Investing in Staff Satisfaction
Don’t open a shop unless you like to smile.
– Chinese proverb
Embedded in the words of this proverb is the assumption that happy workers are good for business. Most of us have been customers in places where the employees did not seem to want to be there. Attitudes show, and they impact the shopping experience. At worst, unhappy workers can treat customers with indifference or even rudeness. At best, they don’t go out of their way to ensure that customers find what they need.
A 2009 University of Kansas study published in Science Daily found that, "When employees have high levels of psychological well-being and job satisfaction, they perform better." Furthermore, the researchers concluded that happy workers are less likely to leave their jobs. Given the high cost of turnover and the tough competition for retail sales, it’s not hard to see the importance of a contented workforce to maximizing business success.
From conducting over 150 staff satisfaction surveys in retail food cooperatives across the nation, we knew intuitively this is so. But to back up intuition with data, we turned to Walden Swanson of CoopMetrics, the home of CoCoFiSt data sharing, to help us correlate survey scores with financial performance. Walden advised us to use Margin Minus Labor Plus Growth as our key metric: you want the highest margin and lowest labor you can get that does not have negative impact on growth. Based on CoCoFiSt data from the first quarter of 2012, the co-ops with the highest survey scores clearly outperformed the co-ops with the lowest survey scores. [See chart and sidebar.]
So, what do employee surveys tell us about the factors that contribute to positive perceptions of their workplace? Our review of hundreds of question scores and thousands of employee comments shows that the following aspects are most important to the people who work at co-ops.
Effective communication systems
Co-op surveys that reported the most satisfied employees showed high scores on questions about receiving needed job information, giving input into decisions that affect their work, having channels for feedback to management, and receiving timely responses to that feedback. Management philosopher Peter Drucker observed, "Employees will only complain or make suggestions three times on the average without a response. After that, they conclude that if they don’t keep quiet, they will be thought to be troublemakers or that management doesn’t care." To be satisfied, staff must have a venue to speak up and be heard.
Moreover, employees reported a desire to know what’s happening in other departments so they can coordinate work, and to be advised of upcoming changes so they can anticipate and plan. Finally, our co-ops attract workers who care that the co-op lives up to its values. Understanding "the big picture," such as impacts on local farms, positively affects workers’ views of their employer.
To communicate effectively on all these levels, some of the high-scoring co-ops have turned to technology: maintaining an internal communication platform or intranet for staff access, investing heavily in computer hardware and software, providing everyone with a co-op email address, and setting the expectation and providing the paid time to check messages daily. For example, at Wheatsfield Cooperative in Ames, Iowa, workers clock into their shift by logging on to their computers. Immediately the home page of their intranet pops up. They see links to their department message board, sales reports, and other important information. They read notes posted by previous shifts and access other resources they need to do their jobs.
Co-ops with limited budgets needn’t despair. Satisfied employees also appreciate having quick, frequent department check-ins or huddles, disciplined meeting practices, engaging staff newsletters, easy access to upper management, and employee suggestion programs that receive timely responses. Staff members at Ozark Natural Foods in Fayetteville, Ark., reported satisfaction with communication increased dramatically after the co-op instituted "dailies," department meetings with agendas driven by staff members.
Clear expectations and consistent accountability
Employees whose survey responses indicated high satisfaction with their workplace reported having appropriately detailed job descriptions and specific performance goals. Clearly worded employment policies describe the conduct expected of staff, as well as the treatment staff can expect from the co-op. Effective employee training provides understanding of both how the co-op functions and how to do their jobs. Besides outlining manager responsibilities in job descriptions, the management team at Wheatsville Co-op in Austin, Tex., developed a "Manager’s Code of Conduct," stating mutually agreed-upon expectations.
Setting expectations, however, is just half the equation. Staff members are most satisfied when they receive feedback on their progress and then are rewarded for success. Furthermore, they want to see consequences for co-workers who slack off. Co-op employees are keenly sensitive to perceptions of fairness. They want a "just" workplace, which does not mean treating everyone the same regardless of contribution to the co-op. Managers are greatly aided in their jobs when they have well-thought-through disciplinary procedures and training on how to use them—particularly on how to have hard conversations with poor performers. Co-ops with the highest satisfaction levels, such as Seward Co-op in Minneapolis, have invested significant resources into training their managers to be good supervisors.
Opportunities for learning and growth
The employee demographic in co-ops tends to be young, educated, and eager to learn more. Starting with orientation and on-the-job training, co-op employees are happiest, we’ve found, when they feel well prepared to successfully perform their jobs. While promotion is the goal for some—and it’s important to maintain a fair, clear procedure for internal applicants to apply for open positions—the stimulation and confidence that employees gain from learning new things is the greater satisfier. In the high-scoring co-ops that aren’t about to open a second store, and where the department managers aren’t leaving, staff satisfaction is maintained by lively orientations, thorough on-the-job training, enrichment classes, and cross training in other departments.
Aware of this connection, Sacramento Natural Foods Co-op in California has a full-time trainer on staff. Their manager and staff development program includes coordinated vendor trainings, luncheons with local growers, and classes in their community learning center and cooking school. Seward Co-op sends not only managers but also assistant managers and team leads to external training seminars such as Rising Stars and NCGA’s Retail Basics. Many co-ops have developed passport training programs, including one on leadership recently created at Wheatsville.
In addition, co-op staffers appreciate guidance from their managers on how to grow in their jobs and move to the next level. Supervisors at high-scoring co-ops discuss development opportunities and identify needed resources in the annual evaluation.
Making a difference
Many people seek employment at co-ops to express their values. Some care about strengthening the local economy, others support organics and sustainable farming practices, and some want to live a healthier lifestyle. Through their principles, co-ops communicate the promise of a better business model that benefits multiple stakeholders rather than private owners or corporate shareholders. We’ve found that employees are happier when they can see how their work contributes to achieving co-op Ends, making a difference to their community and their world.
Community Mercantile in Lawrence, Kan., extends opportunities for community outreach to its staff through programs such as school gardens supported by its partner nonprofit CMEF. As Rita York Hennecke, general manager, describes it, "This past fall, my husband and I helped out on a Growing Food Growing Health workday. We weeded beds, mulched borders, and shoveled compost at a nearby grade school with other staff members. Opportunities like these help us feel more connected to the good we do in our community and remind us of the power of cooperation!"
Also, staff can make a payroll donation to Mercshare, a scholarship program for low-income folks to become co-op owners. Finally, the Merc offers a community service benefit where staff can get paid for up to eight hours annually to volunteer with a local nonprofit.
Norman Drummond, the famous motivational speaker, aptly stated, "Over 70 percent of people leave their jobs because of the way they are led." Co-op employees are no exception. We have found the statement, "Co-op management cares about employee needs and well-being," to be a bellwether for staff satisfaction. From survey results, we see that the following leader behaviors are interpreted by staff as "caring"—and in turn result in increased staff satisfaction:
- Being visible, e.g., walking through the store and greeting employees every day
- Doing what they say they will do by following through on promised tasks and projects
- Asking for staff opinions more often than stating their own
- Sharing credit for success and taking responsibility for failure, including admitting mistakes
- Talking to employees about the co-op Ends and how their work fits into accomplishing them
- Being open and approachable, listening honestly to staff concerns and then providing timely, respectful responses
- Providing tangible (adequate pay and benefits) and intangible (praise) recognition to staff for their contributions to co-op success
- Being fair and not playing favorites
- Explaining why the co-op takes actions, in terms of the co-op values
- Working as hard as everyone else and pitching in on the floor when necessary
Strong two-way communication, clear expectations and consistent accountability, continuous learning, solid leadership, and the sense of pride that results when staff feel like they make a difference—all go a long way towards positively engaging staff in their jobs and binding them to their co-ops. We’ve found that Open Book Management fosters these elements in the workplace. After Wheatsville Co-op started practicing Open Book, staff reported having more control over decisions that affect their work, seeing the impact of those decisions on co-op financial success and, most importantly, feeling like they were a more important part of the co-op team.
Ozark Natural Foods discovered another path to engaging employees: inject fun into the workplace. Jerry Huddleston, HR manager, explains, "We encourage staff to dress in costume on Halloween. We have a Store Decorating Committee that pays staff to design and create seasonal and promotional art for the store out of recycled materials. We joke around with each other a lot, and managers make sure we are the butt of lots of playful humor."
What about compensation?
What we conclude from our survey results is that a lack of money can cause unhappiness, but money in itself can’t buy happiness. While scores on pay-related questions on the surveys of the high-scoring co-ops ranged from 3.50 to 4.00, some of the lowest-scoring co-ops fell into that range, too. In other words, achieving relatively high scores on questions about pay rates does not necessarily correlate with high scores on questions about communication, training, accountability, engagement, or caring management.
You’ll notice that there’s no silver bullet in this list of key factors in staff satisfaction. The co-ops that score high on their employee surveys work across a broad front on all aspects of the employment relationship. And this process takes time. Earlier surveys indicated areas of dissatisfaction that management conscientiously addressed. For these co-ops, the payoff is huge—a happy staff that works together to achieve financial success and co-op Ends.