Ceos Employees: How They View One Another

The boss's big mistake is thinking that all his employees are just like him

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WE ASKED THE CHIEF EXECUTIVE OFFICERS OF THE INC. 500 to fill out a questionnaire, too -- not in a way that reflected their own feelings, but as they thought their average employee would. It turned out they were a bit optimistic.

If there is a pattern to the CEOs' misunderstandings about their employees, it is a very human one: too often, CEOs think employees are like themselves. Take the question of motivations. CEOs significantly overrated factors such as recognition of accomplishments and control over work as reasons why employees chose to work for the INC. 500 -- reasons often cited by entrepreneurs for starting their own businesses. And the CEOs consistently underestimated those factors that mean little to their own sense of satisfaction: things like learning new skills and convenience of hours and location.

In fact, what we found was that, although these are companies run by hard-charging, entrepreneurial risk takers, theirs is not a personality type that runs through their operations. According to an index devised by the Hay Group, INC. 500 employees at all levels are even more interested in security and less interested in risk taking than employees of large companies.

"Contrary to the popular myth, the typical INC. 500 company is certainly not populated with entrepreneurs," explains the Hay Group's George Gordon. "In smaller firms, the founder is still so involved in operational details that there may be less call for people to exercise initiative. Then too, it may be that entrepreneurs don't generally feel comfortable with other strong entrepreneurial types around them. As a result, it appears that the primary risk takers in these firms are the founders themselves."

This habit of projecting their own personalities onto employees also shows up when CEOs are asked to anticipate employees' complaints. Because they are themselves overworked and plagued by problems of company growth, CEOs expect employees to experience these problems much more than they actually do. And because CEOs are the type of people who find even modest procedures confining, they don't appreciate how much their employees really need and want them. Perhaps most important, CEOs underestimate the widespread nature of employee gripes that cluster in areas such as fairness, loyalty, and respect.

And yet there is one area in which CEOs are very careful not to think of their employees as they think of themselves, and that is in the area of money. It is a rare CEO who doesn't give credit for company successes to his key employees or talk about the work force in terms of teamwork and family. But mention pay or benefits or profit sharing and suddenly the world divides neatly into owners and hired help. It is not just that CEOs underestimate how much employees resent not sharing in the company's success, although they do. It's more that they don't see the connection between sharing and the company's continued success. At a CEO focus group in Philadelphia, they seemed to put it this way: "My employees can execute what I want done, but I'm the one with the ideas, and the success is mine."

EXPECTIONS VERSUS REALITY

Percentage gap between employee

favorability and CEO predictions

Overall company rating 24

Ability of top management 19

Company efficiency 11

Employee pride 18

Respect for employees 23

Fairness 32

THE BOSS

Employees rate the INC. 500 CEOs

% Favorable

Knows employees' names 75

Understands their jobs 61

Is seen weekly 53

Can be approached with a problem 49

Works as hard as anyone 67

Knows what's going on 68

SHARING SUCCESS

Percentage gap between employee

favorability and CEO predictions

Pay 20

Bonuses, profit sharing,

13

stock options

Medical benefits 26

Pensions 8

Company shares success 13

OTHER FINDINGS

The second-year itch. How employees view their companies changes over time. The first year elicits high levels of respect before a sense of disappointment hits in year two. By years three and four, those most dissatisfied have probably gone elsewhere, leaving behind a group of veterans who seem to get more satisfied with each passing year. The Hay Group has found a similar pattern in larger companies, though the period of dissatisfaction tends to last longer.

Satisfaction by sector. Actually, there were fewer differences in employee attitudes among the various sectors of the INC. 500 than we would have expected. Those who work in construction are uniformly the most critical of their companies even though they are the most satisfied with their own jobs.

In contrast, there are the retail employees, who are the lowest paid and the least satisfied with their jobs, yet express the highest admiration for their companies. Retail workers are also the least likely to quit anytime soon. More consistent in their views were service workers, who were the most positive in the survey, and manufacturing and distribution, who were the most doggedly negative.

THE SECOND-YEARITCH

Most employees experience a letdown

after the first year

Co. rating

% Favorable

Year 1 78

Year 2 73

Year 3-5 77

Year 6+ 82

SATISFACTION BY SECTOR

Service and retail workers are the most content

% Favorable

Service Retail Constr. Mfr. Distr.

Overall company rating 77 79 61 71 78

Challenging, interesting work 60 57 55 56 58

Fairness 46 49 37 41 39

Company shares success 46 47 20 42 36

Median pay $23,250 $18,000 $22,500 $20,000 $18,500

HOW THE INC./HAY SURVEY WAS CONDUCTED

To measure the attitudes of INC. 500 employees, INC. and the Hay Group of Philadelphia sought the cooperation of 125 companies that had been listed on the INC. 500 list of fastest-growing private companies from 1984 through 1986. The final group of participating companies reflected the geographic and sector distribution of the universe of INC. 500 companies. Companies with fewer than 10 employees or more than 500 workers were excluded.

Each company was asked to distribute a 70-item questionnaire to all its employees. Participation was voluntary and anonymous, and the survey was self-administered. Nearly 3,000 surveys were returned directly to INC. by postpaid envelope, and tabulated by Data Tabulation Services Inc., in Stoneham, Mass. Responses from companies with participation rates of less than 30% were subsequently excluded from the survey.

Once the survey results had been compiled, Hay Group consultants conducted focus sessions for small groups of INC. 500 chief executive officers, managers, professionals, salespeople, and hourly workers. The sessions were held in Philadelphia, Atlanta, Los Angeles, Boston, and Chicago, respectively.

Figures for employee attitudes at large companies were taken from the 1987 Hay Employee Attitude database compiled from proprietary surveys of employees in 1,900 U.S. corporations, ranging in size from 500 to 50,000 employees. For purposes of this article, only those large companies showing five-year sales growth were used.

The INC./Hay Employee Survey was prepared under the direction of INC. special projects editor Sara Baer-Sinnott and Fowler Shaw, management information director at the Hay Group. Analysis and technical assistance were provided by Lance Berger, Mary Searles, Bonnie Goldberg, Jim Gouthro, George Gordon, and Doran Twer at the Hay Group and Jodie Slothower and Deborah L. Weeks at INC.

Results of the INC./Hay Group Employee Survey may be not reprinted or broadcast except by permission. Copyright 1987 INC. Publishing Co. and the Hay Group. A complete report of the survey results, along with a more detailed analysis and comparison to large-company employees, will be published early next year. Copies may be reserved by writing the Center for Management Research, 55 William St., Wellesley, MA 02181.