Workforce.com

1992 General Excellence Optimas Profile Levi Strauss & Co.

December 1, 1992
I hopped into a bright yellow cab on a sunny September morning in San Francisco. "1155 Battery Street, please," I said to the cab driver as we raced up one particularly steep hill.

"Oh, you mean Levi's Plaza?" he asked.

"Yes, that's right," I said. Although I was from out of town, I wasn't entirely surprised that the driver knew, without hesitation, exactly where I wanted to go.

"Do you have the address of every company in this city memorized?" I asked.

"No," he said, laughing, "but everyone here knows where Levi Strauss is, and I hear it's a great place to work."

The driver's familiarity with Levi Strauss didn't surprise me; after all, the company has been a San Francisco institution since 1850. His second observation was more telling. The company's reputation as a good place to work is a testament to its business success and progressive human resources strategies.

As we pulled up alongside the red brick building at Levi's Plaza, I was eager to get inside and meet with the human resources staff to see firsthand how the company works. When my day at headquarters ended eight hours later, not only had I confirmed why Levi Strauss & Co. has such an enviable reputation, but I also had experienced how the human resources team has been instrumental in shaping that reputation.

Before you learn anything about Levi Strauss, however, you have to learn about its new vision. In 1987, the senior management team at the company designed a new pattern of values for the company in the form of a new mission statement.

The senior group didn't leave it at that. It also designed a set of ideals by which the management team and employees could weave that mission into the organization—in the form of an aspiration statement.

These two guiding principles have become more than just words on paper. They are the ideals by which every operation, department and employee is measured. They also are the way in which the company has made everyone in the organization a partner in its success.

For the innovation and vision that the company has demonstrated in virtually every area of its operations, Levi Strauss & Co. is the 1992 winner of Personnel Journal's Optimas Award in the General Excellence category.

People give Levi's the competitive edge.
The second floor of the Levi's building is where you'll find the corporate HR team. In this building, there are about 100 individuals in human resources.

There are another 100 in human resources in Levi's U.S. field locations and 100 more overseas. The HR-to-employee ratio is about 1:100.

During my visit at Levi's Plaza, I first met with Donna Goya, senior vice president of human resources, who talks frankly about her background, her job and her vision for HR at Levi's. Goya has been at Levi Strauss for 22 years—all in human resources.

The jobs Goya has held at Levi's have ranged from recruitment and compensation to equal employment, and now she holds the top spot in human resources. She has been in her current position for the past seven years, and comments that her job has changed considerably during that time. Goya no longer approves every hire or termination—something she used to do—because now the company has grown too large for that. She knows that she can't get involved in every detail—and shouldn't. There are times, however, when her job reverts back to one of the traditional human resources director. "I still get involved when workers want to have a sounding board or have gone through their chain-of-command and still aren't happy with the results," says Goya, but she notes that it doesn't happen very often.

"Seven years ago, when I got this job, I decided that one of my challenges was to make the senior people understand that human resources wasn't just about the soft stuff—and that it really was about the business," explains Goya. Since her appointment to the position, Bob Haas, the company's chairman, CEO and great-great-grandnephew of Levi Strauss, has overseen the development of the company's new goals, which include a strong emphasis on valuing its employees. This has made it easier to educate top management about the value of human resources and its role in bringing employees into the organization as partners. "I really think that our senior directors do understand now that people can give you the competitive edge."

Goya says that her job has changed throughout the years, partly because the role of HR itself has evolved. "During the '70s, a lot of legislation was being passed. We had to get our programs and systems aligned and make sure that we were legal. Back then, we did a lot of administrative work," remembers Goya. "In the '80s, HR became very creative; we developed a lot of leading-edge programs that just ended up on the shelf because clients never asked for them," she recalls. "I don't think being on the cutting edge is necessarily the right focus anymore. We didn't always listen very well. I think our challenge in the '90s is to be more client-driven, to give them what they really need to be effective in the business."

Now Goya's role is more that of a visionary and a facilitator than of an administrator. "What my role is really about now is providing leadership for HR in determining where we're headed in terms of vision, focus and resource allocation," says Goya. "It's important that the people in the department know where you're headed, and understand their roles—so a lot of my efforts are spent on providing focus for people."

Programs are byproducts of a larger strategy.
That focus is apparent when you look closely at the kinds of programs that have come out of the HR department at Levi's recently, namely, such programs as domestic partner benefits, a flexible work-hours program for all employees (including production-line workers—something virtually unheard—of in the apparel industry) and a child care voucher program. Individually, each of these innovations is worthy of special notice, but to HR leaders at Levi's, they're just byproducts of a larger corporate strategy: Levi's aspiration statement.

"The aspiration statement has become a reality, not just a sign on the wall," says Goya, who actually does have a copy of it on her office wall. During my visit, I developed the distinct impression that she, and everyone else in HR, had taken it to heart. It isn't just a page of words; it's the very essence of the business.

"What the aspiration statement did was provide a foundation for us," says Goya. "It really made our jobs easier. It gave us focus. Luckily, management here meant what it said when it published that statement." Although it already has been in place for five years, Goya says that the organization still finds areas for review and change.

The aspiration statement gave us a foundation. It really made our jobs easiser, and it provided us with focus.

"We call it being on a journey, because we know the process is long-term. You don't just change everything in two years and think you're there," Goya explains.

"We have a vision in human resources that employees' lives are just as important as the quality of the product," Goya continues. Everything that HR does now is measured against the aspiration statement—Levi's blueprint for change. Under the scrutiny of that lens, the human resources department has developed its own three key strategies:

  1. To align all HR programs and policies with the Levi's aspirations statement
  2. To develop HR systems that will instill continuous improvement in the company's business systems, work processes and employees
  3. To promote the health, safety and well-being of all employees.

Although Goya provides focus for her team, she gives each department the freedom to scrutinize their own areas to ensure that they're in alignment with the aspirations statement. Many changes now are made using employee input through task forces. Each task force has a sponsor from senior management to ensure employee interaction and to support its work. Task forces usually are broad-based in terms of functions, grade levels and locations. The company pays for employees from field locations to fly to the home office to participate in the meetings.

HR usually selects the individuals to participate on a task force, although employees also volunteer. Sometimes managers recommend certain workers for the opportunity—usually to help them in their professional development.

Managers also are involved. "We typically ask line managers to become involved in the issues they're interested in," says Goya. For example, for years one of Levi's division presidents hated the company's performance appraisal process.

"He was in my office every year complaining about it," remembers Goya. When it was time to revamp the program, HR asked him to cochair the task force, and he enthusiastically accepted. The reward system that the task force suggested is being piloted in two business units, one of which is his unit.

"Now that we do a lot of work with task forces, my role has changed. Now I have to make sure we're clear on what our philosophies are: Why are we making a change? What direction do we want to take?" says Goya.

"For example, in benefits, I couldn't begin to design a new benefit plan, and that shouldn't be my role anyway," Goya says. Although she has participated in designing such programs in the past, she relies on the human resources staff to come up with their own plans.

All HR functions have begun to integrate the company's aspirations on a worldwide basis, which helps make the company consistent from location to location. "They've all had to look at their policies and programs and decide—usually using task forces—what needs to change," explains Goya.

Many areas within the control of the human resources team have changed. For example, a new compensation plan for salaried employees called Partners in Performance, (formerly called Remuneration 2000 or Rem 2000) has been developed to evaluate and reward individuals for performance that reflects aspirational behavior and supports the aspirational performance of others.

"The Partners in Performance task force was brought together in response to employees' concerns," says Cathy Unruh, director of compensation, who has been at Levi's for nine years. "The employees raised their concerns and issues about the management pay and performance program during the leadership week. They said that it didn't align well with the aspiration statement and the direction of the company." It was clear from those encounters that employees saw the previous compensation plan as traditional and focusing on a hierarchical boss-subordinate structure, rather than on that of an empowered work force.

A task force of approximately 100 employees from all functional areas met in 1990 to discuss the issue. The group's recommendations were approved by the board of directors in November 1991. Unruh's department is in the process of training employees to use the new system, which she's hoping to roll out to the work force in a year or two.

"We've realized that, before you roll out anything of this magnitude, people really need to understand the philosophy of it," says Unruh. "The training is more complex than we thought it would be. People don't understand pay." In the past, Levi's didn't communicate with employees much on this topic. Now it's discovering that this is an emotional subject. "We realized that we had a lot more work to do to get people to understand and accept what this program is about," says Unruh.

The program is designed to open the lines of communication between bosses and employees, and bases pay on how well those goals and other job objectives are met. "It isn't just paying for coming to work anymore," says Unruh. "You have to be a contributor; you have to make a difference and be accountable, and in a way that models the company's aspirations. It isn't just what you get done, it's also how you do it. The Partners in Performance plan will make that a reality."

For several years, a peer review program has been in place for salaried employees, including senior managers. However, the results of those reviews haven't been linked as directly to pay as they will be under the new pay program. A similar system currently is being developed for hourly employees.

"The theme of all of our human resources programs is partnership, and with partnership comes personal accountability, flexibility and open communication," says Goya. As partners, employees now are involved through task forces in looking at just about every area of the organization.

An HR council determines strategy.
Another way HR has focused on its direction is through its HR council, which is made up of Goya and her direct reports from the company worldwide. The council meets twice a month—once for strategic issues, and again to share information. "We meet regularly to work on developing the strategic plan and to focus the department," says Goya.

This work demands that human resources relay information consistently throughout the HR organization. "It requires a lot of staying in touch, because what we do here really impacts everything we do in the rest of the world. When decisions are made here, they hear about them in New Zealand, for instance, the very next day. The world has become so small that we need to stay in touch quite frequently," says Goya.

Levi Strauss is becoming a much more global organization. A major portion of the company's sales come increasingly from overseas. (Sales for 1991 were $4.9 billion.) "We used to talk about being global, but we really didn't act it or think it," says Goya.

"Our programs now really are global," she says, and explains that the truly global organization is one that uses good ideas from everywhere, no matter where the ideas originate. Problems surface when you dictate every policy and program from the home office, Goya says.

"We import ideas from New Zealand, Japan or Canada, and export things that we might have come up with in San Francisco," says Goya. She emphasizes that operating units in other countries have different cultural needs, so she tries to give philosophical direction rather than concrete dictums.

Goya allows human resources managers flexibility in how they develop programs in their own countries. "What leadership feels like in Japan is very different from what leadership feels like in Australia," she says, "so I allow them to put their own local spin on the program."

Interestingly, Goya observes that programs at Levi's organizations in different countries are "amazingly consistent." "Our values aren't San Francisco values, or California values, or U.S. values," she says, "they're global values."

The human resources department also is taking on a more global perspective. "We're beginning to follow through on our global thinking in terms of developing global human resources managers," says Goya. "We're looking at bringing high-potential people in HR over here from the Asian Pacific division and from Europe. Our challenge is to develop a more global focus—that's the way the business is going, and we need to make sure that HR's prepared," says Goya.

HR personnel now have opportunities to move into positions in other countries. This process, however, depends on an individual's own initiative. "The way it works here is, people have to take personal accountability," says Goya.

Jobs are posted, and employees apply. Employees in HR and every other area of the organization must take responsibility for their own development. It's part of the partnering process that Levi's is embracing. "We don't target different job tracks for people. Employees can work their way up," says Goya. They must partner actively with their boss, however, to make sure that they're developing in their chosen direction.

Sometimes, as they move along the HR development path, human resources employees may move into a line assignment for a while—but it's always their choice. "We don't target people to do different things and outline their career paths for them," says Goya. She says that many people in human resources work in the business units, but may not necessarily move out of HR to do so. Other employees do leave to take assignments in line positions.

For example, someone from the recruiting area recently went into merchandising to develop experience in that area. Others have gone from human resources to the company's youth wear or women's wear units, then returned to an HR job. "It helps them get a sense of what the clients' needs are," says Goya.

Because human resources programs are developed using employee input and line management support, when Goya approaches senior management with the programs she wants to implement or policies she wants to change, it's rare that she's told no.

"We don't get told no very often when we come forward with recommendations or proposals," says Goya, "because our management understands that the people issues are business issues. The people issues probably are tougher and more critical than the other side—technology.

"You can go out and buy the technology, but if you don't have the people trained and committed to using it and making changes, changes aren't going to happen. Many companies have learned that. They brought in the latest equipment and technology, and the employees resisted," says Goya. "The second reason we aren't told no often is that we take line managers as partners. When they say that they need something, that it makes sense and that they support it, who's going to say no?"

"I think what helps bring human resources into the business is having the senior HR people be part of the senior management committee," says Goya. "That isn't the way it is in a lot of organizations—they usually report to an administrative VP, so they don't get to help formulate and shape the vision or direction of the company."

Employees learn Levi's values.
The new philosophical direction of the organization is communicated to every employee through an ongoing series of classes called core curriculum.

The training began in 1989. "We're still at it," says Goya, "and will be for a long time to come."

Every employee participates in these classes, usually on-site at the facility in which they work. Senior managers from Levi's many facilities come to a retreat center in the local Santa Cruz Mountains near San Francisco for a week of training that centers on the aspiration statement.

Such subjects as valuing diversity, leadership and ethics are the topics of discussion. Also up for discussion for participants is determining what the barriers are that prevent Levi Strauss from achieving real diversity and having everybody take leadership roles, or from being an ethical company.

After the senior managers return to their business units, Levi's provides consulting assistance to help them train their local work forces. This training helps these employees think about what they can bring to the organization as leaders. "They talk about not waiting for people at the top to come up with the answers," says Goya.

"First of all, the people at the top don't have the answers—that's a good reason not to sit around and wait for the tablets and answers to come from on high. Individuals can start with themselves in trying to make a difference. They need to decide what that difference is, what they can do in their own work environments and how they can take a greater role in leadership," Goya says. "We used to have management making these dictates and then sitting back and wondering why nothing changed—It was because we didn't give people a reason to want to make the changes," she adds.

Human resources organizes the core curriculum classes, but the executive management committee—the top nine people in the organization—sponsors it. "If it were seen as an HR program, it probably wouldn't be successful," says Goya and explains that a senior manager is present for every leadership training session and spends the entire week there to reemphasize that this is not a human resources program; it's a senior management-sponsored program.

"If the view of HR has changed so drastically at Levi's, then why would it be undesirable to have leadership training sponsored by human resources?" I asked Goya.

"I think part of the reason is based on the past," she says. "Human resources used to come up with a lot of programs and it was like giving people castor oil. We didn't ask our clients what their needs were. We thought we had the answers. "Also, a big part of it is that we're asking managers to take a lot of time to do this. People are very busy," Goya says.

It's a week-long course; values and diversity lasts three days. Ethics is three days. Goya explains, "We thought that, if human resources was the one asking people to attend, it wouldn't carry the same weight as senior managers' saying, 'Hey, we're serious about the values of this company. We're serious about providing people (throughout the organization), with the training and the skills of leaders, and we want you to go.'"

Any barriers that participants identify at these meetings then are presented, on a quarterly basis, to the executive management committee—of which Goya also is a part. Once the group identifies the most important topics, it will sponsor task forces to look at those issues.

Some specific changes to human resources programs have emerged from the work of task forces. For example, the company's new compensation program, called Partners in Performance, originally came out of task force discussions.

"Everybody was saying that the reward system was getting in the way because we weren't paying for what we say is important," says Goya. A task force was chosen to help develop some philosophies and principles about the company's compensation and reward systems. After that group had made its recommendations, another task force designed the new base pay and short—and long—term incentive systems.

After a task force helps develop a new program, it still needs senior management approval. Because a member of senior management already has been part of the team from the beginning, however, its recommendations usually are valid and useful.

"Empowerment is the most difficult issue on the aspiration statement," says Goya. "What we do in leadership is talk about empowerment and what it really means: that people are going to be making decisions at all levels of the organization. What we hope to do is have them making them in a values context," she explains.

"The idea is to trust people more. People are adults; trust them as adults, and let them work out their needs. Then hold them accountable for it," says Goya. "It frees us and gives us more time to focus on the things that are important. Sure, there will be some issues that surface from it. We know that. We may not get it right the first time, but that's how we learn."

How do you empower an entire work force? One employee at a time. "I think the way you do that is to allow people to understand their piece—how their role fits into the organization," says Goya. First of all, it means that the company must be clear about its business vision. "We're working on that—we aren't there yet," says Goya. "We really think that people understand their roles where we're headed as an organization and how they contribute to the broader vision.

"Most people want more responsibility. I guess some people just prefer to be told what to do and then do their job, go home and not take it with them. I would say that the vast majority really want a job that has some decision making and some influence, and where they have some control over their assignments." They accomplish this through the core curriculum and leadership training.

"A lot of the things we're doing are fallout from leadership training and the aspiration statement," says Reese Smith, director of employee benefits. The objective of the diversity training is to help people accept other workers for who they are.

A major topic of discussion came up in a leadership group Smith attended recently, which centered around understanding gays. "People in San Francisco, I think, are more exposed to gays, but there are other people who really don't like the issue—it's new territory for them," says Smith as he points to a snapshot of his group that had just arrived in the mail.

He remembers that, 10 years ago, one female manager in particular requested that her gay male secretary be moved to another job because she was afraid of getting AIDS. Even after it was explained to her that AIDS isn't a disease that's communicable in the office, she still wanted him relocated.

The company's response was: If it's a problem for you, you move to another job, because he's staying right where he is. "That scenario happened a couple of times," says Smith.

About the same time, some gay employees from the company approached senior management to ask if they could distribute materials about HIV and AIDS in the company's lobby to help the education process. Senior management's response? No. CEO Bob Haas thought the issue was so important, that he and other senior managers decided to hand out the educational materials themselves.

Still, there was concern from some of the employees in the company about working with co-workers who were HIV-positive. After much education and the passing of time, fears have subsided.

A work-and-family task force helps create a balance.
Discussion among employees during aspirations training led them to challenge the company to define its commitment to balanced personal and professional lives. "People were saying that in the company's aspirations statement, the company wants employees to have personal and professional balance in their lives," remembers Goya, "but employees didn't feel very balanced."

A task force was formed in December 1989 to discuss the needs of U.S.-based Levi Strauss work force in the area of balancing work and family. The task force involved 18 employees from various U.S. plant sites including: El Paso and San Benito, Texas; Knoxville, Tennessee; Morrilton, Arkansas; and Denver. There also were some employees from the San Francisco office.

Bob Haas was the task force's senior management sponsor and an active participant. Why did he choose to be a member of the group? "My first reason was the importance of the group's work," says Haas in Work/Family Task Force literature. "Balancing work and personal lives is one of our key values at Levi's, and it's important to our success as a company."

He gives a second reason: "It was clear from what employees have told me that the task force had to be willing to consider a wide range of options. I didn't want members to feel limited by what they thought senior management would or wouldn't allow," he says.

Nate Eubanks, a task force member from the Denver sales division, is quoted as saying, "It all goes back to Bob Haas. His sincerity takes this beyond just a paper commitment and makes it real."

The work/family task force identified broad issues facing employees in different parts of the U.S. and at different levels of responsibility. One of its major strategies was to conduct a survey of the entire U.S. Levi Strauss work force.

The task force gathered information from three written surveys of field hourly workers (line employees in plants, finishing centers and customer service centers), home office payroll employees (management and other white-collar workers) and sales employees. More than 17,000 workers representing more than 73% of the company's U.S. work force completed one of the 27-page surveys.

At the end of 1990, the task force gave a series of specific recommendations to the company's Executive Management Committee. "From the survey data it was clear what the most pressing issues are for employees," says Robyn Chew Gibbs, manager of work/family programs, an arm of the human resources department. "One of the task force recommendations was to designate a specific manager or department to corral all of these issues," says Gibbs.

Gibbs, who has been with the company for seven years and previously served as a management development specialist in the HR department, was chosen to head up the work-and-family department. She's now responsible for coordinating the initiatives in six areas as they relate to work-and-family issues: the company culture, work-hour flexibility, child care, elder care, leaves of ab-sence, and health and wellness.

Some of the initiatives that were suggested by the task force already have been implemented or will be phased in over the next few years. They are:

  • Management and awareness training organizationwide to communicate the company's commitment to creating a comfortable work-and-family environment
  • Flexible work hour pilots, conducted to accommodate plant employees' needs to address family responsibilities
  • A new time-off-with-pay program (TOPP), to replace separate vacation, sick leave and floating holiday plans
  • Concept of child care leave, expanded to cover care for other family members, including elders and significant others
  • Corporate child care fund, to enhance the existing community services, ranging from infant day care to after-school programs, based on worker needs
  • Pilot test of a child care voucher system for hourly employees working in field locations
  • Research on elder care programs and pilot programs
  • Expansion of employee assistance program services in the field.

It's the company's commitment to support the health and well-being of its work force. "In the long run, these are the right strategies for our company's success and the well-being of our people," says Haas.

Levi Strauss is interested in the competitive edge and designs its total compensation package to make sure it attracts talented people and stays competitive. Levi's offers such benefits as 15 paid days off after a year of service, which increases to 35 days off after 20 or more years of service.

Employees receive eight paid holidays a year. The company also offers the following plans: savings (company matches up to 10% of pay), pension, short—and long—term disability, profit-sharing and a choice of five medical options (including two dental and two vision).

"We constantly conduct studies that look at pay levels within the company and the benefits that go with them, and then compare them with some high-ranked consumer products companies. We want to be better than they are," says Smith.

"We want to be the employer of choice. When people walk into San Francisco and ask which is the best company to work for, we want the answer to be Levi Strauss," says Smith.

The company's home office receives 20,000 resumes a year but only has 150 to 200 job openings. "We have about a hundred applicants for every position," Smith says. "It's a very demanding company," he says. "We require a lot from people. Levi's gives a lot, too. The work-and-family program is much better than it was just a few years ago," he says. "In many ways, we're a lot better off than we were.

"We want to be in a strong competitive position, so we'll go the extra step and do things that aren't required—like domestic partner benefits—because it's important to us. Maybe that's the thing that breaks us out from the pack."

He seems to be right. Levi Strauss was ranked number one on Money magazine's list of companies having the best benefits in 1992, ahead of such companies as IBM, Procter & Gamble and Eastman Kodak.

Levi's recognizes niches.
Smith has been at Levi's for 15 years in such positions as benefits controller and director of employee benefits for Levi Strauss International. He has a unique view on how to approach benefits. He says that a benefits plan should be designed with everyone in mind—even if it means providing extra benefits that are used only by a small segment of the work force.

"One thing I learned awhile back is that you really have to pay attention to the little niches," says Smith. "If you look around and clean the cobwebs out of all the little niches, pretty soon you've got a pretty good place to work," he says.

For example, he first recognized a niche about 12 years ago—that of domestic partner benefits—and discussed the subject with the company. The organization wasn't yet open to the idea. More recently, the idea began to resurface during the leadership training sessions.

Then last year, an employee who is a lesbian presented Smith with a written proposal on the subject. Her proposal gave Smith a good reason to bring the subject up at the next human resources council meeting. Most council members agreed with him that it was a topic that was worth studying.

Smith wanted outside help, so he contacted a few consulting firms. From there, he selected Lincolnshire-based Hewitt Associates because it already had been studying the topic.

Based on that research and other cost projections, Smith concluded that the increased cost to the company for health insurance would be less than one-half of one percent to cover domestic partners. (The company is self-insured for its primary health benefits, including domestic partner benefits. It uses Aetna to manage the claims.)

"We said, 'OK, now we know what the costs are, and they're only this big. What are we going to do?'" says Smith. After taking the idea to senior level managers, division presidents and the board, the plan was approved.

"Why did we do it? It all boils down to aligning our practice of nondiscrimination with our policy," says Smith. "We originally started looking at it as a gay and lesbian issue, but it actually had a broader implication that really centered on marriage. We say that we don't discriminate because of marital status, so we had to change our practice to coincide with our policy."

What we try to do is to ask, 'We've made 90% of the people happy, but what about the other 10%? What about the niches within that 10%'

Since June, the company has had a domestic partner policy that extends all spousal benefits to a U.S. employee's domestic partner (a significant other, whether homosexual or heterosexual). The company defines domestic partners as persons sharing a committed relationship in which they live together, share financial interdependence, have joint responsibility for each other's common welfare and consider themselves life partners. The plan offers unmarried couples and their dependents the same medical and dental benefits as those offered to married couples.

Smith expected 3% of the employees in San Francisco to sign up, but he has seen fewer than that. In areas outside San Francisco he expected a total sign-up rate of half of one percent, but, again, has had fewer employees sign up. Approximately 200 employees have signed up.87% of Levi's total U.S. work force.

Levi's partner benefits policy won the company the 1992 Fabulous Feminist Award from the San Francisco Chapter of the National Organization for Women (NOW). Levi Strauss was the only company to win the award—the other seven recipients were individuals—all of them women.

"You don't need to have 40 people telling you they want something," Smith explains. "If even two people are saying it, you should start looking at it seriously."

He realizes that most companies do the opposite: They design benefits for the majority of employees. "What we try to do is to say, 'OK, we've made 90% of the people happy, but what about the other 10%? What about the niches within that 10%?'" If you always look just at the majority, you're bound to leave someone out.

"You never can do everything for everybody," continues Smith. That isn't the goal, but you can do a lot if you try—if you have an open mind. We've been very fortunate to have the kind of leadership here that allows us to do things like that, that allows us to experiment and try new things."

How does he know what people want and need? He conducts surveys. He goes to management meetings. He talks with plant managers. He goes to benefits conferences to see what's new. Basically, he listens a lot.

When he conducts a benefits communication meeting, for instance, he tells employees to call him if they don't understand something. "One time I was in a meeting with salespeople, and after explaining everything, I said, 'If you don't understand this material, just call me.'"

The sales manager looked at Smith in disbelief and said, "You don't mean call you, do you?"

Smith replied, "Yeah, I mean call me."

Although there are 30 employees in the benefits department who all answer calls from employees, Smith says that he likes to take some of those calls, too.

"I feel that I need to hear personally what people are saying," Smith says. It helps him stay in touch with what employees need and what they don't understand.

Although there's a defined benefits budget, when it's sensible to add something to the plan, Smith tries to make it happen. "We're willing to spend the money if it's the right thing to do, but we still don't have unlimited funds. We need to be cautious that we're spending money in the right ways," he explains.

Smith notes that the company has experienced remarkable financial success ever since it went private in 1985. As of September, the company had experienced 46 months in a row of record profits. "We're fortunate that we can afford to do some of the things that other companies maybe can't."

Smith also says that, although many programs cost money, there are many that don't. "Frankly, flexibility in most things doesn't cost you any money," he says. "We've had great success with the flex program, the TOPP program and the casual-dress program. I'm only being slightly tongue-in-cheek, but we could do away with our pension plans faster than we could do away with some of these programs, (like the casual-dress program), that don't cost us any money. I mean, if we were to try to change that—we wouldn't, but if we did—employees would riot. It doesn't cost a nickel, and people love it."

On the day I met with him, Smith was wearing Levi's™ and a gray shirt. "Am I a better worker if I wear a tie?" Smith asks. "I don't think I am." If he's going to a formal meeting with individuals outside the company, he would wear the appropriate corporate American attire, but not at the office.

The informal dress code starts at the top. "Our CEO and COO wear Dockers or Levi's almost every day of the week," says Goya.

She says that she has been asked about the company's dress code frequently by other people in human resources. "One of the questions I get when I discuss things with my counterparts is, 'What kind of dress guidelines do you have?'"

Goya responds that Levi's doesn't have a dress code. "I tell them that we assume that people will look professional. I mean, they're adults. If somebody needs some coaching in that regard, then it's up to the manager to coach the employee. In reality, we've had few problems. I think in one instance somebody wore an offensive T-shirt, and that person was coached by the manager about it. Then the person simply changed clothes," she says. "That's how these policies ought to work-trusting the majority of our employees to have good judgment."

It all goes back to the concept of empowerment.

One good example of the company's turning around the implementation of corporate policy is the company's revised industrial-relations manual. It went from more than 300 pages down to approximately 24.

"What we're trying to do is have employees take responsibility for their own actions," says Smith. That's why the TOPP program was developed—to give employees a choice about how to use their time. That's also why the organization has a job-sharing option, which allows people to work within a schedule that fits their individual needs, and a flex-time plan, even for people who work in the company's sewing and finishing facilities.

One example of turnaround of corporate policy is the revised industrial-relations manual. It went from more than 300 pages to approximately 24.

"You're supposed to work 40 hours a week. Between your boss and you, you figure out what those 40 hours are going to be," explains Smith. At the production sites, teams now are responsible for deciding their own hours.

"It isn't a place where everyone is running amok, but we do believe that flexibility helps. We also believe that allowing employees to make decisions about their own work gets us better results," says Smith.

HR helps make workers productive.
At Levi Strauss, employees believe in balanced personal and work lives, but they also believe that their jobs should be fun. "It's important to have fun," Goya says.

In September, the company usually sponsors an Employee Appreciation Day that's organized by human resources. There's a barbecue, a band and fun activities in the park that adjoins the home office.

"Sometimes we'll put on a play poking fun at management programs or policies," Goya explains. "Nothing is sacred. We don't want to take things too seriously."

At Halloween, people dress in costume at work. One year, when there were only eight people on the executive management committee, each of the seven men on the committee dressed as one of the seven dwarfs. "You're looking at Snow White," laughs Goya. "It was fun."

Aside from such big events as these, Goya emphasizes that it's important to celebrate milestones along the way. Because so many projects are long-term, if you wait until a project is finished before you recognize your accomplishments, you'll be waiting a long time.

"It's the idea of both financial and psychic recognition," says Goya. "We've always had the financial recognition programs, but we haven't had the psychic quite as much—so we encourage people to have fun in different ways."

Smith, for example, gives out a gold star to each person in his department who has done a good job. The star is etched with the words Super Star and has the Levi's logo on it. "People need recognition," Smith explains. "It makes them feel good about themselves and their jobs."

The most important work of human resources at Levi's, however, is to nurture the work force to be the best that it can be. "Human resources isn't here just to make things feel good or align everything with our aspirations just because it feels good to do so; we're here to make the work force effective and productive," says Goya.

"If we can get employees to understand the company's values, to understand their roles, what they're contributing for the larger good and to have some fun in the process, then we're providing them with a good, productive environment," she says. "That's the goal. If we have that, then we'll have people who want to be here, are committed, and will be retained. We'll have people who really want to contribute beyond the day-to-day work. They'll want to make a difference," she adds.

In keeping with the theme of recognition, on the credenza behind Goya's desk are many little awards and tokens from meetings and conferences throughout the world. "These are especially neat," she said as she showed me some little figurines depicting the Lion, the Scarecrow, the Tin Man and Dorothy from The Wizard of Oz. Every line manager who goes through Levi's leadership program in Australia and New Zealand gets a set of these figurines.

The theme also is carried throughout the week of classes and activities. These figurines, she explained, were chosen by Levi's human resources department in Australia to represent the four attributes a strong leader should have: courage, intellect, heart and the tenacity to follow your dreams.

Later that day, as I hopped into another taxi to return home from my day at Levi's, the idea of those four figurines representing the qualities of a strong leader lingered in my mind. I couldn't help but think that Dorothy, and Levi's, have the right idea: Most people do have the power to achieve their dreams; they just have to look inside themselves to find it.

Personnel Journel, December 1992, Vol. 71, No. 12, pp. 34-46.