As we've observed every year that Winning Workplaces has sought out and honored small businesses that excel in exemplary people practices, a payoff of employee engagement is strong, year-over-year revenue growth relative to their peers – even (sometimes especially) in down economies.

So we're proud to list below the applicants to our 2010 Top Small Company Workplaces award that our media partner for this project, Inc. Magazine, recently recognized as among the fastest-growing, private, for-profit companies in its annual Inc. 500 List:

Congrats to these amazingly resilient, employee-friendly small businesses!

Click here to join our mailing list for news on our future workplace award programs.  You will start getting value immediately from our weekly, bottom line-improving people practice email (the next one goes out tomorrow).

Last week I enjoyed a week off with my family in Canada, specifically Nova Scotia and Prince Edward Island.  But before I had even left the states, I was reminded of an important lesson when it comes to hiring for fit as well as employee engagement and workplace team building.

My wife and I flew from LAX to Newark Liberty International Airport before connecting on a flight from there to Halifax.  Between our arrival and second departure gate was a small, '50s-style diner.  Not having much time and knowing there'd be at least a snack on our second-leg flight, we sat down there to split a plate of fries.  We wanted to keep ourselves hydrated, so we each opted for free glasses of water instead of sodas (you'll see why this is important in a second).

When we arrived the place was maybe a third full – not too busy for the one waiter to serve us, as I can say with authority from my high school days as a waiter.  Yet it was immediately apparent that he preferred to favor tables with more people who were ordering more items.  That's understandable because, in theory, that's where the bigger tips were.

What he shouldn't have assumed, though, is that we would leave a proportionally smaller tip.  It so happened that we had bills and no change so, proportionally, had he done an even passable job, he would have gotten a very nice tip for his time involved.  But he initially ignored us, literally rolled his eyes when we asked for a plate of fries and two waters, didn't check on us once he delivered our order, and, worst of all when it comes to waiting etiquette, took our check and tip before we had left!

On our way out, when my wife shared that his tip could have been a lot higher if he had treated us better, the waiter said lazily, "Well, you only ordered fries."  Since when does amount spent dictate the service level received!?  (This is an equation that doesn't factor into the business models of our Top Small Company Workplaces, BTW.)

If you run a company, especially in the hospitality industry, you might be thinking that this experience reflects more on the individual employee and doesn't impact the business as much.  Not necessarily; on our return visit to the same airport en route from Halifax to Los Angeles, we noticed the same waiter in the same restaurant – steering clear of both and getting our food on elsewhere in the terminal.  A different customer-employee experience could have meant repeat business for that diner.

The takeaway?  When you have a more or less stable, captive audience such as in an airport or mall, people practices including hiring for fit and using employee development strategies to deliver excellent service can make a huge difference on your bottom line.

Related: In this webinar recording on our website, two of our award-winning small business CEOs share proven tips for creating a fantastic customer service culture.

Photo credit: Maurice Prather

SmartBrief on Leadership was one of the sources I noticed that touched upon what appears to be a relatively new employee engagement approach: allowing workers to take unlimited paid vacations.  Recently they linked to this NPR article on the trend.

But then last week they raised the topic again; linking to this article by Chris Grams, SmartBrief wrote:

An increasing number of companies are taking a relaxed approach to worker management, letting staff decide for themselves when they take vacations and how they spend their time at work.

The emphasis on the word "relaxed" above is mine.  It's only one word, but in my opinion in terms of leaders taking something away from their summary, it's an important one.  "Relaxed" can imply "quick and easy."  In fact, getting your workplace culture and productivity to a place in which your organization can truly succeed with a "no policy" vacation policy requires a lot of time and, especially, buy in and long-term commitment from leadership.

I think of the pinnacle of an unlimited vacation policy as the visible part of an iceberg – there's a whole lot more going on under the surface than what's apparent:

What's your take on this trend, and on the team building progress and other people practices work that needs to happen before it's feasible to jump on it?

My thanks to one of the bloggers I follow, Aaron Juckett of The One-Stop ESOP Blog, for pointing me to a new study by Hewitt Associates which uncovers some of the most conclusive evidence I've seen that poor employee engagement leads to an undesirable outcome for the top-priority stakeholder for many companies: shareholders.

As Hewitt explains on their website, since the onset of the economic downturn in July 2008, they have analyzed changes in employee engagement levels by quarter for more than 900 global organizations.  Juckett points to their most recent findings published last month, which show that

Organizations where 65% or more of employees are engaged had total shareholder returns 19% higher than the average total shareholder returns.  Companies with less than 40% of employees engaged had total shareholder returns that were 44% lower than the average.

I find this to be incredibly powerful, especially when I look back to a 2007 study by another leading workplace trends research firm, Towers Perrin (now Towers Watson after merging with Watson Wyatt in January), which we've summarized on our website.  That year-long study of 50 companies found that those with the most engaged employees had a 28% increase in earnings per share, while those with the least engaged workers had an 11% decline in earnings per share.

When we put the results of these two studies back to back, the payoff of employee engagement and team building on shareholders and other investors could not be clearer:

Likely due in part to layoffs and other workforce cuts made after 2007, shareholder returns for companies with the highest engagement – while still above the average – did drop 147%.  But look at the whopping drop of 400% in returns among companies with the least engaged employees.  Ouch, or as my Norwegian ancestors might say, Oofta!

These findings serve to advance the case that it's in companies' best interest to take up, or improve upon, their long-term strategy to motivate employees to create a more harmonious and productive workplace.

Related: Among the best practice articles that those who share their bad workplace experiences with us receive as part of our free, 20-page white paper is one on employee practices that increase competitive advantage.  Get the white paper by sharing your bad experience (and solution) here.

The following is a guest post by Sean Conrad.  Sean is a Senior Product Analyst at Halogen Software, one of the leading providers of performance appraisal software.

Most of us are familiar with Gallup's employee engagement research and the twelve statements they use to measure it.

When I look at the list, it strikes me that there are some basic employee performance management practices that, if done well, address most of these needs.  They include:

• Giving employees meaningful feedback on a regular basis.
• Being clear about goals and helping employees see how their work matters to the organization.
• Recognizing and rewarding employees fairly.
• Giving employees opportunities for growth and development.

Given their importance and impact, we'd do well as managers to give them our time and attention.

Give Employees Meaningful Feedback on an Ongoing Basis

Research consistently tells that employees want meaningful, ongoing feedback.  But many of us struggle to make it part of our work culture.  Here are some things that can help:

Increase the frequency of your performance appraisals
Instead of just doing annual performance appraisals, conduct quarterly mini reviews.  This helps to give managers and employees a regularly committed interval for dialogue and feedback.
 
Gather feedback from others
Feedback from multiple sources is broader and more objective, and helps the manager and employee get a more accurate view of their performance.  You can keep it simple, and just request feedback from another employee or manager who works with the employee, or conduct more formal 360 degree assessments.

Keep ongoing notes on performance
Keeping and sharing notes on performance year-round helps to better document performance, opens up the dialogue between a manager and an employee, and makes writing performance appraisal faster and easier.  Highlights, challenges and disconnects that might not otherwise be discovered until the annual performance appraisal meeting can be shared and explored in a timely way.
 
Define Clear Goals and Link Them to Organizational Goals

Employees need to clearly know what is expected of them, and understand how their work contributes to the organization's mission and success.

SMART goals are broadly recognized as the most effective way to write clear goals.  Specific, measurable, achievable, realistic and time-bound goals let employees know what is expected of them, how success will be measured, and when they must complete work.

But we should also give employees a context for their work by linking their goals to higher-level organizational goals, so they understand how they're contributing to organizational goals.

Recognize and Reward Your Employees Fairly and Consistently

Recognition and rewards should be frequent and come in many forms.  Since we're all motivated by different things, it's important to know what your employees value, so you can reward them effectively.  But all programs should be tied to employee performance. And your employees should know the metrics used as measurement.

Provide Opportunities for Growth and Development

Employees need to feel as though they have a future with an organization, and a career path that helps them further develop their knowledge, skills and abilities.  Make sure you provide things like formal training, challenging work assignments, mentoring programs, etc.

Related: For more guidance on creating an effective performance management system as part of a winning set of team building and employee development strategies, check out our Ask An Expert column on measuring key competencies.

I had a "wow" moment yesterday when I was reviewing my post history in our Compendium software and realized today's post will be our 900th.  900 blog posts in roughly 800 days (our blog has been running since June 4, 2008) – that works out to about one new post per day on employee engagement and team building strategies to help small businesses create a more productive workplace.

In addition to the writing I do here to (hopefully) make your work life easier, I also follow over 100 blogs in Google Reader, choosing some of the best stuff from them to share here as well as on Twitter.  In all this time I've picked up on some important best practices when writing business blog posts – along with some things to avoid.

I want to focus today's post on the latter to help you draw in and better engage your readers, and – addressing what CEOs and others who hold the purse strings care about – get them to take a desired action that meets your goals or helps your bottom line.

Here's my top 5 list of things to NOT do when business blogging:

1. Truncate your RSS feed.  In layman's terms, this means setting up each new post so the reader only sees a bit of teaser text in their RSS feed (explained here if you don't know what this is), and must click through to your blog to read the full article.  I'm on the same page as Techdirt CEO Mike Masnick as to why this is a bad business decision.  I'm sorry, but I look at this the same way I do a pay wall: you're putting a barrier in front of me, and my gut reaction is to leave.
2. A "link dump" or "flashback" to an earlier week or month of posts.  I've seen a growing number of blogs do this, and although I do get why they do so (more targeted, quality links help with search engine optimization), it's really a disservice to the reader.  A link dump says to me, "I've found this collection of articles, but I don't care enough about your time to put any kind of analysis or framework around them...and I'm sure you have an hour to kill reading all my links until you get to the last one."  A flashback is even worse; usually it's a linked list of dates corresponding to posts – that tells me nothing about what I can expect to read by clicking through.  You have to ask yourself if even your most engaged readers will go with you on your stroll down memory lane.  I guarantee a huge percentage of them will not.
3. Use too much "inside" language.  There's a prominent blog I follow, which I won't name, where lately almost all of the posts are about the author's spouse – who is not relevant to the title (read: promise) of the blog.  This author has written some greater material over the years, but lately I've been tempted to hit "Delete" next to that blog for this reason.  The lesson?  Keep your first-time readers in mind and don't veer too far off course from the promise to your readers stated or implied in your blog title.  (Or, do it but then change your blog title/focus.)
4. Write too many posts per day.  Speaking of moves that are great for SEO but bad for the average RSS follower, don't publish so many posts per day that it becomes burdensome for your average reader to keep up.  How many posts/day are too many?  My number is five.  Tip: Survey your readers to learn the max that they're comfortable with, and don't go over it.  (Side note: A number of the blogs I've seen that publish what I consider to be way too many posts/day accomplish this volume by enlisting guest writers.  If your goal is build relationships with these folks and to get great SEO at the expense of the average reader's time, then by all means keep doing what you're doing.)
5. Write posts that are too long.  Frankly, this was not a concern of mine when I started writing here.  But the more I've written with the reader's time in mind, and seen this come up again and again as a blogging best practice, I've tried not to do this.  Right now, in my mind, this post is getting to be too long, and I'm at 734 words.  That's about 100 words shy of the average, feature-length article on getting employees engaged in our quarterly newsletter.  Too long for everyday consumption, so this list is ending...now.

What's on your list of pet peeves or things to avoid when blogging for business results?

Image credit: oz 2 designs

What an amazing community of small business leaders Winning Workplaces is fortunate to know!  After I wrote this post last week providing resources to help leaders set their new managers up for success – in which I shared a facet of our honoree Andrew Field's approach to this – the President of PrintingForLess.com emailed me with expanded tactics intended to help you with your own employee leadership development of this pivotal group of workers.

According to Field, here are some things that PFL implemented to grow great first-time managers in a relatively short time:

The critical first step in cultivating new managers is to identify candidates before they are needed in their new positions, and to begin giving them the preparation they need well in advance.  It is critical to have an explicit "leadership pipeline" and to hold yourself and your management team accountable for the development of your future leaders.

At PFL, this looks like having a standing agenda item at our broad monthly management team meeting that involves each person who has direct reports identifying their top and bottom performers, along with what they are doing to grow/reward/engage their top people, and what they are doing to "coach up" their low performers.

The second tool for success that we equip our new managers with is a template for regular (weekly or biweekly) one-on-one conversations with each of their direct reports.  The critical elements are personal connections, specific project updates, and discussion about professional growth plans.

Many entrepreneurs say that they don't need regular, scheduled one-on-ones because they have so much impromptu contact with their teams.  Nice try.

Spur-of-the-moment discussions are important, but they are not a substitute for regular one-on-ones, which encompass deep discussions focused mostly around the employee's work and development plans, rather than just current action items.

Our third support system for new leaders is that we provide them with development paths that include opportunities to expand their experience levels within the company.  In addition to education and mentorship (both of which are structured), we give future and current leaders the opportunity to test themselves in leadership roles, ranging from running a small project to leading a large group of people.  We move them around to different areas of the company in order to broaden their knowledge base, as well as giving them a chance to build robust networks within the organization.  Critical to the success of this OJT ("On the Job Training") is that we structure discussions about learnings and challenges.  We have found that peer-to-peer discussions are every bit as productive as boss-to-employee interactions.

At the end of the day, PFL has grown our best people by identifying potential leaders, modeling good leadership habits, and showering them with resources aimed at nurturing their growth.

Related: Andrew Field clearly knows his stuff when it comes to team building in the workplace – and seeing a payoff of employee engagement.  Learn even more about his employee development strategies on our website.

This new post on the Business Pundit blog caught my attention: Citing data from Wall St. Cheat Sheet, it contains a map of the U.S. showing the scope of business closures in FY 2009.  The number of closures are given for states suffering from the highest number of them, including New York, California, Texas, Georgia, and Florida.

This is across-the-board data, representing all businesses, large and small.  But what about just small businesses?  And more specifically, as a point of discussion relative to the findings from Wall St. Cheat Sheet, how many of them are expanding or planning to expand in this environment?

Our employee engagement research from our 2010 Top Small Company Workplaces award sheds some light here.  We asked our 497 applicant firms about their future organizational goals; 101 of them, or 20.3%, used terms describing expansion in the immediate future including "new location," "new office," and "new facility."

I thought it would be illuminating to juxtapose the map of U.S. business closures from Wall St. Cheat Sheet with a map I created showing the breakdown of our 101 small business award applicants expanding or looking to expand soon:

Click on our map in blue to view a larger version.

Besides company size – our applicants have no more than 750 employees – what else is different in the survey samples comprising these two maps?  We know that our award applicants understand the payoff of employee engagement and team building on their bottom line, and accordingly develop people practices to leverage this.  This enhances their ability to invest in the business, including expansion – even in a tough economy.

Can we say that about the much larger company sample in Wall St. Cheat Sheet's research?  Not necessarily.

What's your reaction to these two maps?

You have probably heard of these employee engagement themed stories by now: Both former JetBlue flight attendant Steven Slater and a woman named Jenny are being called workplace heroes on the Internet for the spectacular ways they departed their employers in the face of on-the-job adversity.

They both tapped into the frustration felt by at least 55% of the workforce who are unsatisfied with their current jobs, many of whom no doubt fantasize about doing exactly what these two ex-employees did.  (However, hat tip to executive coach Scott Eblin for noticing that the experience of "Jenny" turned out to be a hoax.)

Yet, there's a lesson in these two stories for employers, as Lauren Moak at the Delaware Employment Law Blog – one of my recommended small business/entrepreneurship blogs – explains fabulously:

While these stories are endlessly entertaining to the on-line community, no employer wants to be on the receiving end of this type of publicity.  So treat your employees well, and minimize the incentive for them to quit with a flourish.

So, how best to use team building to keep employees engaged to avoid one or more high-profile exits?  Here's a selected list of our webinars – featuring CEOs of small businesses that excel at this – to point you in the right direction:

• Engaging Fresh, Young Talent in the Workplace
• Wired to Care: How Companies Prosper When They Create Widespread Empathy
• Fostering Trust Within the Workplace
• Growing Leaders from Within

On her blog last week, Harvard Business School's Rosabeth Moss Kanter identified setting clear expectations about everything as one of four things groups want that leaders can't provide.  She writes,

No matter how much leaders try to define expectations, lay out the nature of likely events, or describe the steps that the group will be going through, it's not enough.

My question is, while it may not be enough to fully satisfy groups of employees for ideal workforce effectiveness – is it enough to move the business forward in a meaningful way (even if that means not sliding backward in a recession)?

The workplace team building and employee engagement experiences of 8 small businesses that applied for our Top Small Company Workplaces award this year – including 2 winners – show that building clear employee expectations from leaders into the strategy contributes to organizational success.  Consider that the companies I'll tell you a bit more about below:

• Have been in business an average of 13 years,
• Grew revenue more than $5 million on average from 2008 to 2009,
• Went from 50% being profitable in 2008 to 75% being profitable in 2009, and
• Decreased average turnover by close to 3% from 2008 to 2009.

Specifically, here's who the firms are and how they maintain their success, in part, by being intentional about setting clear expectations:

Awarepoint - Real-time awareness technologies to monitor equipment and people - San Diego, CA
"Awarepoint helps managers get the best out of our staff.  The in-depth performance review helps managers and employees have better conversations, set clear expectations and build useful development plans.  This method also helps our leaders learn to identify poor performance so that it can be dealt with quickly, while developing the solid performers and building the business."

Enhanced Recovery Corporation - Financial Services - Jacksonville, FL
"The Owners, VPs, Directors, Department Heads, and Operations Management Team are all committed to the continued success of all ERC employees.  From Peer to Peer feedback to our Open Door Policy, employees of ERC always have clear expectations and development opportunities.  All departments at ERC are committed to ensuring constant development of employees at all levels within the organization."

FMYI - Software - Portland, OR
"We have done a lot more than what's expected of a small company such as providing medical benefits from day one with only a couple of employees even though it wasn't required by Oregon law.  We also want to be more authentic and fully integrated with our sustainability commitment.  We will sustain employee culture through ongoing sustainability discussions (via Northwest Earth Institute courses), clear expectations written into job descriptions and reviews about our doer/helper culture."

NouvEON - Consulting - Charlotte, NC
"NouvEON's Talent Management and People Care Division has several platforms that allow us to set goals, dialogue throughout the year, establish clear expectations, and perform 360 reviews, as well as measure and track potential.  We map Performance AND Potential and communicate to our employees where we see strengths and gaps.  It is through open communication and candid conversation that we help individuals grow in their jobs."

NY Jets (Winner) - Professional football team - Florham Park, NJ
"When our current management development initiative started, the Jets were in the planning stages of our relocation from Long Island to NJ.  HR was able to add in a special section on managing change that prepared mangers for the huge changes employees faced with our relocation.  The training sessions consisted of 6 modules: The Role of the Manager, Setting Clear Expectations, Feedback Skills, Delegation and Motivation, Handling Performance Issues, and Managing Change. The initiative proved to be highly successful for all managers; the learnings from the trainings are still used by the managers today."

Portico Systems Inc. - Software - Blue Bell, PA
"People succeed when they care share their ideas, build their skills, collaborate with others, and move into the realm of confidence that comes with mastery.  The masters become mentors and guide others with wisdom and a desire to enable others with positive reinforcement.  This is the environment that Portico is cultivating as we grow the organization and the people who are working to succeed.  Employees are provided with clear expectations, direction and feedback from supervisors, and opportunities and monetary and non-monetary ways incentives to succeed."

Red Door Interactive (Winner) - Advertising - San Diego, CA
"Our culture has been one of open dialogue, learning and progression since the company was formed eight years ago.  The family and team oriented environment at Red Door Interactive fosters open communication, leadership, clear expectations and teamwork.  A visit to Red Door Interactive will clearly display the open environment since the office is completely devoid of doors; even the CEO. Internal committees encourage feedback and collaboration to maintain our culture and engagement."

Sierra w/o Wires - Computer systems and related services - Pittsburgh, PA
"Regular and real communication is essential to establishing any corporate culture, community and collaboration.  In our organization this type of communication ranges involving employees in the project planning and estimating, to regular team and one-on-one update meetings, and also establishing clear expectations for each employee on what needs to be done, when."

How clear are the expectations in your organization?  Do your people practices help or hinder this?

Longtime readers will recall that I wrote the following in June:

Trust building activities may register high on the radar screens of the organizations Winning Workplaces [has honored], but on the whole among the roughly 27 million small businesses across the U.S., they do not.  These and other human capital strategies are considered by many leaders to be "soft," and therefore, in a down economy, not worth leadership's time and energy compared with other areas of the business.

Maybe the results of Deloitte's latest Ethics & Workplace Survey will change some minds regarding the ROI of building trust in the workplace.  Surveying more than 700 employed Americans in April, Deloitte found that close to half have lost trust in their employer since the start of the recession; this has propelled more than a third of respondents to look for a new job as the economy picks up.

Certainly, some leaders are hip to and worried about these trends; those who run our Top Small Company Workplaces are among them.  As Management-Issues notes today, the same survey from Deloitte found that

Two-thirds of Fortune 1000 executives who are concerned employees will be job hunting in the coming months acknowledge that trust will be a factor in any increase in voluntary turnover....

The results of this survey make me wonder how much lower the percentage of employees looking to bolt would be if more companies had tried to share the pain in the midst of the worst of this recession, instead of pulling the layoff trigger first.  I also wonder – and maybe future studies will put some quantifiable data behind this – how much more revenue small and other businesses that did not view worker trust as a priority during the apex of the crisis might have right now.  The answer to this question has larger implications, including on our current GDP level and jobless rate.

Related: In April I profiled six small businesses in our network that turned to employee furloughs and pay cuts instead of layoffs to weather tough times, and came out stronger for their decision.  Read their stories here.

Winning Workplaces is pleased to announce a new, free benefit for our email subscribers, on top of the ones they already enjoy such as our quarterly IDEAS newsletter, workplace topic surveys, and event and network news.

Last week we started sending out an update we're calling "Your Weekly Bottom Line-Improving People Practice."  The concept is simple: Based on qualitative feedback we've collected from our Top Small Company Workplaces award applications, we choose and send you real world company practices and the subsequent results they've seen that best demonstrate the payoff of employee engagement and team building.

To show you what I mean, here's this week's practice that went out to our subscribers earlier today:

• The Leadership and Learning Center
• Founded 1994
• Salem, Massachusetts
• Consulting

Practice/Result:

"Our employees design our people practices – everything from our benefit structure (employee committees create them) and benefit evaluation (twice annual surveys).  That is why turnover, which had been 30-40% in the late 1990s, has been in low single digits for the past several years."

If you'd like to start getting practice/result updates like this each week to help improve your business, click here.  It's free and you can opt out at any time.

When the six building blocks of a Winning Workplace are in place and supported by a company's leadership, the results are magical.  I spelled out some of these results in this post, and even more are summarized from leading research studies here on our website.

These results are possible when a workplace culture is not based on fear.  Scott Eblin has a new post on his Next Level Blog for executives that describes, in almost scary detail, seven factors that can come together to create a "perfect storm" of fear that can cripple the camaraderie and productivity in your organization.

Of course, Eblin's post is an exercise in what to avoid when you work to better engage employees and execute effective team building strategies.  For the opposite perspective – tips to get and keep fear out of your workplace – see this Ask An Expert column on our website.

How have you worked to keep fear from becoming a cancer in your business?

I don't yet have it in my hands, but I already know I'm going to like the latest book from workplace generational expert Neil Howe, Millennials in the Workplace.

According to StreetInsider.com, Howe "turns [the] downbeat message [from the media on Millennials, aka Generation Y] on its head."  Taking the position that Millennials are an asset and opportunity rather than a lazy (insert other adjectives here) liability, the website writes, Howe's new book serves in part as a resource for employee engagement and team building strategies to find and keep them.

Providing a sample of the employee retention tips Howe shares in Millennials, StreetInsider.com links to this pdf from Howe's company, LifeCourse.  At its core is the following list of recruiting and retention strategies tailored to this young generation that, some reports say, became the most pervasive one of all this year: 

1. Treat them like VIPs
2. Co-recuit the parents
3. Find them early
4. Look after them
5. Offer structure and teach them the basics
6. Provide tight cycles of feedback
7. Don't offer a "McJob"
8. Make them part of the group
9. Be active in the community
10. Take an interest in their success

I really like that the pdf includes a section on "What To Do" under each of the above strategies to take them from the world of the ambiguous to the practical.

Given the Millennial workforce's size and its stature as the dominant generation in the work world for years to come, it's no surprise that our Top Small Company Workplaces are already using many of the above strategies to help them tackle pressing issues from process and supply chain improvement to sales lead cultivation and delivery.

Related: Read my 4 reasons why Millennials may be the ones to pull us out of our troubled economy.

Last July, when Amazon.com was on the verge of acquiring Zappos.com, I questioned if the move would lead to the demise of the unique – and uniquely powerful in terms of buzz and sales – productive workplace culture Tony Hsieh built within his retail business.

A year later, I'm happy to note that just the opposite seems to be true.  Hsieh has remained in place as CEO and, more importantly from an employee engagement perspective, he's become even more visible as a "chief culture officer": I was one of many bloggers and reporters to pick up on his New York Times Q&A in January in which he shared the benefits of attracting and retaining offbeat workers.  Last month, Hsieh went even further in sharing his workplace culture beliefs, practices, and successes with the release of his book Delivering Happiness.

Through it all, Zappos continues to wow customers with its incredible service, helping to maintain sales in a tough economy.  What's more, the company serves as a beacon of hope to job seekers and a vital source of tax revenues in hard hit Las Vegas.

Honest Tea, a finalist for our 2010 Top Small Company Workplaces award, appears to be following in Zappos' footsteps.

After seeing this post last week on the Triple Pundit blog, which spells out the dilemma for the 12-year-old, Maryland-based organic tea bottler – staying true to its "no high-fructose corn syrup" label, and thus its customer base, with a Coca-Cola minority stake that's set to become more significant next year – I decided to dig into Honest Tea's application for our award for clues to their next moves.

Here's how they answered our question on their key long-term strategic goals for the organization and the workplace (my emphasis is in bold):

A critical strategic goal is to maintain our mission-driven, entrepreneurial culture as we grow alongside the world's largest beverage company, and to mentor other mission-driven companies.  We will continue our tradition of including all employees on crew drives, a vital way of instilling the Honest Tea culture.  Rapid expansion in 2010 will demand participation from everyone in the company.  Crew drives enable employees from every department to experience selling and marketing our beverages and directly invests them in our business fundamentals.  Another key goal is to maintain and build our position as a leading, innovative organic beverage company.  In 2010 we introduce Honest Kombucha, a unique, sparkling tea beverage based on live, organic cultures.  Even as we grow nationally, we are determined to sustain our role as a leader in the local community.  Honest Tea is a founding sponsor of a local environmental non-profit, Bethesda Green, supporting a healthy economy and sustainable living.  The company's visibility in the community is a source of pride for our employees and a key part of our identity.  Finally, the company's commitment to transparency, the accessibility of our President and TeaEO and the rest of the management team, are important ways in which Honest Tea will continue to be steeped in its entrepreneurial, mission-driven culture.

Like Zappos, Honest Tea is placing a premium on maintaining its human capital strategies and core values that have contributed to its massive success while it negotiates with a much larger company that has a sizable interest in it.

Related: For more on how Honest Tea's employee development strategies led it to become an industry leader, read our award profile on the firm.

In a recent post on The Wall Street Journal's The Juggle blog, Jennifer Merritt asked if Summer Fridays still exist.  The "still" part of her question is informed by the realities of the economy forcing companies to cut benefits such as a part or full workday off, and companies that are tight on staff (again because of the economy) needing all the time they can get to best serve the customer or client.

In response to Merritt's question, Summer Fridays do, in fact, still exist.  Among the nearly 500 applicants for our 2010 Top Small Company Workplaces award, 8 specifically referred to reduced hours or a full day off on Fridays during the summer in their applications:

1. The Leadership and Learning Center - consulting firm in Salem, MA
2. Sonoma Partners - software firm in Chicago, IL
3. McGraw Wentworth* - insurance benefits provider in Troy, MI
4. Family Heritage Life Insurance Company - financial services firm in Cleveland, OH
5. NogginLabs Inc - software firm in Chicago, IL
6. Maxons Restorations, Inc. - property damage restoration services provider in New York, NY
7. Rauxa Direct - advertising firm in Costa Mesa, CA
8. Affect Strategies - PR/marketing firm in New York, NY

*This company is a 2010 award finalist

In addition, a review of our 2010 applicants shows that many of them offer the following activities for employee engagement and team building on Fridays (in all seasons):

1. Happy hour
2. Healthy breakfast items – most commonly fruits and bagels
3. Staff lunch
4. Casual dress
5. Yoga
6. Massages
7. Fun run
8. "Praise Box" – measure to reward hard work with awards and prizes
9. Staff outings during sport seasons – most commonly football
10. Friday night movies

Think these Friday-themed people practices are just a waste of money?  Consider that another 2010 applicant, B2B sales training services firm Vorsight in Arlington, VA, told us that, "When we put in place our Friday company lunch and one on one coaching, top line revenue jumped 20%."

What other Friday practices do you do, or have you heard about?

I enjoyed this post by Susan Fronk on the America's Best Business Practices blog.  In it she argues that the one thing that can most positively impact your small business – over and above measures to grow revenue, cut costs, and deliver excellent customer service – is finding and keeping great employees.

She provides more value later in her article by sharing three ways small businesses can build a more productive workplace culture by attracting and retaining great employees:

• Do a good job of recruiting and hiring,
• Create a great working environment, and
• Build relationships with your employees and foster relationships among employees.

I thought I would expand upon Fronk's informative post by sharing with you some specific ways that Winning Workplaces' 2010 Top Small Company Workplace award winners find and keep great employees:

1. Hire slow.  It's not uncommon for job candidates to go through as many as 8 interviews before a hiring decision is made.
2. Hire for cultural fit.  This includes not just when a position is open, but generally when someone looks like a good fit for the organization; a number of firms prefer to keep their feelers out and plug someone in when they come across that person.
3. Grab top talent from competing firms.  Top talent is top talent, and our winning small companies are unabashed about leveraging a bad economy that has forced competing firms to shed staff to their advantage.
4. Systematize the orientation/onboarding process.  Many companies do a good job during the middle period of an employee's tenure, but few are exceptional at the beginning, a critical time for new hires.  Our Top Small Company Workplaces really excel here by doing things like mentoring and scheduling meetings with the CEO to ramp up the new employee's understanding of and commitment to the organization.
5. Managers have frequent contact with their subordinates.  For many small companies, managers only interact one on one with employees, to review performance and also their top concerns/hurdles, every three months.  Our award-winning firms typically do this every two weeks to a month.  This helps better engage employees for greater commitment, and also helps firms react to emerging issues sooner.
6. Invest in employee leadership development.  The Top Small Company Workplaces share a belief that they are best served when their top talent stays to fill and create roles of increasing responsibility, and they have seen results from their action on it including process improvement, product innovation, and better customer service – not to mention mid- and top-level employees who stay longer, keeping recruiting and training costs down.  As far as their specific leadership development strategies, see this post.
7. Give employees a voice in the decision making.  Lots of companies have an open door policy, but this no longer cuts it if you want to foster two-way communication that results in greater employee engagement and productivity.  Our award winners give their employees a voice by holding daily huddles and frequent (at least once a month) all-hands meetings.  In addition, many of them open up their books and explain the company finances so people gain a crystal clear understanding of how their role affects the top and bottom line.
8. Do employee recognition.  I've blogged before about how recognizing your staff can be meaningful and still inexpensive.  Often times a simple, face-to-face thank you or small gift personalized to the employee can make a powerful impact.
9. Be generous in providing time off.  More employers need to come to the realization that being flexible around employees' personal and family obligations makes for a more committed and productive worker.  Paid time off should be a primary consideration, but if that's not in the budget, being flexible – especially for unanticipated obligations – through measures like cross training will help immensely with retention.
10. Empower workers down to the lowest levels to make good spot decisions.  This involves a lot of trust from leaders and some additional training, but when it works it makes a dramatic impact on business results.  Just think how much happier you've been when you've called a vendor and you didn't need to be transferred up the phone/responsibility chain to have your issue resolved.  The same sense of satisfaction can mean the difference in whether your customers or clients come back to you and refer you to others.

Is there a measure you think should be in this list?  If so, I welcome your comment on it below.

Today I shared with our Twitter followers a how-to series of posts the Young Entrepreneur blog is running on starting a business.  One of these posts I found interesting is Adam Toren's piece on choosing a business legal/tax structure.  He helps budding entrepreneurs greatly by rating the pros and cons of structures including Sole Proprietorship, Joint Venture, Limited Partnership, Limited Liability Company, and C and S Corporations.

Reading Toren's post inspired me to take a look at the data Winning Workplaces has on the small business applicants for our 2010 Top Small Company Workplaces award, in terms of revenue and profitability for the legal/tax structures we looked at under our criteria of evaluating privately held and not-for-profit organizations.  The legal/tax structures of the firms we assessed included:

• C Corporation (roughly 3/10 firms)
• S Corporation (roughly 5/10 firms)
• Partnership/Proprietorship (roughly 2/10 firms)

Here's how they break down by structure for both average 2009 revenue and percentage that were profitable in 2009:

*Assumes the firm has been in business at least 3 years

The key takeaway is that while C Corps edged out the other two structures in revenue, a greater share of Partnership/Proprietorships are profitable.

You may be asking, What makes this survey sample a good one to use these metrics for benchmarking purposes?  Well, beyond the size of the sample (497 organizations) and the fact that they have all crossed the Dun & Bradstreet threshold of surviving after the first three years, most of these enterprises understand the payoff of employee engagement and team building strategies on the bottom line.  So they post better revenue and profitability numbers to shoot for than a survey sample in which employees are more likely to be actively disengaged.

What's your take on the above?  How do you see strong people practices factoring into the equation?

Did you know that in late October, Denver will be a mecca for workplace team building and employee engagement practices that improve both business results and job satisfaction? 

It's true – that's when Winning Workplaces will join with our Top Small Company Workplaces award media partner, Inc. Magazine, to host Creating Competitive Cultures (C3): New Leadership Strategies for Building Great Companies.  The event will be held Oct. 27-29 at the Denver Marriott City Center.

If you're looking for reasons to save the date, you need look no further than at the current speaker roster.  It includes some impressive entrepreneurs, including several from companies we have honored with our workplace award over the past 8 years:

1. Jill Blashack Strahan, CEO of Tastefully Simple
2. Mike Faith, founder of Headsets.com
3. Kenneth Feld, CEO of Feld Entertainment (Ringling Bros. and Barnum & Bailey)
4. Donna Fenn, Inc. contributing editor and author of Upstarts
5. Leigh Buchanan, Inc. editor-at-large
6. Bo Burlingham, Inc. editor-at-large
7. Norm Brodsky, Inc. columnist and founder of CitiStorage
8. Ted Freeman, principal at Praxis Consulting Group
9. Jeffrey A. Hollender, Chief Inspired Protagonist, co-founder, and Executive Chairperson of Seventh Generation
10. Bart Houlahan, founder of B Lab
11. Selina Lo, founder of Ruckus Wireless
12. Paul Silvis, founder of Restek
13. Larry O'Toole, founder of Gentle Giant
14. Bob Rosner, author of The Boss's Survival Guide
15. Paul Spiegelman, founder of Beryl
16. Gail Sussman Miller
17. Tom Walter, CEO of Tasty Catering
18. Steve Voigt, President and CEO of King Arthur Flour

To learn more about this event or to register, visit the C3 website.  Through August 31, you can save $300 by registering at the early bird rate.

If you have 90 minutes to spare, I have something that's a great use of your time when it comes to expanding your understanding of the payoff of employee engagement and workplace team building activities.

Below is a video of our President's presentation last month at an Entrepreneurial Roundtable hosted by the University of Chicago Booth School of Business.

If you can't see the video in your RSS reader, click here.

The presentation kicks off with our own Gaye van den Hombergh explaining why companies should care about creating great workplaces (starting at 7:30) and the qualities we see as critical to Winning Workplaces, along with some of the people practices used by winners of our 2010 Top Small Company Workplaces award, which were featured in the June issue of Inc. Magazine (starting at 29:00).

Starting at 44:00, Gaye led a panel featuring leaders of this year's two Chicago area winners: Marvin Klein, Founder, PortionPac Chemical Corporation; and Tom Walter, President & CEO and Tasty Catering.  As you absorb the lessons learned and insights of these two leaders, consider their workplace culture practices, which I've listed below respectively, that have led them to success – even in this tough economy:

PortionPac

Selected workplace best practices:

• Offers personal and financial support for employees on a case by case basis
• "Front to Back Day"
• Offers experience to improve personal confidence and communication skills
• Employees have a high degree of autonomy

Business results:

• 2009 revenue up 7% from 2008
• Over the same period their competitors suffered double digit losses

Tasty Catering

Selected workplace best practices:

• Personal financial crisis fund fed into by employees
• Healthy free meals provided to staff on a daily basis
• If an employee comes up with idea and is willing to put in the effort, the company will help finance and support the endeavor

Business results:

• While sales fell in 2009 vs. 2008, it experienced only half the decrease of its industry and remains profitable
• High average employee tenure of 7.5 years

What are your takeaways from watching this video?