Great Rated! and the Improving Employment Deal

Posted by Ed Frauenheim on March 04 2014

ed-frauenheim By Ed Frauenheim

What a difference a few decades make.

Momentum is building toward a universal expectation that workplaces are characterized by trust, pride and camaraderie.

But things were heading in the wrong direction when Robert Levering effectively launched the Great Place to Work movement three decades ago.

It was the early 1980s, and the employment deal was generally a raw one for workers. President Ronald Reagan broke the air traffic controllers strike in 1981, weakening the power of organized labor. People can argue the overall merits of unions. But it was clear that management gained the upper hand over labor after several decades of more-even power-sharing. The philosophy of maximizing shareholder gains took hold, companies began laying off massive numbers of employees and the workplace was often bitter.

Put simply, the employment pact characterized by worker loyalty in exchange for employment security—a deal that had by and large held in the 1950s, 60s and 70s—was disintegrating.

Robert Levering was a reporter covering labor issues at the time. He witnessed the strife and stress of the workplace firsthand. So when he and fellow journalist Milton Moskowitz were approached by an editor to write a book about the 100 best workplaces in America, Robert scoffed at first. He doubted he could find 100 decent ones, and suggested the book be about the 100 worst workplaces. But the editor wanted the positive story, so Robert agreed to try

And he was surprised by what he and Moskowitz found. Rays of hope. Companies where people were happy to come to work, where a team spirit prevailed, where leaders genuinely cared about employees. The first book, The 100 Best Companies to Work for in America, gave rise to a second book. And then to the Great Place to Work Institute, where Robert and his co-founder Amy Lyman aimed to spread the message that companies could and should make a trust-based culture central.

Growing Momentum for Great Workplaces

They didn’t set the world on fire right away. The 90s weren’t much better for employees than the 80s when it came to the employment deal. The economy grew, and unemployment was low. But these were the days of “Chainsaw” Al Dunlap and continued mass layoffs. The 00s rolled around, and offshore outsourcing added to worker worries.

But the better workplace moment began to gain strength. In 1997, Fortune magazine and Exame in Brazil joined forces with Great Place to Work to publish the world’s first 100 Best Companies to Work For rankings. The Institute and its lists became increasingly visible not just in the United States and Brazil, but in country after country where Great Place to Work affiliates opened. There are now Best Companies lists published in 45 countries, and the number will grow in the coming years.

There’s a long way to go before all workplaces are great. As I mentioned in my last post, less than half of U.S. workers have been satisfied with their jobs for seven years straight.

But I think history is on the side of better workplaces. For one thing, the business case is ever more solid that being a good employer pays off. For years now, publicly-traded companies on the Best Companies to Work For List have crushed their counterparts in terms of overall stock performance. Best Companies also have lower voluntary attrition. And case studies—like that of San Diego-based health care provider Scripps Health—show that firms that focus on a trusting culture ramp up their profits.

The Virtuous Reputation Cycle

Then there are the consistent signs that the public increasingly demands that the companies in their lives are high-road, upstanding organizations—which includes being a great place to work. A study by Corporate Responsibility Magazine and recruiting company Allegis Talent2 found that 75 percent of people would not be willing to work for a company with a bad online reputation, even if they were unemployed.

There’s a virtuous cycle at play here. Companies with a good reputation attract the most talent. And if the reputation is deserved, employees share as much and the reputation improves.

Great Rated! is an engine to power this cycle. It is part of the transparency trend whereby companies are exposing—have to expose—their inner workings. Companies rated at Great Rated! get to highlight the best features of working there. But the employee survey at the heart of each review means that job seekers and the overall public are able to get inside a company and learn about its culture like never before.

Armed with this information, people can pick the best prospective employers for their values and tastes—like the way reviews at CNET or Consumer Reports let people pick the right computer or car. And overall, employers are prodded to take their workplace culture to the next level.

There may be something bigger fueling the great workplace movement. Observers have argued that human evolution is heading toward an ever-more enlightened, humane state. Author Steven Pinker suggests we’re moving toward a future defined by cooperation and altruism. Martin Luther King Jr. said “the arc of the moral universe is long, but it bends towards justice.”

Organizations are part of this big historical sweep. Not long ago—just a short 30 years ago—things looked much bleaker for workers in America and much of the world. But these days the employment deal is shifting to combine the security and care of the 50s with the business performance focus of the 90s. Toward a deal that works for workers and companies. We’re in a better place today. And we’re headed to better workplaces still.

Ed Frauenheim is Content & Curation Specialist at Great Rated!