Originally published in Oregon Business magazine, March 2005
THINK SMALL. WIN BIG.
Small companies — and big companies that act small — top the charts in employee satisfaction.
by Mitchell Hartman
Sometimes it seems like bosses are from Mars and employees are from Venus. Figuring out what those Venusians want is the Holy Grail of good management. While owners and supervisors (Martians) often think that success means getting the work done efficiently and professionally
in order to increase profits, that's not the stuff that motivates most employees to strive for company success. For those Venusians, work resonates because of what it offers the worker — financial security (through good wages and benefits), intellectual or physical challenge, social interaction, and, perhaps most important, a sense of empowerment. According to the 24,000-plus employees who participated in the 11th annual 100 Best Companies to Work For in Oregon survey, small companies deliver more of what keeps workers happy than do big ones. What's more, small companies rack up more employee satisfaction despite the richer benefits that large companies can offer — from top-notch 401(k) plans, to paid paternity leaves and tuition reimubursement, to stock options. Of course, the 100 Best list includes stellar organizations of all sizes delivering extraor-dinary employee satisfaction — beginning with No. 1 large company Edge Wireless of Bend, and No. 1 small company Beaverton-based Staff Finders Technical of Oregon. Among the 100 Best are also top-shelf corporations that have helped set the benchmark for best practices statewide, including Nike, Intel, Wells Fargo Bank and Umpqua Bank, to name just a few. Still, the data from this year's survey clearly reveal that Oregonians have a preference to work for small companies — or, large companies that mimic smaller ones in the way they deal with employees. While compensation and benefits at the big multinationals operating in Oregon far outstrip those offered at small local companies, Oregonians find their highest job satisfaction in the intimacy of a small organization. EMPLOYEES RATED THEIR JOB SATISFACTION in five workplace categories in the 100 Best
survey: attraction, retention and compensation; work environment; decision making and trust; performance management and rewards; career development and learning. In all five categories, survey-takers at the 50 top-ranked small companies rated their companies on average 10% higher for employee satisfaction than employees at the 50 top-ranked large companies did. The greatest satisfaction gap emerges in areas involving empowerment. Small-
company employees are much happier
than large-company employees in areas
such as schedule flexibility, fairness of compensation structure, retention of highly qualified employees, work/family balance, trust between managers and employees, teamwork, and cooperation. By contrast, employees at small 100 Best companies are only slightly more satisfied about their retirement plans, fitness and wellness facilities, and access to information technology. But when it comes to employee benefits, large companies win hands down. The survey rates this category based on an objective comparison of benefits offered by employers — items such as health plan options, 401(k) contributions, vacation days, paid parental leave, flexible scheduling, performance-based compensation, tuition reimbursement and work force training. In this category, the 50 top-ranked large companies score on average 5% ahead of the top 50 small ones. Where large companies do best in employee satisfaction, they appear to be functioning most like small organizations, especially in key areas such as decision
making and work/family balance. "It's like a second family," writes an employee at No. 2 large company U.S. Cellular (quotes come from write-in comments in employees' anonymous surveys). Another U.S. Cellular employee writes: "My supervisor is involved in my life. She cares about my family and personal needs." At No. 4 large company Robert Half International, an employee writes: "It is a large organization but we have direct communication from the president, CEO and upper management on a regular basis. That is very rare." The same type of work environment
predominates at No. 3 large company Avista Utilities. One employee recounts how the CEO and top executives took a 15% pay cut to cope with a financial crisis, but didn't cut lower-level salaries; and, how they made the corporate jet available to the family of an employee who was injured during an out-of-town assignment. "This level of care and concern allows me to unequivocally trust the management and it motivates me to
perform beyond their expectations," the employee writes. The flip side of the equation emerges at small companies that rank near-the-bottom of the 100 Best list. The purported advantages of small organizations — direct contact between managers and employees, informal org charts and employment practices — can morph into arbitrary and capricious management that saps productivity and morale. "Certain employees are favored over others and not evaluated fairly," writes one employee at a small food processing company. And the intimacy of a small company can spin badly out of control, as this employee
of a luxury hotel reveals: "Managers don't
listen to new ideas and they make passive- aggressive decisions on disciplinary issues." Writes another employee: "This place breeds anxiety and lacks integrity. Help!" THESE 100 BEST RESULTS, which show lower employee satisfaction combined with better compensation at large companies, don't surprise Marylhurst University's Todd Harris
in the least. Harris, who chairs the MBA
program and consults with small businesses across the Northwest, points to a nationwide study in 2000 that found that management employees make 15% to 30% more at large publicly traded firms than they do at smaller, owner-controlled (i.e., privately held) ones. "At larger companies, there's a trend toward professionalization," says Harris. Large-company employees are often most comfortable knowing their precise job description. They want to understand where they fit in the corporate structure and how they'll be compensated. "They want a salary that matches national or international standards for the job," he says. Harris thinks that for many Oregonians, the psychological attractions of working for a small company outweigh the higher pay and mobility at large firms. "People are generalists at small companies, expert at a variety of tasks," he explains. "The work environment tends to be more relaxed, unstructured, entrepreneurial. There's less churn. Emp- loyees are closer to the owner/managers — they can look them right in the eye. Employees feel like they have a stake in the business — even if they don't have a share." Plus, Harris says, small organizations are catching up on the compensation front, if not in take-home pay and stock options, at least in perks that mean more financial security for employees. "They're increasingly able to tap into better benefit plans, pretax reimbursements, life insurance, long-term disability," he says. "So they're able to look like the big boys. And cost-
conscious small firms can make their emp-
loyees feel more valued — and valuable — by improving the office work environment. Ergonomic workstations and proper training can go a long way toward building morale and white-collar productivity." OF COURSE, FINANCIAL AND JOB SECURITY used to be among the main attractions of working for a large corporation. But no longer, says Adam Davis of Davis, Hibbitts & Midghall, Oregon Business' research partner in the 100 Best survey. In statewide opinion polls, Davis finds that there's more negative sentiment about big business in Oregon now than ever before. "In the past when employees joined large companies there was certainty and stability — the company wasn't going anywhere," he says. "Today, people see these big businesses coming and going with mergers and outsourcing, and they perceive that they get tremendous tax breaks. Even small-business owners say economic development activities are only helping big businesses. Then we read that they're hiring part-timers to avoid paying benefits and they're bringing in workers from out of state." Davis says that small-business employees expect direct access to the boss, to be asked how their personal life is going and to provide input on decisions affecting the business. "Involvement in decision making is important for people," he says, "to know that your values, beliefs and attitudes are being considered in the direction that the business is taking, to know that your efforts are appreciated in making the
bottom line." NOT EVERYONE BUYS the-"small-is-beautiful" mantra — not by a long shot. According to Thomas Kelley, a principal in the Portland office of Boise-based HR firm AmeriBen, small companies can be the worst kind of trouble for employees. "You can have a small, family-owned company," he says, "and they want to do what they want to do. There are no rules and no procedures; they don't want an employee handbook; employees don't know where they stand and there's favoritism." Kelley, former national chairman of the Society for Human Resource Management, says that if small businesses want to build loyalty and morale (not to mention avoid employment lawsuits), managers and owners must adopt HR procedures that are routine in big firms. His checklist includes having an employment application, a handbook for employees and another for supervisors, plus formal job descriptions, salary ranges and policies for dealing with which employees are exempt from state wage-and-hours laws. For his part, Wells Fargo Bank employee Conall Callen has nothing against small firms — he just doesn't want to work for one. The clean-cut, upbeat 33-year-old took a job as a part-time teller at Wells Fargo (No. 14 large company) 10 years ago. He ended up running the Lloyd Center branch and was recently promoted to district manager. "Because our company is so large, there are a lot of different career paths to take," he says. "I can train on one job while doing another. It's not a question of whether a position will open up but when. It's a competitive learning environment. At a small company, you can get stuck because the institution needs you where you are and there's no one coming up to replace you." Callen, who studied fine arts in college, likes the intense camaraderie of working for a big bank and he isn't the least bit afraid of being downsized, outsourced or made redundant by automation and online banking. "We've had 10 years of continuous growth," he says. "There are always more employees, not less." Wells Fargo branch service manager Patty Lyts, 51, agrees: "With my knowledge, I feel like a valued asset. And the 401(k), medical benefits, paid time-off — all that's very important to me." But Lyts has had her moments of alienation. She was absorbed into Wells Fargo in 1996 after a long career at First Interstate Bank, and many of her former co-workers lost their jobs or quit after the merger. She was initially unhappy with Wells Fargo's emphasis on automation and efficiency, which she thought came at the expense of customer service. Now, she says, Wells Fargo's seen the light and she's glad to be training tellers to do the kind of customer-focused banking she believes in. Adam Davis readily acknowledges that satisfaction and empowerment aren't the sole province of small employers. "Large companies can do this too," he says. "At places like Wells Fargo and Starbucks the
loyalty is amazing. Each store is like a small business. They celebrate every holiday, dressing up and enjoying themselves. It's more like a family." Or, like a big company acting like a small company — and winning. [SIDEBAR] No. 1 SMALL: STAFF FINDERS TECHNICAL There's a job for everyone How do you make your staff really satisfied? Have them find staff positions for other people. Companies whose bread and butter is temporary and permanent staffing shot to the top of the 100 Best this year. Consider Staff Finders Technical of Oregon, the No. 1 small company. Walking into the company's hectic headquarters in a no-frills office building in Beaverton, you wouldn't expect to find 15 people who can't wait
to get to work every day. The phones ring incessantly, and — at least on payday — there's a steady parade of temporary
workers whom Staff Finders has placed in electronic assembly and call center jobs across the Silicon Forest. "There's a job out there for everyone," says operations manager Julie Adams, adding that the work's deeply fulfilling, even if it's not glamorous or high-paid. "We're not in a commodity business, and money isn't the bottom line," she says. One perk for Adams is variety. "I'm sales, customer service, interviewer, mom, counselor," she explains. A healthy dose of practical psychology doesn't hurt either, as when she helped a minimum-wage assembly worker deal with his father's sudden death. Then there was the time she coached a chronically fearful woman to go to her temp job — even though it was raining outside. Perry Latuharhary is a 25-year-old Indonesian immigrant who started out as a Staff Finder temp before being brought into the organization full time. "This is the only agency that found me a job — the others
didn't even call me back," he says. "There's a family feeling — we cover for each other. We try to send out this radiant feeling — we're here to help you, you're not just a number." Rhonda Waterhouse-Rosier, the company's president, founded Staff Finders because she didn't want to be a number. She had worked for 15 years at a top national firm — Olsten Staffing Services — delivering strong sales results. Then, she says, a new management team came in. "They were number-crunching and less people-oriented. In an HR company that disturbed me." With a $100,000 Small Business Admin-istration loan, Waterhouse-Rosier and her husband, Rick Rosier (who is the company's training manager), founded Staff Finders in 1997. A plaque on the wall behind the reception desk reads: "God loves you today — every single moment." Rhonda and Rick say there's nothing explicitly religious in their running of the company, though they do use phrases such as "biblical" and "ethical" to explain their business values. When training new circuit-board assemblers, Rick tells them to think of someone's grandmother. "What if this circuit board goes into her pacemaker," he asks, "and it fails in two years even though it has a 10-year warranty? How would you feel then?" Rick and Rhonda call Staff Finders "business as ministry," a place that helps people get a leg up in the world. "It's a high to place someone at a job," says Rick, "and then have them come back and cry." — Mitchell Hartman [SIDEBAR] No. 1 LARGE: EDGE WIRELESS Life on the Edge Think life is tough on your side of the cell phone? Try being the customer service rep answering your service call. She probably earns a lousy wage, is cramped into a cubicle and is waiting for her company to be merged, downsized or outsourced. Last year alone saw the merger of Cingular and AT&T Wireless, then Nextel and Sprint, with tens of thousands of jobs possibly on the block. So how does Donnie Castleman, the president of Edge Wireless, get his employees energized to come to work? Edge's secret is that it's held onto a homey, rural-West niche while mixing in big-city benefits. A cellular provider specializing in rural markets across the Pacific Northwest, Edge is this year's No. 1 large company to work for, a year after clocking in at No. 2 among small companies. Edge's growth has been blowing the roof off its Bend headquarters and scattered satellite locations. The 5-year-old company added another 93 employees this year (to reach 290) and topped $100 million in sales. "We're growing so fast, it's hard to laugh and be a small family," Castleman recently told a crowd of headquarters employees packed into a Bend hotel conference room for the company's year-in-review gathering. Later, an employee quipped that new hires just meant "more extended family." Executives kicked off 2005 by announcing $300,000 worth of salary and wage increases to keep up with Bend's rising cost of living and also to reward call-center reps for performing more like human beings than drones. "We were competitive with iSKY and T-Mobile [call centers in Bend] but we expect more from our reps," Castleman says. "They're not scripted." Edge also covers 96% of full-timers' health care premiums and 90% of dependents' premiums. It offers up to $5,000 a year in tuition for continuing education. It was Edge's rural quaintness that attracted Paulette Page, a 58-year-old retiree who rec-ently returned to the work force. One-third of customers walk into their local Edge stores to drop off their bills every month. Subscribers work in forests and on ranches from Jackson, Wyo., to Sonoma County, Calif. Employees visit clients using the company's Pilatus twin turboprop plane and talk to them daily. "One day I was talking to this rancher in Wyoming and the wind was swirling. I had a great vision of the Tetons rising up around him," Page says. It's no secret that Castleman and partners Wayne Perry and Cal Cannon built the Edge network in areas where they could fly-fish and collect wine. But they also want to position Edge as starkly different from bigger players in the wireless marketplace. "I'm not a Starbucks guy — I feel like the herd when I go in there," Castleman says. "I seek out the local mocha shop. Rural America likes relationships, to feel like they're being treated special." Edge's independent streak, and its seeming immunity from cellular reality, may not last. Castleman and his partners will consider paying off capital costs and snagging some proceeds by selling to Cingular in 2008 (AT&T Wireless was a partner at Edge's start). There's no promise that employees will have a spot at Cingular. But they won't be hung out to dry, either. Each year, Edge sets aside funds for each employee, and those with at least six years at the company will get one year's compensation at buyout time. Says Castleman: "We wanted a model where employees would be rewarded." — Oakley Brooks
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