Despite the trail blazed by Google and other high-profile Silicon Valley companies, it turns out that pingpong tables, free food, bean bags and massage on demand do not necessarily make somewhere a great place to work.
Ricardo Lange, CEO and president of San Francisco’s Great Place to Work Institute, says while being perk-friendly doesn’t hurt, what people really appreciate are old-fashioned values like respect, fairness and credibility.
Lange says the definition of a great workplace hinges on an employee's relationship with management: employees enjoy working in a culture where trust is maximized through management that provides credibility, respect and fairness.
The institute’s research and surveys have found that for employees to consider their company a great place to work, they need to be able to trust their managers, be proud of the work they’re doing and enjoy working with their peers.
He says Google is renowned for the freedom and opportunities it offers employees, workplace aspects that flow directly from the trust built up inside the organization through transparent communications and a caring, competent management.
In a process which takes the pulse of around 1.5 million employees worldwide each year, the institute surveys between 4,000 and 5,000 companies and compiles best-places-to-work rankings for 40 countries.
Lange points to research showing that the employee satisfaction and engagement highlighted each year by Fortune’s 100 Best Companies to Work For, improve core aspects of the business such as staff retention, productivity and creativity, ultimately raising shareholder value.
He says 26 companies in this year’s rankings had layoffs while others nixed bonuses and merit rises; however, all managed their responses to the economic downturn while maintaining high levels of trust and communication.
North Carolina-based SAS topped the 2010 list. Lange says the software company’s well-documented perks, through cementing creativity and loyalty, were less a reason for employee satisfaction, more a reflection of a company already caring for its highly valued workforce.
The institute has found salaries and other monetary benefits play a surprisingly modest role in what constitutes a great place to work. Last year, for example, SAS did not offer the highest pay in its field or provide stock options. “You’re never going to buy your way into a great place to work,” says Lange.
But just as long lists of perks do not guarantee inclusion in the Fortune 100 list, neither do sky-high salaries preclude a company: Lange notes big payers like Goldman Sachs, Cisco and Intel all made the list in 2010.
What’s critical, he says, is that people regard compensation packages as a fair reward for effort — outrageous and unjustifiable executive enrichment negatively impacts how many employees view their workplaces.