Asked what makes a great place to work, employees focus a lot less on pay and benefits than you might think.
Workers want fair compensation without a doubt, but they also want to feel that their work and their company's mission matter, workplace research shows.
Workplaces that supply those emotional perks tend to be "organizationally healthy," the workplace version of a healthy, high functioning person, workplace experts say. When employers instill a sense of purpose, set a clear direction and keep workers in the loop, they not only win accolades from employees, but they succeed long-term — and are more profitable, experts say.
"To perform well, a company needs to be smart, and it needs to be healthy," said Doug Claffey, CEO of WorkplaceDynamics, a consulting firm for employers based in Philadelphia. "Not only are organizational health factors the ones that are associated with a company's performance, but they also are the ones that differentiate the top workplaces from the average or good ones. But it's the kind of thing a lot of managers don't spend a lot of time on."
The things that are most important to workers — that companies chart a clear course for the future, set high expectations, show appreciation and bring meaning to the job — also play a role in improving and driving a company's financial performance, according to research released in March by WorkplaceDynamics. The firm created a "fund" — essentially an index — to track the stock performance of publicly traded company ranked as exceptionally healthy. Since October 2008, the fund has outperformed the Standard & Poor's 500 Index by 48 percent, or 12.5 percent annually on average.
The best performing companies all scored well in those areas of interest mentioned by employees. Other categories that relate less to the organization's health but that are important to employees include pay and benefits, supervisors, training and work/life balance, according to the research, based on more than four years of data at public companies where WorkplaceDynamics surveyed employees.
"A healthy company is able to react to shocks to the system more robustly than an unhealthy company — a new competitor, price changes in the market, a fire in the warehouse," Claffey said. "A healthy company is going to be able to rally around that, whereas an unhealthy company will struggle and fail. If you have a cold and you are unhealthy, you may develop pneumonia, but if you are otherwise healthy you make shake it off in a couple of days."
Employers need to meet certain thresholds on pay and benefits, Claffey said, but once those are met, pay increases alone can't improve the workplace.
"My experience in 12 years here is a lot of times people might come for the pay, but they stay for a lot of other things," said David Jacobs, a senior vice president at Advertising.com, one of the top 10 mid-size workplaces in WorkplaceDynamics' Baltimore area survey.
The Baltimore-based online advertising firm owned by AOL strives to create a team environment for its typically young workforce by sponsoring a basketball team, service events and team happy hours and offering flexible work arrangements, back-up child care and a catered lunch once a week. The company's Get Fit program lets workers earn credits of up to $25 per pay period.
Spice maker McCormick & Co. Inc., a top 10 company in the survey's large employer category, has long focused on programs related to organizational health. The company works hard to communicate its "shared values" such as teamwork, high performance and concern for one another, said Kelly McCaffery, McCormick's vice president of human relations.
"The culture here is just so unique," McCaffery said. "You know you are valued, your contributions are valued, and you're part of McCormick's success. You're recognized for being a part of the success."
The company relies on multiple management boards that work to solve specific business problems related to branding, marketing, manufacturing or corporate issues. Workers throughout the company are elected and pass along recommendations. One board looked at ways to incorporate flexible work arrangements and wellness programs into the workplace. Ideas from that board led to the company opening a wellness center where workers can take yoga or Zumba classes, join Weight Watchers or get wellness screenings or allergy shots.
The company also offers classes and leadership programs and tuition reimbursement and sends workers to conferences "to help employees develop what they need to develop to reach their aspirations," McCaffery said.
"We're helping them be much more effective and contribute more to McCormick, but at the same time, we're showing employees, 'you're worth it,'" she said. "It really does increase an employee's commitment to the company and makes them come in every day with a purpose, knowing they're contributing to something and they have a big part in that."
Creating a healthy organization also can entail establishing workplace programs to help employees deal with home-life stress created by financial, family or health struggles, said Rose M. Stanley, a certified work life professional with WorldatWork, a human resources association.
"Stress is the number one thing employees are dealing with, and that can present itself in the workplace, when the employee is physically present but the focus is somewhere else," Stanley said. "We're seeing more and more organizations offering not just education on retirement but education on budgets, how to keep your house and manage your way through bankruptcy. It can lower the stress level, and [employees] can be present at work and productive."
But the idea of a healthy workplace can easily fall by the wayside in a poor economy, said Adam Seth Litwin, an assistant professor of management at Johns Hopkins Carey Business School.
"You can imagine one attitude among some employers is, never mind the horses, just keep loading the wagons," Litwin said. "And in this economy employers can get away with that."
Even before the economy soured, he said, "there was already an increased tendency for employers to treat labor a lot more like they treat capital, to buy the exact amount of labor they need when they need it. They're maximizing profits for the short term, but not thinking about long-term ramifications on the work force. But the most successful companies are the ones who treat employees like people."
At Southern Management Corp., "We all work together a lot as a team, and that makes a big difference," said Bonnie Queen, director of the people team for the apartment and commercial property management company, which ranked in the top 10 among mid-sized employers on Workplace Dynamics' Baltimore survey.
"Everybody's opinion counts. We ask for feedback and make sure we follow up," Queen said. Employees "know that they play a role in how we operate our business. We've involved everybody at every level to contribute to developing strategy, mission and values and to establish goals."
The company, which has grown from six employees to more than 1,600 since opening in 1965, operates without multiple layers of management and is divided into teams, allowing for input from of its workers. That structure has helped keep employee turnover low and empowers employees to work out problems with customers and residents, Queen said..
Southern Management also encourages its workers to get involved in the communities where it has apartment buildings, hotels or other commercial businesses, helping to spruce up schools or mentor students, for instance. Employees are recognized for their volunteer involvement during a company awards banquet. Southern, which offers training to all employees through a corporate university, also is known for promoting from within.
"Most team members are hired at entry level, and they grow within the organization," said Queen, who said she started in leasing and moved up to head human resources. "Everyone has that opportunity if they want to pursue it."
WorkplaceDynamics' Claffey said companies that want to become healthier as an organization must first measure their "health," often by surveying employees. Results can be eye-openers for managers, he said.
If companies score poorly on questions related to "meaningfulness" of work, for instance, "they need to figure out why they are there," he said. "People are not motivated by [a company mission] of purely making money and will struggle to get out of bed in the morning and go to work … if there is no meaning."
Above all, Claffey said, "senior leadership has to take responsibility and accountability for the organizational health of the company. If they don't do that … it will fail."