On “Best” Company Lists and the Incentives they Create

Lists that tout the “best” companies without actually measuring what the “best” is can be problematic in today’s image over substance world.

Liz Ryan, Founder and CEO of Human Workplace, writing as a contributor to Forbes, outlines how “best companies to work for” lists get the whole thing wrong.


The operative passage (and I hope you read this after you’ve already clicked the link above) is this:

“I don’t trust “Best Places to Work” lists, because I was an HR person for five thousand years. I know that you can have lovely ­looking policies and programs for employees, but they don’t mean anything if the air in the place is heavy. If it isn’t a fun place to work — if people don’t trust one another, if the managers treat the employees like children, and if you can’t bring yourself to work all the way — then weight machines and free lunches can’t make it any better.

Unfortunately, it’s easier for some management teams to talk about gyms and lunches than to talk about fear and trust. They are too fearful to talk about fear!”

In taking down the “Best Places to Work” lists, Liz goes on to take down the game that results in them, namely that companies employ them as PR and branding programs.

She says:

“‘Best Places to Work’ listings are PR stunts that aren’t based on real employee feedback.”

But, there’s more…

I have a somewhat ambivalent to negative point of view on these sorts of lists. Having worked for and within companies that are featured on various and sundry of them, I think that Liz Ryan’s take is probably right.  Still, the lists that I’m most familiar with do make an effort to take in employees points of view, and they certainly do knock out companies for not meeting a given bar on the employee survey side.

So, I suppose there is some integrity to them.

But they do cause problems. And, I figured I’d list a few points that make these lists, their impact, and the incentives created around them a potential problem for the companies and the very people they are intended to help…namely all of us reading the lists and using them to make choices.  Some of the problems include that:

1. The inputs and nominations for the lists are self generated – This is essentially Ryan’s point:  If you look at the content generated for these lists, it is generally provided by the employers themselves.  In some cases, policies and perks are in the mind of an executive when they are put on paper explicitly for the survey, and it’s never referenced again.  Face it, it’s a fact.  Ryan basically says if you want to know whether a restaurant is a good one, don’t ask the proprietor, ask the patrons (and, especially, erstwhile patrons).  If you want to know whether a policy is in place, don’t ask the owner of the policy, ask 15 other people and see what you get.

2. The lists drive companies to plan around them –  Companies view the lists as critical to successful branding and talent attraction, and so they create executive incentives for their company to be on them. Human Resources and other executives are given incentives, sometimes heavy ones, to get on a given list.

3. The incentives, of course, can have unintended consequences –  When executives are incentivized not with creating a “best” company, but rather with crafting a “best” response to a “best” survey, then behavior can get confusing and, frankly, cynical.  Real issues that are brought to the fore (say in terms of fairness or application of policies) but that have no bearing on the surveys (which may not test for these hard to get at issues), are dismissed as “unimportant.”  This may sound harsh, but incentives matter. In the worst cases, less than mature or overly incentive-driven executives huff and puff at people who actually bring up real issues that don’t matter to the “bests” lists.

4. Surveyors stroke the egos of executives, creating an incrementalist approach to change – The surveyors, who do in my experience give feedback to companies that participate but do not make their lists, feed the egos of the executives (not the needs of the people) in dangerous ways by constantly explaining how “close” a company has come to making the list. It’s a “just a little more and you’ll be there” exercise.

I have yet to hear of a “bests” list survey team that will walk into a C-suite and say “Hey, bub, you aren’t even close…the people here not only dislike working here, but they dislike you and your team; and think you are only trying to make us, the survey team, happy.”

Such a surveyor wouldn’t last long.  So, those messages are given are incremental at best. “Just a wee bit more engagement,” or “we can see your progress and encourage you to keep doing what you are doing” is what gets said.  The implication is that executives are rarely caused to reflect by not making the list.  In the absence of the ego stroking “independent” evaluator, execs might have to take more drastic measures to change a culture in freefall.

5. Executives can revert to blaming in some unsavory ways – With knowledge that their organization is “so close” to making the list reinforced by the survey teams, execs might resort to blaming the organization or, in extreme circumstances, the survey team.  The “our employees don’t know how good they have it” ad hominem is a useful tool when explaining middling survey results and other yellow flags.  As a bonus, execs will also blame the survey team for mis-timed surveys (for instance for surveying during times that are too hot, too cold, too busy, or too boring).  When you are “so close” you look for small reasons for the miss, not big drivers.

6. Companies getting “so close” start teaching to the test – The lists become the “thing” and not the outcomes the list was intended to measure. Companies start teaching to the test.  They solve for a gym when a gym isn’t on anybody’s list.  They solve for engagement by throwing parties and handing out t-shirts when engagement is really about a much harder search for common meaning.  In short, they change the construction of a complex interpersonal environment into a check-the-box test; and fail in the process.

7. They focus on the survey when it really doesn’t fit – The “test” might not even fit a given corporate environment. For example, many of the “best places to work” lists are overloaded with professional services, marketing, and “knowledge work” firms and underloaded with manufacturing, materials, and blue collar firms.  The time and energy wasted in responding to a PR exercise could be better spent on improving the human dynamics in the actual company; but the survey distracts from this.

8. Sometimes the best companies know better – I know of at least one extraordinary global firm that has wrestled with the decision on whether to take the time and energy necessary to participate in these surveys. The reason?  The company defines great for itself, and doesn’t necessarily seek outside validation. It’s a compelling argument; but it MUST come with a highly reflective, listening-oriented leadership team (and it does in this particular firm).  The implication of this “opt out” factor is that people looking to due diligence a potential employer really can’t tell anything by the lists, because sometimes great companies skip the exercise altogether, and opt outs aren’t necessarily publicized.

9. Companies ignore and sometimes play into the conflicts of interest inherent to these surveys – This is perhaps the most critical factor in the “best” survey business, so I’m going to take a few more paragraphs on it.

As a rule, these surveys are meant to make the surveyors money. They are rarely if ever a public service.

Any businessperson can tell you that an activity that produces a salable report every…single…year better come with some provocative changes every…single…year or else what’s it good for?  Imagine a magazine that had the same article every month. That is what you would get if the surveys didn’t mix it up.  So, the surveys are geared to be interesting PR, and that’s what the surveyors want from their participants.  It’s not clear that interesting PR and highly engaged, stable, effective workforce always go together.

Desiring churn in the name of salable product is the first conflict of interest.  After all, companies staying on the list year after year is actually not what is best for the surveyor selling its results.

Farther than this, some survey companies have gone so far as to attempt to create franchises around their surveys, including consulting firms, licensing agreements, and any number of other entanglements that can start to look like good old payola.

To wit, in October 2014, David Lazarus at the LA Times posted an article about the conflicts inherent to the business model used by Ethisphere in creating its “Worlds Most Ethical Companies” list.  His assertion?  Companies pay to use the Ethisphere logo, they pay to have their survey processed, and they pay to be a part of Ethisphere’s events and alliances. They can also pay Ethisphere to benchmark their ethics programs outside of the survey.  All of this while Ethisphere serves as, ostensibly, an independent evaluator.

Ethisphere’s issues as an impartial evaluator have run hot and cold for years (starting with an article in Slate in 2010 that was quite scathing prior to some restructuring by Ethisphere, and later articles have defended or attacked their practices).  As an executive and advisor, I have been on the inside of at least 9 of the companies honored by Ethisphere, and while believing strongly in the principles that Ethisphere hopes to uphold can also say that, on the ground level and when it comes to individual executives: Your mileage may vary.

Ethisphere’s “most ethical” list gets a couple of lines from me because out of all the topics that “best” lists can cover, ethics is the one I’m not sure you can every, really survey.  The late collegiate basketball coach Dean Smith was known for once saying “you should never be proud of doing the right thing, you should just do the right thing.”

I think there’s a lot of truth to that.

No one ever says “They are the most ethical, be sure to ask them about it.”

To know a company’s ethical bearing, you have to go to the source of ethical tension, which is in the defining moments faced by that organization’s leaders every day in dealing with all stakeholders. I’ve said it before:  A defining moment is when two fundamental beliefs are in conflict with one another–people vs. profit dilution, transparency vs. legally required disclosure, honesty or efficiency.

It’s tough to say which company is “best” during those moments of truth, because many companies and their leaders haven’t had to face them all that often.  Impeccable ethics don’t reside in policy and procedure.  They reside in decisions and actions.

Being untested (or, frankly, merely the best at keeping our dirty laundry in the hamper) is not grounds for being labeled the “best.” The same is true of pretty much any subjective “best” list, whether it is best places to work, most reputable, most welcoming, most flexible, or otherwise.

Go to the source.

And, that’s where Liz Ryan leaves it, as will I…

 Liz Ryan says:
“If you want to hear what employees think about a workplace, check out the reviews on Glassdoor and remember to trust your instincts above all other sources.”

The short advice from me for those looking to due diligence a company from a reputation, ethics, or work environment standpoint is this:

  • Go to Glassdoor–just as Ms. Ryan says–if you want to see what people think of their company and how that is trending


  • Lacking a reliable base of responses on Glassdoor (which is still building), I’d go to the source. LinkedIn has made that maddeningly–for bad employers–simple.  I say maddeningly only because bad employers have lost control of the messaging.


  • For other issues, I’d go to companies’ communities, suppliers and customers (current and former) if I want to know about its ethics. And finally,


  • I’d be sure to trust my gut when things seem iffy–if the air seems heavy, it probably is. 


My advice for corporate execs thinking about how to “use” these surveys for PR or other purposes is threefold:

  • First, focus on the issues, not on the test. I’d, honestly, focus on what people want compared to the mission of the organization vs. what some list tells me my organization should look like.


  • Second, sure, I’d reference the surveys and what gets people excited outside my company–one has to attract talent, but I’d also ensure the internal voices are the most listened to.  I’m not sure that’s always the case.


  • Finally, consider the straitjacket that being on such a list might actually represent before deciding to participate.  Being called reputable by somebody who really doesn’t want you to be called reputable every…single…year should give you pause when you think about the implications of falling off such a list.


Oh, and I’d also talk to people who used to work there.  They give you insight and in most cases have nothing to “lose” by sharing a bit.

Once again, LinkedIn has made that a piece of cake.

Know what great is for you and the organization you lead, and work to represent it through thought and action.

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