Why The ‘100 Best Companies’ To Work List Is Useless

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Anyone who enters one of the 77 high-end supermarkets owned by Wegmans Food Markets Inc.  throughout the Northeast or clicks on the website of the Rochester,  NY-based company quickly learns that it has been designated as one of the 100 Best Companies to Work For by Fortune magazine for more than a decade.   Many other companies, including search engine giant Google Inc. (NASDAQ: GOOG) and hip Internet retailer Zappos.com, are not shy about touting their rankings on the list either.   These  warm and fuzzy public relations moments, however, are based on sloppy research by list creator, the Great Place to Work Institute, that is tainted by financial relationships that violate the best practices of the polling industry.

For instance,  the Great Place to Work Institute is a consulting firm that does business with some of the companies on the list among others,  something not disclosed by Fortune. Among its former clients is Wegmans, which finds the list a useful recruiting tool when it enters new markets, says spokeswoman Jo Natale. Similar or worse conflicts exist in the dealings of Great Place overseas.

“We had been on the ‘100 Best Companies to Work For’ list for 10 years before we even considered working with Great Place to Work on a project,” she says.  “We never felt pressure to use their consulting services prior to that; we didn’t then, nor have we since.   And the one thing we know for certain is that the application process, including the survey results, have helped us to become an even better place to work …  and ultimately a better place to shop.”

The 100 Best Companies to Work For list has indeed morphed into an unofficial Good Housekeeping Seal of Approval for job-seekers and an opportunity for corporate America to pat itself on the back for treating its workers well in a tough economic environment.   While we have no reason to suspect that workers at Wegmans are not treated well, the company’s inclusion on the list doesn’t prove that is the case.  In fact, it doesn’t really prove anything.

24/7 Wall St. spent six weeks looking at Great Place and its practices both inside and outside the US. and found them to be lacking.
Unlike polls such as those done by Gallup, “Best Companies” is not scientific, not by a long shot.  Companies interested in being on the list must apply to the Institute, which despite its academic-sounding name is a for-profit institution.  To be eligible, companies must meet a list of criteria including having 1,000 or more U.S. employees and having been in operation for seven years.  The 100 “Best” are only the best of the 311 that applied, one large national polling firm which does not compete with Great Place, told 24/7 Wall St.  In addition, Fortune tells the winners 24 hours before the list is published while the Institute informs the losers at the same time.

“… our methodology for selecting the best is rigorous and considers the results of an employee survey and an extensive questionnaire,” the Institute says on its website.

The surveys, though, are done at the office where employees may feel intimidated about sharing their true feelings, an independent polling firm not involved in employee evaluations told us.  Firms interested in finding out if their employees are happy can also chose to be bench-marked against other firms in their field for a fee of $3,000 or  $12,000 depending on the level of complexity involved.

Theses fees are even higher overseas, and are pushed relatively hard in promotion material for the lists and the Great Place Institute.  The Great Place affiliate in Italy charges for packages that help companies improve employee satisfaction. In India, the package for application even has a long list of feedback and benchmark services. The promotion of the Australian list, which runs in the Fairfax Media BRW magazine, has a description of paid consulting service.  The overseas affiliates will eventually operate independently of the U.S. operation, according to the Institutute.