substantial practices like involving employees in workplace decisions, keeping them informed of important issues, tending to their ongoing professional development, and sharing pro�ts fairly.

These types of practices will go much further in helping employees feel that theirs is a great workplace.

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Being recognized as a Best Company is less about perks and more about the employee experience.

If you decide to share your company’s outstanding workplace practices with Great Place to Work® via the List process, be sure to bolster them with evidence of a genuine sense of trust and care in the employer/ employee relationship.

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Your Employees’ Experience of Your CompanyYour organization may pay employees fairly, offer competitive bene�ts, and allow employees to volunteer during working hours. You may have company-sponsored happy hours, free snacks in the kitchen, and a foosball table in the break room.

But is your company a Great Place to Work®?

Based on our 30 years of research, we know that a Great Place to Work® is one where employees trust the people they work for, have pride in the work they do, and enjoy the people they work with.

The Trust Index© Employee Survey measures all of the ways employees experience a great workplace in action, and allows organizations to benchmark themselves against the FORTUNE Best Companies to Work For to �nd out where they can improve, and what they may already be doing well.

The Great Place to Work® Trust Model©

4If senior leaders at your company are not yet convinced of the benefits associated with being a great workplace, consider sharing these “Business Benefits” with them to begin the conversation.

Action Item

At great workplaces, leaders all the way up the ladder are committed to the goal of being a great workplace. Bill Emerson, CEO of Quicken Loans, spends 40% of his time attending to the company’s culture. As CEO of the nation’s largest online home loan lender, Emerson has many competing priorities, yet he and Chairman Dan Gilbert still �nd time to lead a full-day session with all new employees to review the company’s book on culture, “ISMs in Action.”

It doesn’t stop there. Blake Nordstrom and his executive team spend 50% of their time on the road, staying close to both the employee and the customer experience. And Terri Kelly, CEO of W.L. Gore—regularly recognized as one of the most innovative companies in the world—believes that an important part of her role is to align Gore’s values, practices, systems, and actions to reinforce the culture every day.

The truth is, not every company starts with leaders who feel this way. If your organization falls into this camp, take a look at your own role as a leader in your

company. What behaviors can you model that will serve to build trust with employees? Are there ways you can exert your own in�uence on a smaller scale, to start moving your organization down the path of the large-scale change you’d like to see?

Great Place to Work® CEO China Gorman encouraged leaders who are passionate about this work to begin taking action, building the momentum that may eventually turn the tide of the organization’s overall stance on being a great workplace. Said Gorman, “Once something is started, it creates momentum…regardless of your role, regardless of the level of buy-in you have from your senior managers. YOU do have the ability to get this started.”

So what are you waiting for? Go ahead and get started. Others just may follow.

Leaders need to be on board for a great workplace culture to thrive.

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Getting Leaders On Board: A Business CaseHow much money would your company save if turnover were cut in half?

Turnover rates at companies with high levels of trust are just a fraction of those of industry peers. Turnover costs the average company 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees.1

So, being a great workplace is not just good for employees—it’s good for business, too.

5% 10%

15%

20%

25%

100 Best Companies Voluntary Turnover by Industry2

BestCompanies

experience as much as 65%less turnover

100 Best (%)

Industry Average (%)

30%

35%

40%

Hospitality 24.5%38.0%

Professional Services25.9%

10.4%

Financal Services & Insurance12.6%

10.3%

Construction & Real Estate 19.4%8.7%

Information Technology 8.0%16.2%

Healthcare 6.0%17.1%

Manufacturing & Production 5.8 %10.5%

1. Blake, R. (2006). Employee retention: What employee turnover really costs your company. ManagerNewz2. “100 Best” data provided by Great Place to Work® Institute, Inc. Comparative data provided by BLS.

5Action Item

An important lesson we can learn from Best Companies is that employee loyalty, commitment, and productivity are all byproducts of generosity. Whether that generosity takes the form of transparent communication, increased autonomy, an intense focus on development, or simply the gift of a leader’s attention, all are guaranteed to be smart investments in the employer/employee relationship.

However, leaders often have a hard time letting go of the idea that if they are overly giving, then they will foster a culture of entitlement, and this fear can stop employers from being generous with the people that matter most—their own employees.

Below are a handful of practices shared by our Best Companies conference presenters that demonstrate this type of generosity in practice. Some are simple to implement—others, more dif�cult— but ALL serve to foster trust, build a great workplace, and maybe even to inspire others to try something similar.

20% Time for Team Building | At Zappos, every manager is required to spend 10-20% of their time outside of the of�ce with their employees—not doing work. They are also given a “team building budget” of $50 per employee per month to see a movie together, go hiking, or other activities that promote team building.

New Hire Culture Camp | At Cirrus Logic, three to six months after new employees are hired they attend the School of Cirrus Rocks—a day-long, off site “culture camp” that reinforces the company’s mission, values and culture. Employees team into small groups, and partner with professional musicians to create a story of how their experiences to date tie into the company’s values. Rooted in the art of storytelling, employees ultimately create and perform—accompanied by a full band— a team story about what Cirrus Logic is all about.

When designing people practices, think about whether the practice feels “gift-like” or transactional in nature. Practices that go above and beyond have the employees’ best interest at heart; they are less transactional, and are instead rooted in a genuine sense of respect and caring for employees.

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When it comes to your employees, be generous. 

5When it comes to your employees, be generous.continued...

Know Thyself | In addition to the many personal, professional and leadership development programs at Kimpton Hotels & Restaurants, approximately 100 top leaders per year participate in the Self Insights Executive Leadership Program. This program helps leaders better understand their own personality and how to get the most in life out of being their own unique self.

Valentine’s Day Bailout | For employees at Cirrus Logic, Valentine’s Day is stress-free, as the company brings in cards, �owers, and boxes of candy so employees can come home a hero. And if employees still need to impress their honey, they can sign up for the quarterly “Date Night,” where the company arranges cooking classes, painting classes, and other fun evening activities for employees and a guest.

Granting “Wishez” | What do your employees wish for? If you don’t ask the question, you may never know. In the Zappos “Wishez” program, employees can write what they wish for and post it publicly. This empowers other employees to grant the wishes of their colleagues. Some are simple, like “I wish for a Frappuccino.” Others are more complex, such as “I wish my dad had the hearing aid he needs to continue working,” or “I wish I could afford the attorney fees needed for my daughter and I to be American citizens.” These wishes, too—with the help of Zappos—have been granted.

Birthday Wishes from the CEO | Bill Emerson: a busy man? Yes. Too busy to personally send a birthday card and gift certi�cate to his employees’ children? Absolutely not. Said Emerson, “The simple things are what people appreciate, and what connects people.”

15

Are your company’s practices transactional or gift-like in nature? This table provides a lens to help answer this question.

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Goal is mutual growthGoal is individual advantage

Low risk

Limited information

Transaction completes obligation

Same for all

Currency is money

High-risk, vulnerability

Transparency of motive

Open-ended relationship

Highly personalized

Currency is trust

TRANSACTIONAL GIFT-LIKE

Join nationally-recognized business leaders and Great Place to Work® expert consultants as they share proven strategies on building a strong workplace culture to gain a competitive edge in the marketplace.

If you would like to be a part of the conversation this year, Save the Date for September 16-17, 2014 in Washington, DC!

Boost Your Brand! Increase your visibility.Sponsorship opportunities are also available. View the prospectus today!

Registration is open at: http://www.greatplacetowork.com/2014-smb-conference

Save The Date September 16-17, 2014 Registration is Now Open!

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DALLAS TX

The 2014 Great Place to Work® Conference provided an inspiring forum for leaders who understand the importance of creating a great workplace to build relationships and share their experiences.

If you would like to be a part of the conversation next year, Save the Date for April 22-23, 2015 in Dallas, Texas!

Pre-registration is open at: http://www.greatplacetowork.com/2015-conference

Save The Date April 22-23, 2015Pre-registration is Open!

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About the Author

About Great Place to Work®

Great Place to Work® is the global authority on high-trust, high-performance workplace cultures. Through proprietary assessment tools, advisory services, and employer branding programs, including Best Companies lists and workplace reviews, Great Place to Work® provides the benchmarks, framework, and expertise needed to create, sustain, and recognize outstanding workplace cultures.

In the United States, Great Place to Work produces the annual FORTUNE 100 Best Companies to Work For® list and the Great Place to Work® 50 Best Small & Medium Workplaces list.

US LocationsSan Francisco - Headquarters222 Kearny Street, Suite 800San Francisco, CA 94108

Telephone+1 415 844 2500

EmailUS_clientsupport@greatplacetowork.com

New York City183 Madison Avenue, Suite 902New York, New York 10016

Telephone+1 646 370 1125

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Jessica Rohman, M.A., develops Great Place to Work® content and conducts original research, furthering the company’s expertise on issues facing organizations today. In her ten years with the Institute, Jessica has served as a consultant, facilitator, FORTUNE list evaluator, and program director, bringing a depth of understanding of Great Place to Work concepts to her work.