Perks/Culture Make Happy REI Employees
Benefiting from its work culture as well as the many perks that extend to part-timers, REI for the second year in a row ranked highest in Glassdoor’s 2013 Best Place to Work.
The top-50 list across industries was compiled based on close to a half million company reviews submitted by employees to the job search and career website over the past 12 months. Employees rate their overall workplace satisfaction as well as "Career Opportunities," "Compensation And Benefits," "Work/Life Balance," "Senior Management," and "Culture And Values." Glassdoor’s proprietary algorithm ultimately determines the overall ranking.
REI earned a workplace satisfaction rating of 4.0 out of 5.0. The chain score was average in Career Opportunities (3.0 stars), with some reviews stating that relocation is often needed for advancement.
But Compensation & Benefits, Work/Life Balance, Senior Leadership and Culture & Values all ranked above average, rated 4.0 stars each. Particularly praised was the benefits package that includes free life insurance, basic low cost health insurance and dental insurance as well as perks such as generous employee discounts even for part-time help who put in enough hours. Also commended by many were flexible schedules for those in school or working second jobs, supportive managers with a commitment to teamwork, friendly staff, the chain’s passionate customers, and community involvement. Its CEO Sally Jewell scored an 89 percent approval rating.
Pay was said to be higher than average but some still complained it is still too low for a primary job. Other negatives include pressure to sell co-op memberships, having to work holidays, and challenges getting adequate hours each week.
Overall, REI ranked 21 on the top-50 list. The other retail-related companies on the list were Trader Joe’s, coming in at 24; Apple, 34; IKEA, 43; Costco, 46; and Starbucks, 50. Their scores ranged from 3.8 to 4.0.
Among a few other larger retailers, Walmart scored a workplace satisfaction rating of 2.9; Target, 3.2; Amazon, 3.3; Nordstrom, 3.5; Macy’s, 2.9; Whole Foods, 3.6; Kroger, 3.0; and Safeway, 2.7.
The top ten across industries were Facebook, McKinsey & Co., Riverbed Technology, Bain & Co., M.D. Anderson Cancer Center, Google, Edelman, National Instruments, In-N-Out Burger and Boston Consulting Group.
Discussion Questions
Are perks and overall culture becoming more important drivers of employee satisfaction for stores vs. pay levels? What do retailers like REI, Trader Joe’s, Apple, IKEA, and Costco share in common that make them appealing to employees?
Study after study proves that a healthy, stimulating work “environment” matters more to employees than pay level alone. People like to be challenged, they like to learn and grow professionally. Sure, the pay should be competitive, but you do not have to pay the most to attract the best talent.
Develop an employee culture, train your staff, take care of them. Make them feel they are a huge part of the success of the business, You are either caring or you are not, empty words and hollow mission statements are just that. Take care of your staff, they will take care of you.
Perks and culture are important, as they somewhat compensate for low pay levels at retail. Let’s face it, it’s hard to support oneself on a retail salary. The fact that the top retailer on the list was only rated #21, doesn’t recommend retail overall as a good career move.
The top retailers on the list all have an esprit de corps that make them appealing. They tend to take better care of their employees, pay better wages and/or offer flexible scheduling. Other retailers would be wise to follow their lead.
This debate was put to bed a long time ago so there is no ‘becoming’ to it. Culture rules.
We tend to minimize the trendy word “culture” not realizing that it refers to a huge and comprehensive human experience of the deepest and most spiritual nature. Leave the ‘perks’ out of it, that’s just another version of pay.
When your sense of life purpose—your destiny if you will—is fully congruent with your work you find the meaning almost totally absent from general society today.
Culture is about meaning; the meaning of our work. Wrote a book about that titled “The Profitable Power of Purpose.” What most corporations think of as “mission” or “vision” is usually nothing more than superficial mush. That’s why they try to compensate with pay and perks and still barely get a passing grade on the Glassdoor report card.
It’s meaning that makes the world go round.
The culture of perks and free stuff is working well in America’s retail and political environments today. Pay levels usually follow.
The magic that works for REI, Trader Joe’s, Apple, IKEA and Costco is their well-understood business plans, which include friendly human treatment of employees and customers. It could be called Retail’s Rock Science.
Overall culture is key. Employees should be well-educated on the brand and feel they are an integral part of the brand experience. If they feel valued, then the customer will feel valued.
Perception of the brand promise also is a factor. REI’s unique co-op culture most likely attracts employees that will be more loyal to the brand. Similarly with Trader Joe’s and the other brands, when employees feel more of an affinity with the company and product, they are more likely to be powerful brand advocates.
The entire experiential package is becoming more compelling to individuals than just the money. The additional challenge is to match the brand culture with the correct people.
Relevancy is not just for your shoppers, it’s also for your employees. Creating a culture of innovation and participation has proven successful at REI or Trader Joe’s but also Zappos, Southwest Airlines and the Shake Shack in New York. Creating an environment and a culture in which your staff becomes and then reflects the brand onto your guests and shoppers has proven to be an invaluable component to success time after time.
This is clearly not an easy thing to accomplish as more retailers would have been replicating this approach a long time ago. Your staff and employees are your best and most valuable brand ambassadors and if they’re happy and inspired, so too will your guests and customers.
Companies like REI and Apple attract passionate employees who are generally already fanatical about the brand. Good benefits and culture are most certainly big drivers in retention and happiness of employees, but how much of a factor is the commitment and passion for the brand and product they are representing? Probably a pretty big contributor.
REI, Trader Joe’s, Apple, IKEA and COSTCO all create a unique, interesting and exciting work environment focused on teamwork, friendships and customers. To be fare, none of these retailers have had to face tough layoff situations. This helps with morale and stability of the workforce. Of course one could argue that the reason they have not faced tough obstacles like layoffs is because of the great workforce and morale. Pay will always play a key role in an employee’s happiness at work, since income is required to buy the basics (food, shelter, clothing). I do believe, however, that today’s workforce is willing to sacrifice higher pay for an exciting work environment and unique perks.
One simple example is the Apple store. During the holidays my daughter and I were browsing an Apple store when suddenly all the employees started clapping really load (customers joined in). I looked at the front entrance and in walked a new employee for their first day at work. The energy in the store was absolutely amazing. Employees and customers felt the energy and were all excited to be part of that special moment. That simple touch is what makes Apple a little more special than your run-of-the-mill retail store. Agreed?
In his famous 1943 paper, Maslow described the “human hierarchy of needs” to explain motivation. To apply his findings to the retail world, it is important that a retailer can offer the operating environment (infrastructure, business processes, product mix) that supports a wage structure sufficient for store employees to earn a decent living. Once they have met their basic needs, wages quickly become a secondary factor and the corporate culture becomes a sustaining factor.
We often see this happen when a new CEO moves into an organization and without increasing employee wages is able to improve the company’s results by improving the work environment. New infrastructure, business processes, and product mix lead to a more efficient work place, increased moral and greater gross margins.
Everyone can point to the high school football coach who takes over a losing team and turns it into a winner. They aren’t even being paid. Their basic needs are provided by their parents. The difference is the new culture that the coach is able to introduce on the players. Retailers must work to make sure salaries provide for the basic needs of their employees. Then they need to work on the culture which motivates average employees into winners. I think retailers too often miss the opportunity that comes from team building employee motivation.
No, perks and overall culture are not becoming more important drivers of employee satisfaction for stores vs. pay levels. They have always been more important.
Somehow management seems to forget what they should have learned in PSY 101. Money is not a motivator, it is the lack of adequate pay that is a de-motivator.
What the chains you have listed above have done is paid an adequate wage and then created a culture that is motivational and rewarding in non monetary ways.
The real question is why haven’t most organizations realized and implemented these practices years ago?
You can either pay and reward up front, or pay on the back end which always ends up costing more.
The company I see missing from the list shown is The Container Store. It has been obvious over the years that the culture as well as the perks have proved them to be one of the top retail companies to work for over the years.
I am sure both perks and culture are almost equally important based on what one is searching for in a company and position. Flexible hours and ability to work from home will become more important in the next few years.
Anyone who has a job, or actually wants one, would like a culture of feeling like they are appreciated. Great perks and outstanding benefits should be the goal for all employers. Now that I just woke up, I realize that this culture is very tough to attain as a small business, who struggles to cover the basic wage and benefit package to their employees.
The extras are nice, and in this new environment of mandates, new work rules, increasing health care costs, new surcharges from every wholesaler on almost every invoice to cover their increased costs, where are we going to find the extra profits to compete with the Big Boys, like Apple, or Zappos?
I think we can do some small things to make our employees feel good about their jobs, and in my store, I offer free lunches during holidays, flexible work hours, major holidays off (a good one), creative ideas that flow back and forth, and training that allows me to let them engage in customer service the old fashioned way.
I can not provide the extra goodies like them, but my employees can talk with me about any issue, and be a part of the solution. Do your best, and don’t ignore the problems right in front of you, or they will just get worse.
I use a simple formula with four questions to gauge this perks/culture vs. pay situation. Do you like the people you work with? Do you like the type of work you’re doing? Do you like what your company stands for in your industry? As a customer would you like to shop your stores?
At the two extremes it’s clear, culture is the main driver to employee satisfaction: with four “likes” culture rules but pay still needs to be in sync with industry and location. If you get zero “likes” then you’re already looking for your next job (can they pay you enough to overcome a bad culture?).
Getting one and three “likes” exhibit similar outcomes to the two extremes. It’s the middle ground of two “likes” that gets interesting as pay and culture do the yin-yang dance in driving employee satisfaction.
It’s sad to me that health care might be classified as a “perk.”
But here’s how I see it: if you really think that the customer experience in stores is an important part of your value proposition, then you need to not only provide a livable wage, you need to provide an environment that is supportive of these employees that are the primary delivery vehicle of that customer experience. If your employees aren’t happy, how can you expect that customers will be happy? And pay is not really the primary driver of happiness—it’s a driver of survival. How employees are treated—with respect, trust, and as an asset to be invested in—is the primary driver of happiness, which is in turn reflected in the relationships that employees develop with customers.
I think this issue is going to come to the fore more and more in 2013 as retailers struggle with how to improve the store experience vs. online. The role of employees is simply going to have to change, and that means changing a lot of the little insidious things that undermine attempts to improve culture – things like “descheduling”, or not addressing toxic employees, or not protecting employees from toxic customers. Not trusting employees to speak for your brand online. Things like that.
And let’s not forget about respect and empowerment. All seen in abundance at these places!
Yes. A happy employee is a productive employee. Keeping employees happy makes for a fun, productive workforce where everyone wants to work harder and for the good of the team. Team environments have been shown to outperform groups of individuals time and again in workplace productivity and satisfaction. Plus, happy employees create an attitude and atmosphere that everyone can enjoy!
Culture and execution is the key. If the employees feel they are disposable cogs in the wheel, they will act like it. When I was in Las Vegas over the holidays, I was told that when Steve Wynn constructed the Bellagio, the employee area in the back is built to the same quality and decor as the customer area. He wanted to make the employees feel they are just as important as the guests. How many retail store break room area have you seen look as good as the front of the store?
Why is this being represented as an “either/or” situation? I suppose if you work(ed) for the French Resistance, or today in some NGO, you can make an argument for sacrifice, but as being nice to people and appreciating their work costs nothing, I see little reason why that can’t come along with a healthy paycheck. As for a company telling me—albeit implicitly—we’re keeping your wages low so we can deliver “superior performance for our shareholders,” but here’s some life insurance to make up for it, no…I don’t think so.
The culture is what drives the organization. To be the best place to buy, you need to be the best place to work.
Perks come in different forms; monetary, insurance, time off, etc. However, one of the biggest perks is employee fulfillment. Happy employees create happy customers.
My favorite way of putting it is this: What’s happening on the inside of an organization is being felt by the customer on the outside.
This is no surprise—employees who believe in the company they work for do a better job. For retail, customer-facing employees who love what they do, create a shopping experience that brings people back. REI employees are great—not only product knowledge and usage, but they are passionate about company values.
Companies like TJ’s, Apple, Costco, and IKEA treat employees fairly, and provide resources to do their jobs, as well as reward them—but more importantly, treat employees as the significant investment and resource they are to help the company prosper.
Perks and culture do matter. I’ve seen comments that say only culture matters, but perks can create a culture. For example, our employee perks not only include health care, but also if a kid is sick and they need to come work from home they can. On Tuesdays one of the guys’ spouse works evenings so their son comes in around 4pm. Christmas gifts to employees and their spouses is annual. Office Birthday parties include gifts. These could be considered perks, but in an office, they create a culture of closeness that encourages friendship and teamwork. Of course pay matters too…. 🙂
Culture trumps and nurtures perks. But it doesn’t guarantee employee satisfaction. Nor does a positive culture guarantee management will be satisfied with employees.
Management still has to select the right candidates, and train them to play in the sandbox. None of this is happenstance.
Yes. A happy employee is a productive employee. Keeping employees happy makes for a fun, productive workforce where everyone wants to work harder and for the good of the team. Team environments have been shown to outperform groups of individuals time and again in workplace productivity and satisfaction. Plus, happy employees create an attitude and atmosphere that everyone can enjoy!
As bricks and mortar stores continue to be challenged by the ease and efficiency of on line shopping, a great customer experience at retail becomes even more important. Employees that feel truly valued and fairly compensated make better, happier, more effective ambassadors for retail stores. It’s only good business, and it pays off.