benefits or wages they’ll do better financially
than if they reward people? Yes. It certainly
makes a difference if everybody in the organization understands the importance.
It’s not essential, but it makes things much
EBN: You were writing this book at the
height of the economic meltdown. Did
workplace culture, benefits and incentives
help some of these companies weather the
Heymann: We visited the Great Little Box
Company during the deep part of this recession. We sat in on meetings where they had
open budgeting. The top finance people, the
top HR people, the CEO, all shared the status of the budget with the factory workers.
They engaged everybody in problem-solv-ing. They collectively came up with ways to
address budgetary gaps without losing jobs.
What they found was remarkable input because they had, over a long period of time,
been listening to employees.
Another very interesting story is Autoliv
Australia. They manufacture all the safety
equipment that goes into automobiles. The
automotive industry was particularly hard
hit by the recession.
Autoliv had a really remarkable history
of inventing great ways to provide flexibil-
ity to factory workers. They’d created ways
factory workers could take extra weeks of
vacation — without a cost to the company
— by having slightly lower pay per week but
then extending vacation time. If employees
wanted more pay, they could make up for it
by small amounts of overtime hours. This
was something employees had asked for and
that was greatly valued in the company. They
also had flexible starting hours, something
very rare in manufacturing.
EBN: What did you learn about employee
Heymann: Isola is a company in Nor way
that produces a range of products, including
metal and asphalt roof shingles, and steel
and PVC gutters. An example of what they
did in that respect is they went to a teamwork
approach to manufacturing, with greater de-
cision-making in the teams. Instead of hav-
ing a foreman and an underforeman and
many levels, they took a team approach.
A combination of the flexible policies that
are mandated in Norway and the teamwork
approach led to remarkable declines in ab-
senteeism over a three-year period. From
2002 to 2005, their absenteeism rate in the
summer declined by 28% and in the winter
it declined by 39%. That’s because people
cared about the company and felt the com-
pany cared about them. When they needed
leave, they could take it. And because of the
team approach, team members knew they
would all lose out if somebody was absent
when they didn’t need to be. The combina-
tion of providing the ability to take time off
when people needed it, and mutual incen-
tives not to take it off when you didn’t need
it, were very effective.
EBN: Did anything you discovered while
researching surprise you?
Heymann: It does jump out at you how
much better off companies can be and how
much better off working men and women
– who’ve traditionally had the least benefits
and the least compensation — can be.
At [garment manufacturer] American Apparel, for instance, putting a teamwork solution in place, along with incentives so that
workers could rely on a guaranteed minimum wage that was a decent wage but could
make much more with higher productivity,
was incredibly successful. Factory workers there increased their earnings by 50%
over a very short period of time, just several
months, at the same time as production in
the factory increased from 30,000 pieces a
day to 90,000 pieces. They achieved that with
only a 12% increase in the number of workers. These are enormous gains from having
the right incentives in place and facilitating
You can see the same thing at Costco
where, after four years, a cashier who might
only have a high school education is earn-
ing $43,000 a year, a very good wage. And
yet with the high wages and high career op-
portunities at Costco, they still end up earn-
ing more as a company per square foot than
Wal-Mart, whose reputation for poor wages
and few, if any, benefits is frequently raised.
Why? Because of such a vastly higher level of
productivity. That was striking.
EBN: What would you want employers to
learn from your research?
Heymann: The piece I would hope they
would take from it is that there is an immense amount of productivity gain that can
happen if you both motivate and learn lessons from the large number of production
workers at the bottom of the ladder, whether
that be in a call center or factory or in wholesale or retail. That to do that requires having
organizations that have ways to listen to and
seriously follow up on that input. It also requires setting up a system by which workers
at all levels of the firm will truly believe and
see they will benefit financially if the firm
does better. There are a lot of lessons from
these companies that will both help firms
make more money in these difficult times
but also feel good about how they’re making
that money. –A.D.