The 'Best Companies to Work For': HR's Catch-22

Is your company a best place to work? And what does that really mean?

I’ve been thinking a lot about the new Fortune 100 Best Companies to Work For list that was released last week.

These lists are an annual tradition and you might wonder if the grass is really greener at a “best” company. Or if you’re in HR, you might still be recovering from the months-long campaign to get employees to take the survey for your own company — more on that later.

I’ve been crunching some of the numbers lately, and I’m seeing a shift in which companies show up on the list.

Here’s the data:

• Fourteen companies that made the list in 2018 did NOT appear on the 2019 list. Many of those companies had dominated the list for years before they disappeared this year — we’re talking notable employers such as Nordstrom, AT&T, Aflac and American Express.
• Google sat at the top of the list for four years in a row (2014 through 2017), but they have completely dropped off the list since then.

Those numbers show me that some companies have just stopped applying. Why?

The answer is pretty simple. It turns out that being a “best place to work” is HR’s Catch-22. We all want to be recognized as a best place to work — but our workplaces can stop being one of the best once we make the list.

I know how it sounds. But here’s what I’ve found.

The Metrics Are Inherently Flawed

Organizations worldwide have rethought the traditional annual performance review. We recognize they’re an antiquated model for providing feedback. Annual reviews gives us a single snapshot in time that may not give a full picture of an employee’s strengths and opportunities. That’s why organizations are advocating for continuous feedback between employees, managers, and project teams.

As employees, we expect customized, tailored feedback presented more frequently. No two employees are the same, and personal development is enhanced when we make sure development experiences are personalized, timely, and relevant.

That’s why I have two issues with the Best Companies lists’ approach. First, we don’t have the same metrics for employees across departments, so why would we have the same metrics for companies across industries? It goes beyond comparing apples with oranges; it’s like comparing apples with french fries.

Second, a two-week survey once a year does not accurately portray an organization’s “Best-ness.” When you take that once-a-year snapshot, what’s happening at the company? Did you just report earnings? Go through a layoff? Acquire a competitor? Divest an underperforming asset? A snapshot does not make for a full picture, and I’d implore the Great Place to Work (who administers the Fortune survey) to rethink their methodology. Annual reviews aren’t good enough for employees, so why are we still using them for organizations?

Culture Doesn’t End With Winning

Organizations pride themselves on company culture and the strength and veracity of their employer value proposition. In theory, a “Best Places to Work” list is a recognition of achievement and arrival, but culture is fluid, personal, incredibly difficult to encapsulate, and not easily changed.

Being on the list sounds like a positive thing for an organization. Think about the attention it can bring your business, particularly in light of a very tight labor market.

But I know from firsthand experience that maintaining one’s place on a list often results in unintended consequences. Employees are savvy enough to weaponize placement with a simple question: “How do you want me to answer next year’s survey?”

The pressure on an organization to maintain its place on the list may result in increased escalations and one-off exceptions to tried and true policies. We all have to make exceptions here or there, but inviting the exceptions is a mistake.

So making the list may require acquiescing to employees to maintain positioning and presence? A cultural Catch-22, indeed.

You’re Riding An Emotional Roller Coaster

So, let’s say you make the list one year. You put out press releases, you unfurl a banner on the side of your building, you high-five and celebrate.

The next year, you open the list when it’s announced and you scroll…and scroll…and scroll. Aha! There you are! At the…bottom…of the list. Or perhaps you’ve dropped off the list entirely.

What does it say to your employees and your customers if you make the list again, but you’re ranked much lower? What does it say when you disappear entirely? Was making the list worth it? What does that lower ranking mean about how working at your organization has changed over the past year? And if you intentionally decided to stop participating, do you put out an internal announcement explaining why?

Take the example of The Container Store over the past four years. As an HR professional, I would walk into my local store and observe in-store signage proudly displaying their rankings, but having moved from #14 in 2016, to #49 in 2017, to #93 in 2018, and fully off the list in 2019 must be incredibly painful for all involved.

When you make the list, you’re signing up for a roller coaster of emotions. Which brings me to my final point…

It’s Just a List

A list is just a bunch of words and numbers. And, frankly, you don’t need a list to tell you whether your company is a great place to work.

I met with a CHRO recently who has been in her role for just over a year. When I asked whether one of her objectives was to make this list, she laughed in response. She told me, “There are a thousand ways every single day that I can demonstrate we’re a great company. That’s what gets me up in the morning. That’s my true north. That’s why I do my best to connect with the wonderfully diverse group of employees who make this organization possible.”

And her most profound conclusion?

“I don’t need a list. I need to listen.”

Originally published on the Voice of HR.