The Best Companies To Work For: HR’s Catch-22

Posted By on Mar 27, 2013


fortunelogo2013-300x400Each year, hundreds of organizations vie for the accolade of Fortune’s 100 Best Companies to Work For, a process governed and managed by the Great Place to Work Institute. Companies with greater than 1,000 employees and at least five years of operations are qualified to apply for Fortune’s list with their smaller brethren eligible for “Best Small and Medium Workplaces” honors. This is a highly competitive process with two-thirds of scoring derived through the Trust Index Employee Survey and the remaining one-third via a Culture Audit across a wide litany of evaluation criteria. It’s notable that 277,000 employees across 259 firms participated in last year’s competition.

So with fifteen years of history behind this extremely marketable moniker, how does a Catch-22 come into play?

The Origins Of A “Catch-22″

Although a commonly (mis)used phrase, Catch-22 is derived from Joseph Heller’s quasi-historical novel about a group of World War II airmen caught in the untenable circle of military bureaucracy and the impact of sanity on their ability (or necessity) to continue flying missions. The gist is that “anyone who wants to get out of combat duty isn’t really crazy” and therefore is sane enough to fly more missions, but if you wanted to fly more missions you were crazy. As described in the book:

“If he flew them he was crazy and didn’t have to; but if he didn’t want to he was sane and had to.” – pg. 56, Catch-22

Still stuck? Another way to think about it is that solving one part of a problem creates another problem, ultimately leading back to the original problem. Glad I could clear that up.

How Does “Best Companies” Create An HR Catch-22?

For the sake of stimulating discussion and debate, here are three examples of the challenges encountered by the Best Companies to Work For. Readers should note that I’ve spoken with several current and past Best Companies to corroborate these findings.

Example #1: The Competition Conundrum

You obviously cannot be recognized as a Best Company if you do not participate fully in the application and survey processes. However, you can fully participate in the application and survey processes and not be recognized as a Best Company. In other words, you can survey your employee population and not make the list, thereby signaling to the participating employees that you’re not a Best Company to Work For. Surveyed (and disheartened) employees may therefore leave, either decreasing the likelihood that you’ll make the list the subsequent year (because these positive employees were part of the solution) or increasing the likelihood you’ll make the list the subsequent year (because these negative employees were part of the problem). Alternatively, employees could view the survey itself as a sign that you want to be a Best Company, provided you do something with the survey results to drive change and ultimately do achieve Best Company status. What to do, what to do….

Example #2: Holding You Hostage

If you make the list it means you exceeded the sniff test and your employees believe you truly are a Best Company to Work For. Therefore, you begin to market to current (and future) employees that you are a Best Company. Knowing that being a Best Company is disproportionately dependent on employee surveys, employees exercise their leverage and begin to coerce you into exceptions you never imagined by effectively stating, “You don’t want me to respond negatively on the Best Company survey, do you?” (And no, I’m not making this one up) This results in one offs and unsustainable practices that ultimately cause the company to focus their precious resources on the few over the many, subsequently resulting in falling off the next year’s Best Company survey. And if you do fall off, this signals to your current (and future) employees that you’re no longer a Best Company, which can either encourage you to once again drive change to make the list or discourage people from joining your company who may have helped make you Best Company the subsequent year. Still with me??

Example #3: Playing The Odds

It you participated in the 2013 competition you had a 39% chance of making the Top 100 just by virtue of the math (259 applicants) compared to a 28% chance in 2009 (353 applicants). But remember that more employees voiced their opinion, on average, per company in 2013 (1,069) than in 2009 (229), thus rendering it statistically more difficult to make it than ever before (provided that standards remained the same and the bar wasn’t lowered for 100 firms to make the grade). And with the voracity of the honor waning as fewer and fewer companies participate over time, should you lobby more of your peers to participate in the competition, thereby decreasing your odds of making the cut? Quite the dilemma…

Why Pick On “Best Companies”?

The tone and tenor of this post may suggest that I’m targeting Best Companies with some sort of smear campaign. I’d argue quite the opposite given that research has shown that Best Companies significantly outperformed the S&P 500. Instead, I’m simply suggesting that for every cloud’s silver lining there is a comparable storm awaiting within. Given the amount of time, money and resources applied to this process (combined with a 25% drop in participation over the past four years), I’d ask HR to ponder whether it’s crazier to participate or to not.

My final thought is this. Just as there have been hundreds of Best Companies, there are literally thousands more who will never have their day in the sun. It behooves each employee to assess what makes a company right for them, just at it behooves each company to define what distinguishes them from their peers. Your thoughts and comments, as always, are welcome.

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