What's wrong (and right) with "best company to work for" lists

I have never been a big fan of “best company to work for” lists. They exist in many countries, and are normally sponsored by a high profile entity (Fortune magazine in the US, The Sunday Times in the UK and Deloitte in South Africa, for example). Companies normally pay to be part of them, and the results are based almost exclusively on survey forms filled out by employees and employers.

The reason I am skeptical is because I have seen how some of the companies who are highly rated act. One company had all their staff fill out the “anonymous” survey forms in the HR director’s office. Another company times its annual staff roadshow and announcement of bonuses deliberately to happen a week or so before the surveys are handed out. And so on. And, of course, some companies in every industry just don’t enter.

So, a pinch of salt is normally needed. A few weeks ago, Lucy Kellaway, the FT columnist turned her considerable gaze on the Fortune magazine 2011 list. As she often does, she helped me understand my disquiet about this part of the corporate world. And she even suggested an alternative. Read her full article at the FT site, or an extract below.

A good employer offers more than Botox

By Lucy Kellaway
Source: Financial Times, January 30 2011

Last week, Fortune magazine published its latest survey of the 100 best companies to work for in the US.


… The magazine states that its ranking is “the most extensive employee survey in corporate America”. Indeed, to compile it, an awful lot of questionnaires appear to have been sent out, requiring the employees to complete a “trust index survey” and employers to conduct a “culture audit”.

Many of the companies that come out top of this exercise turn out to offer some pretty fancy benefits. One company has a clinic that gives staff Botox in their lunch break. Another teaches its employees Zumba, “a Latin-style dance exercise”. A third offers on-site pet care facilities and a fourth makes its corporate jet available to employees when there is a death in the family. A fifth gives members of staff having trouble getting pregnant $25,000 towards IVF treatment.

… But even if these perks were all things I wanted, they would make no difference to my assessment of whether my employer was a good one. … The problem with Fortune’s rankings – and with all similar ones – is not that the exercise is a daft one. Actually, it is quite worthwhile. It is helpful both to prospective employees and to managers. The problem is that it makes an extremely simple thing seem fantastically complicated.

We all know what distinguishes a good employer from a bad one. A good one provides four basic things. First, it makes sure that everyone has a proper job to do. Second, it pays them fairly. Third, it makes employees feel that their efforts are recognised. And fourth, it gives them nice people to work with. That’s all: there is nothing else.

Fortunately, there is an easy way to measure whether a company is succeeding at these things. It doesn’t involve answering tiresome questions on long feedback forms. It does not require any examination of benefits or of corporate social responsibility policies. There is nothing subjective about the test at all.

It simply measures how long people stay with a company. This is the only consideration that matters. … [Lucy goes on to suggest how this should be measured – she makes a lot of sense. Read her suggestions at the FT site – free subscription required].

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