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5 Lessons for Leaders as they

Build a Great Workplace


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

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 createa worldclass workplace culture.

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.

If one thing was abundantly apparent


at this years 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 five
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.

- China Gorman, CEO,


Great Place to Work

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

What is possible when people are their most


productive, collaborative, innovative and original
selves? Our respective businesses thrive, and you will
reap the benefits 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

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

Great Place to Work Experts and


Conference Keynote Presenters

Leslie Caccamese Bill Emerson

China Gorman

Lori Perlstadt

Katie Popp

Associate Vice President, CEO


Quicken Loans
U.S. Marketing
Great Place to Work

US Managing Director
Great Place to Work

Jeffrey Pfeffer

Thomas D. Dee II
Professor of
Organizational Behavior
Graduate School of
Business, Stanford
University

CEO
Great Place to Work

Terri Kelly

President and CEO


W.L. Gore &
Associates

Victoria B. Mars

Chairman of the Board


Mars, Inc.

Blake Nordstrom
President
Nordstrom, Inc.

Best Companies
Director
Great Place to Work

Creative Technologies
Worldwide

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

5 Lessons for Leaders as they


Build a Great Workplace

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2
3
4
5
Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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
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.

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

Your employees lives are at stake.


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.

When these factors arent 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 organizationsother
than a workplace brimming with
stressed-out and sickly people
includes costlier insurance premiums,
increased absenteeism, lower worker
productivity, and more.

What can employers do to keep


workers healthy? According to
Pfeffers research, factors such as
control over ones work, managing
work/life balance, perceptions of
fairness in the workplace, and more
(see next page) directly impact
employees health.

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

Workplace factors that impact


employee health
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

77% believe management involves them in decisions


that affect their jobs or work environment

2. Overtime and number of hours worked

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

3. Providing social support

87% feel a sense of family or team at work

4. Conflict between work and family


commitments

83% feel they are encouraged to balance work and


personal life

5. Perceived fairness and justice at work

84% believe their workplace is fair and just

6. Layoffs and economic insecurity

85% believe layoffs would only be used as a


last resort

7. Offering health insurance

All 100 Best Companies cover 60-100% of FTEs


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

Jeffrey Pfeffer

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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Action Item
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.

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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
needand it works.

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 wellengrained that they have become
second nature.

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.

Leadership Insights on Shared


Values and Guiding Principles

If you were to go to a Gore site, you would find [a poster outlining Gores values and
guiding principles] in every office and conference room. Our associates use it as they
think about their decisions and what actions theyre going to take. This becomes
the one thing they look at to make sure theyre 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 needand 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. Were absolutely clear thats the way its going
to be. We dont have a lot of rules beyond thatThese 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 cant be everywhere and make every
decision. You need to have a culture and a philosophy that people can
understandbecause we want people to make decisions themselves.
- Bill Emerson, CEO, Quicken Loans

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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Action Item
If you decide to share your
companys 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.

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

Being recognized as a
Best Company is less about
perks and more about the employee
experience.
What people often think makes a
great workplace isnt 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 behindthe-scenes look at the selection process
for FORTUNE Magazines 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.
Thats because more than any other
factor, employees experience of the
workplace determines List placement.
Two-thirds of a companys 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 giftlikenot transactionalin nature (see
Lesson 5).
So by all means, install slides and fireman
poles; scatter about lava lamps and bean
bag chairs. Bring in the manicurist and the
barista, and cater to peoples pets. Just
make sure these things arent 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
profits fairly.
These types of practices will go much
further in helping employees feel that theirs
is a great workplace.

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Your Employees
Experience of Your
Company
Your organization may pay employees fairly,
offer competitive benefits, 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 find out where they can improve, and
what they may already be doing well.

The Great Place to Work Trust Model

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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4
Action Item
If 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.

Leaders need to be on
board for a great workplace

culture to thrive.

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
companys culture. As CEO of the nations
largest online home loan lender, Emerson
has many competing priorities, yet he
and Chairman Dan Gilbert still find time
to lead a full-day session with all new
employees to review the companys
book on culture, ISMs in Action.
It doesnt 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.
Goreregularly recognized as one of
the most innovative companies in the
worldbelieves that an important part
of her role is to align Gores values,
practices, systems, and actions to
reinforce the culture every day.

company. What behaviors can you


model that will serve to build trust with
employees? Are there ways you can
exert your own influence on a smaller
scale, to start moving your organization
down the path of the large-scale change
youd 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
organizations overall stance on being a
great workplace. Said Gorman, Once
something is started, it creates
momentumregardless 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.

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

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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Getting Leaders On Board: A Business Case


How 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 employeesits good for business, too.

100 Best Companies Voluntary Turnover by Industry 2


5.8 %
10.5%

Best
Companies

6.0%

17.1%

8.0%

Information Technology

16.2%

8.7%

Construction & Real Estate

experience as
much as 65%
less turnover

19.4%
100 Best (%)

10.3%
12.6%

Financal Services & Insurance

Industry Average (%)

10.4%

Professional Services

25.9%
38.0%
30
%

20
%

15
%

10
%

5%

25
%

24.5%

Hospitality

40
%

Healthcare

35
%

Manufacturing & Production

1. Blake, R. (2006). Employee retention: What employee turnover really costs your company. ManagerNewz
2. 100 Best data provided by Great Place to Work Institute, Inc. Comparative data provided by BLS.

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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5
Action Item
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.

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

When it comes to your


employees, be generous.

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 leaders 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 mosttheir 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 implementothers, more difficult
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 office with their employeesnot
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 Rocksa day-long, off
site culture camp that reinforces the
companys 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 companys values.
Rooted in the art of storytelling,
employees ultimately create and
performaccompanied by a full band
a team story about what Cirrus Logic is
all about.

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5
TRANSACTIONAL

GIFT-LIKE

Goal is individual advantage

Goal is mutual growth

Low risk

High-risk, vulnerability

Limited information

Transparency of motive

Transaction completes obligation

Open-ended relationship

Same for all

Highly personalized

Currency is money

Currency is trust

When 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.
Valentines Day Bailout | For
employees at Cirrus Logic, Valentines
Day is stress-free, as the company
brings in cards, flowers, 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 dont 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, toowith the help of
Zapposhave been granted.
Birthday Wishes from the CEO | Bill
Emerson: a busy man? Yes. Too busy
to personally send a birthday card and
gift certificate to his employees
children? Absolutely not. Said Emerson,
The simple things are what people
appreciate, and what connects people.

Are your companys practices transactional or gift-like in nature?


This table provides a lens to help answer this question.
Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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Save The Date


September 16-17, 2014
Registration is Now Open!
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

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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Save The Date April 22-23, 2015


Pre-registration is Open!
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

DALLAS TX
Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

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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 Locations
About the Author
Jessica Rohman, M.A., develops
Great Place to Work content
and conducts original research,
furthering the companys
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.

Copyright 2014 Great Place to Work Institute. Inc. All Rights Reserved.

San Francisco - Headquarters


222 Kearny Street, Suite 800
San Francisco, CA 94108

New York City


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

Telephone
+1 415 844 2500

Telephone
+1 646 370 1125

Email
US_clientsupport@greatplacetowork.com

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