1992 Quality of Life Optimas Award ProfileBRBen & Jerry's Homemade Inc
Then two best buddies, Ben and Jerry, came along and used the milk to make superpremium ice cream and frozen yogurt. And it was great. So they made money—lots of it.
And as the cosmos aligned in perfect harmony, Ben and Jerry created a company to make the ice cream and said, "Let it be a workers' paradise and let it be fun."
And from this ideal, a human resources department emerged to give form and shape to the company's culture. And HR breathed life into a corporate environment that places a great value on each employee, rewards workers substantially for their labor and encourages them to give something of themselves back to their community. It also cheers employees on to have fun while they pursue the almighty paycheck.
And that was positively otherworldly.
So Personnel Journal gave Waterbury, Vermont-based Ben & Jerry's Homemade Inc. its 1992 Optimas Award in the Quality of Life category for creating the supportive environment for employees, which, in turn, helps support the company's fiscal vitality.
It would be tempting to rest after spending so much energy creating such a brave new world. But Ben & Jerry's is a company with a unique mission: to do more than just make ice cream. It also strives to make a difference in the world. The company measures its success by how much it gives back to the community—locally, nationally and internationally. The organization even refers to the dual bottom line in its mission statement (see "Ben & Jerry's Statement of Mission,"): to be profitable for its shareholders and to be socially responsible, inside and outside the organization.
And that, actually, was outstanding—especially for Ben & Jerry's employees. The company not only provides compensation and benefits that rank with America's largest employers, but it also takes the employment relationship a step beyond just handing out paychecks. It holds "a deep respect for individuals and for the communities of which they are a part."
For Vermont, the organization is big. It has 400 workers, placing it among the state's top 10 employers. In revenue, it's also big—$100 million in 1991, and growing.
Although some employees at Ben & Jerry's must take on a greater responsibility than others, what distinguishes the work environment is the fact that employees are treated and rewarded fairly. Every employee's opinion is sought out and valued.
Fun is a corporate mantra.
Jerry Greenfield, the company's 41-year-old cofounder and self-proclaimed minister of joy, often has been quoted as saying: "If it's not fun, why do it?" So, amid the fury of ice-cream making (they can't make it fast enough to supply the demand in the 38 states in which it's distributed), everyone can expect to have some fun while they work.
That's why, in 1988, Greenfield created the Joy Gang, a roving band of merrymakers, who, at any given moment, may be seen celebrating those lesser-known holidays, like national clash-dressing day. This holiday provides the unfashion-conscious workers with a chance to show off their stuff—exaggerated to the limit, of course. On clash day, the most outrageous outfits are rewarded with such prizes as glow-in-the-dark religious statues and rubber crustaceans.
Clash day was the brainchild of Mitch Curren, who calls herself the company's "PR Info Queen," (she even tells you this on her voicemail message) and is a fringe member of the Joy Gang. Curren helps generate ideas that promote joy at the company's central support office. Her most creative ideas usually slip into her psyche when she slips into either her bear-claw or her furry-mice slippers. But, of course, "that's only during the winter," she laughs. In the summer, her ideas usually flow while playing with one of the many toys she has at her desk.
The volunteer group's sole mission is the relentless pursuit of joy in the workplace, leaving a trail of deliriously happy employees wherever it goes. The Joy Gang's grand pooh-bah of joy is Sean Greenwood, a tour department employee. (Ben & Jerry's is among the top two tourist spots in the state.)
The Joy Gang also has five other employees from different departments and levels of the organization. "Members float in and out of the group depending on how busy they are," says Curren.
Once a month, the Joy Gang sponsors an event, either for the entire company, or for a particular department. For example, the production workers (on the line making the ice cream) often have been the beneficiaries of some wacky activities initiated by this eccentric troop. "One night they cooked a complete Italian meal for the third-shift workers (11:30 p.m. to 8:00 a.m.) and brought in a DJ to play tunes on request," remembers Curren. They also gave out prizes. "It's energizing. They help put the fun into coming to work," explains Curren.
In the rare moments when Ben & Jerry's workers put the silliness aside (which isn't easy for them to do), they sometimes may mistake Ben & Jerry's for employee heaven because, they say, they're free to express themselves as individuals and to express their opinions. "It wasn't until I actually got into the company that I really came to appreciate it, but this is a very, very open company, where you can work and be yourself," says Curren, who was employed as a college English teacher before working at Ben & Jerry's. "No one here is in the closet—and I mean that in the literal sense. I'm an openly gay person, and my partner works in the marketing department. This is a company that's very open and accepting; there aren't any lines drawn. I can't imagine any typical company making me feel this comfortable."
The comfort factor starts with the language the organization uses in its communications. For example, gender- and sexual orientation-related terminology is selected carefully to ensure that no one is excluded or offended. An equal-opportunity vocabulary is used in all company memos, guidelines and handbooks, and all terms are gender- and sexual-orientation neutral. "For example, we use the term partner instead of spouse," says Liz Lonergan, Ben & Jerry's HR manager.
The same attention to equality is given to company benefits. In fact, the organization has offered domestic-partner insurance to employees' (unmarried heterosexual or homosexual) significant others since November 1989.
Linked prosperity is the basis of compensation.
The organization's compensation philosophy always has been one of linked prosperity—if the company does well, they all do well. Ben & Jerry's, which was founded in 1978, has even outlined this philosophy in the company's mission statement. The organization maintains what it calls a "fair" ratio between the lowest and highest salaries. In 1990, the ratio was changed from 5:1 to 7:1, basically resulting from growing pains: The company had grown, and the salary structure no longer fit. (The ratio calculation is determined by adding the lowest wage for a full-time employee—employed for at least one year—to the value of the benefits.)
Through a profit-sharing plan based on each employee's length of service, workers have another way to share in the company's wealth. "We take 5% of the company's pretax profits and divide that by the number of months everybody in the company has worked," says Kathy Chaplin, personnel operations manager. That number is then multiplied by the number of months the individual has been working there. The end figure is his or her bonus. In addition to this profit-sharing plan, Chaplin says that some individuals may receive a "spot bonus," but the profit-sharing plan is the same for everybody.
The minimum wage has just been raised to $8.00 an hour, while corresponding increases (7%) and top salaries have been capped at $100,000 by the board of directors until the lowest salary paid reaches $8. 25 an hour. The average per-capita income of Vermonters is $17,436. At Ben & Jerry's, the lowest salary plus benefits equals roughly $22,000 a year.
The work environment is employee-oriented.
In the summer, many employees wear shorts, and T-shirts are a wardrobe must. In the winter, they wear jeans. You'd be hard-pressed to find anyone at the company who owns a tie, including the cofounders.
Just because they don't wear suits and don't have a dress code doesn't mean they aren't serious about what they do. They just happen to be extremely comfortable while they're doing it.
The HR managers, for example, feel that it's especially important to dress as casually as the workers do, because 70% of the company's employees work in manufacturing. "It makes it easier to relate to them," says Lonergan.
Communication also is important at Ben & Jerry's—and it goes both ways. Every six weeks to two months, staff meetings are held. The company founders often attend, and can be seen telling jokes and giving pertinent information about what's happening inside the world of Ben & Jerry's.
"We actually can talk to Ben and Jerry, and they tell us what's going on. We do a lot of listening at these meetings. They're very informative and help us know what's happening," says Julie Labor, one of the company's production line workers in the Waterbury plant.
At other organizations, she says, she didn't even know the company leaders' names. "They probably were just sitting at home collecting a paycheck. I don't know. I never saw them," says Labor.
Ben & Jerry's cares about what employees think about their workplace, says Labor. A 10-page employee-opinion survey has been conducted twice, in 1990 and 1992, by the HR department, and includes a range of topics, from how the workers feel about the organization's stand on farm aid to what they think about the company's benefit plan.
This year's survey indicated that in most categories, employees were quite satisfied with their work lives, more so than the 1990 survey had indicated. "In general, the rating was more positive," says Chaplin. Another indicator of employee satisfaction is the turnover rate. It's only 12%, which also indicates that, for the most part, once people get into the company, they stay.
"At the other companies I've worked for, they didn't even bother to take a survey," says Labor. "They didn't care. We were just like robots. Here they care about our opinions."
HR puts together proposals, which then are examined by the HR advisory group. Employees who make up this group are selected from areas throughout the company, such as production. They discuss the benefits proposals with other line workers and relay the information back to HR.
When it was considering a change to the short-term disability plan last year, HR asked for the advisory group's input. With its suggestions, HR then finalized the proposals, got approval from senior management and implemented the plan.
When looking at changing the company's employee programs, Ben & Jerry's first considers the impact it will have on the workers and then the impact it will have on the budget. "We make decisions based on what's really best for our workers, not on the dollar amount. We ask ourselves, 'How is it going to improve employees' lives?'" explains Chaplin. For example, if everyone agrees that a certain benefits change should be made, but it isn't in the annual budget, HR tries to find a way to do it anyway.
"The rate at which we actually change things can vary," says Chaplin. "Sometimes it seems as if things change really quickly, and other times it's like pulling teeth, because we want to have group involvement, and we want to make decisions that are based on looking at the customer [the employee]. The entire quality movement rests on checking in with customers and asking what they think of your product."
Although it's good to get feedback from employees, it also makes the process more complicated, says Chaplin. "It's more work. That's probably why a lot of companies don't do it," she says. "It may be more time-consuming, but in the end, it affects lives. We're giving employees the input and the education to make the right decisions. I think people feel good that they have some say about what they're getting."
Management is a process that's also up for discussion at Ben & Jerry's. Employees get to rate that, too, through the yearly rate-the-boss surveys. Upward appraisals give HR solid information on how employees think individual supervisors are doing. Once these appraisals are complete, HR looks at problem areas and meets with supervisors to discuss behaviors that need modification.
Chaplin says that she thinks it's important for employees to rate their bosses, although she realizes it may be a stretch for some workers to do it. "I think it's human nature to think that if you say something bad about your boss, you're going to get into trouble," explains Chaplin. To alleviate the formality of the exercise, she says that employees are educated about the process and are encouraged to rely on HR between upward appraisals to discuss any difficulties they may be having with their supervisors. This ensures that any problems that are noted on these appraisals aren't a surprise when they reach HR. Says Chaplin, "I think it adds to the quality—feeling good about yourself, feeling good about the things you do and feeling good about your boss."
Another example of employee involvement is apparent when looking at the process by which the HR department expanded the 401(k) program last year. Benefits Administrator Carol Hickman says that she organized employee focus groups—to get input and suggestions—after she came up with the basic plan design. Employees' ideas helped form the final plan. When it was time to sign up for the 401(k), HR conducted informational meetings to outline the choices. To encourage every worker to attend the meetings, which were offered at various times throughout the day, HR offered a door prize (a $50 grocery market gift certificate) to small groups of employees, and two door prizes for larger groups of 40 to 50 employees. "We had a 100% turnout for the meetings," Hickman explains. About 80% to 85% of employees actually have signed up for the 401(k).
Although no employee focus groups have met yet this year regarding HR-related topics, the department is planning to conduct some soon, covering such topics as the wellness plan, insurance deductibles and profit sharing.
Social responsibility is a core value.
Wherever Ben & Jerry's workers go, social responsibility is sure to follow. For instance, during a recent trip to New Orleans for the annual American Management Association's human resources meeting, Lonergan went out on one particular evening with a group to see the city sights. As the group headed up one virtually unpopulated side street, she noticed a homeless man sitting on the sidewalk. Lonergan paused, put some money in his hat, and caught up with the rest of the group.
Whether it simply was an act of personal caring, or a knee-jerk reaction to values instilled in her by Ben & Jerry's—for Lonergan, it was a moment of choice, and she decided to take the road less travelled.
"Business has a responsibility to give back to the community," says Ben & Jerry's other cofounder Ben Cohen (also 41 years old) in company literature. Each year, 7.5% of the company's pretax profits go to a worthy cause that workers help choose.
The holding body and distributor of the 7. 5% earnings is the Ben & Jerry's Foundation. In 1991, the Foundation received 1,243 letters indicating an interest in funding. In all, 73 organizations from 24 states received grants totaling $376,084.
Ben & Jerry's also has designated half of the proceeds it collects from tours of its manufacturing facility in Waterbury for what's called the Entrepreneurial Fund. This fund awards low-interest loans to people starting new businesses, including employees. To receive funding, the new business must have a socially correct theme.
The other half of the money from tours goes to the Employee Community Fund Committee (comprising rank-and-file employees), which meets monthly to evaluate requests for money, and to award cash grants to local causes.
On the home front, any Ben & Jerry's employee may volunteer to work in his or her community and be paid the normal rate for this work. "Interested employees are invited to design their own community volunteer program. It's limited to a total of five employees performing 50 hours of community service each year," says Chaplin.
Curren, for example, is taking some time off from work to help a local humane society care for some puppies that were rescued from a puppy mill, which had been charged with animal abuse. "I'm setting up a dog flea-dipping party, and we'll give all the money to the humane society," says Curren. She even adopted one of the puppies herself and named him "Taxi."
Approximately 100 of the company's employees work at the manufacturing plant in Springfield, a small, southern-Vermont town. In the summer and fall of 1991, the second-shift production line was closed for three and a half months. Instead of laying off those employees during that period, about 35 of those workers remained on the payroll to do odd jobs around the plant and in the community. What did they do? They painted every fire hydrant (100 of them) in North Springfield, did yard work, and winterized homes for elderly and families in which a member has a disability. They also put on a Halloween benefit at the plant, for local children's causes.
To help the global community, whenever possible, the company tries to buy ingredients for its ice cream that support a philosophy of "caring capitalism. " For example, cashew and Brazil nuts are purchased from native forest people in Brazil, who now earn three to 10 times their previous income—a more lucrative venture than deforestation. Also, the blueberries the company purchases are grown by Maine's Passamaquoddy Indians, and this helps support economic development among Native Americans.
Work and family bonding goes beyond the job.
Friendships endure; a lot of people socialize with other workers after the work day is over," explains Curren. Sometimes they get together for fun. At other times they just help each other out when the going gets tough.
Labor says she's particularly grateful to some of her co-workers who helped her out last year during a difficult time in her life, during which she needed to take a month off from work. The company allowed her the time to do that. In addition, some of her colleagues took care of her two children, a six-year-old daughter and a son who's two. "They took my kids home with them at night, fed them and made sure they were OK—and they did this for 30 days. That's incredible to me," says Labor. "I couldn't ask for a better company. They gave everything back to me—my life, my kids—everything."
Labor says her job on the line at Ben & Jerry's is better than other factory jobs she has had. "Those jobs were terrible compared with this," she says. Labor explains that, at the other production line jobs, an alarm would ring at break time. The employees would turn off the machinery and leave the room. "Then this stupid buzzer would go off when the break was over, and we'd all have to go back in. But here, the lines keep running and people take our places while we go on a break," she says. "And the atmosphere here seems more family-like. You really get to know the people."
In the production area, employees listen to music, which rotates between one of the three stations that's broadcast in the area. "Actually, the Joy Gang bought our stereo. We listen to music and enjoy our work." says Labor.
"In most factories like this, you can't play music at all," says Scott Sandifer, production manager at the company's Waterbury plant and Labor's supervisor. He's worked at several other manufacturing plants and says he has never seen any other plants that allowed music in the production area. "Here we have speakers mounted on the ceiling. It's cooking out at a good volume. It's nice," he says.
Although this helps improve working conditions, Sandifer points out that it's still production-line work. "It's a hard job. We try to make the environment as relaxed as we can, but the work is still hard," he says.
While their parents work, some employees' children spend the day at the company's children's center—another benefit that enables workers to balance work and family life. The center is in a renovated farmhouse on land adjacent to the company's headquarters. A gentle stream runs quietly behind the property.
The center opened two years ago and is available (on a sliding-fee schedule), not only to employees' children who are kindergarten age or younger, but also to other kids of the same age who live in the community. "We felt that it was important not to limit the program to children from high-income, middle-income or low-income families," says Dave Barash, former director of HR at Ben & Jerry's and who now is the director of social ventures.
The center is open for eleven hours a day, from 7 a. m. to 6 p.m. Currently the center serves 50 families and 36 children. Of those 36, approximately 65% are the children of employees. Families of Ben & Jerry's workers pay 10% of their salaries per child to make use of the center, and non-Ben & Jerry's families pay 12%. It costs more for additional children although the rate is incrementally discounted for Ben & Jerry's workers.
Employees who work the third shift, for example, and who want to have their children at the children's center while they work, can ask to have their shifts changed to accommodate them. "In those cases, we try to get them into a first-shift job, and then get their kids into the center," says Barash.
"Child care is one of the toughest issues that employers have to deal with," says Lonergan. Ben & Jerry's decided that the need by employees for such a center was so significant that it's running the center at an expense to the company of $90,000 a year.
The human resources department investigated the possibility of starting the facility four years ago while looking at a range of issues concerning family and work. "We developed a three-tiered approach to accommodate the everyday issues that employees run into as they try to work and raise a family, and to maintain a healthy balance in their lives," says Barash.
The first stage was going through the company policies and looking at ways to adapt them so that they would be more worker-friendly. Then changes were made to include such policies as allowing employees to use a sick day to care for a sick child or putting vacation time together with other kinds of personal leave to create blocks of time for personal use. The policy now allows workers to take a leave of absence for the bereavement of a significant other and for his or her children.
The second stage was implementing a flexible-spending account program with a dependent-care component. "We set that up with seed money of $500 per person spread over two years: 1990 and 1991, to encourage participation," says Barash.
The third stage was putting in the children's center. Although for several years, the human resources department provided a resource-and-referral service to employees that offered day care information, it was time for improvements. "We put a team of employees together from throughout the company to study family-balance issues and come up with a series of recommendations. The center grew out of that," says Barash.
HR supports company values.
Ben & Jerry's HR department essentially is decentralized and has 10 staff members. There's a human resources manager and an assistant at each of the plant sites, and the others work in the central support office in Waterbury.
The HR department has a wide range of responsibilities, which span the gap between the traditional and the modern and include everything from throwing parties to holding a seat on the senior management committee to helping guide the firm's strategic direction.
R sponsors fun activities for employees. For example, it has thrown a winter solstice party, for the past couple of years, instead of a Christmas party, "because not everyone is Christian," explains Lonergan.
This winter, HR also sponsored a gift week. "It was sort of like a Hanukkah celebration," says Hickman. "Once each hour, HR would announce a name or two, and the employee would receive a gift." The gifts included small items, like key chains and pens, and larger items, like small televisions and portable radios. "It really boosted morale," she says.
Whenever a formal party is planned, HR arranges for child care onsite, so that everyone who wants to can attend.
During the past six years, sales of Ben & Jerry's has increased tenfold. This has caused tremendous growth in the work force, and it's now moving from an entrepreneurial start-up to a professionally managed firm.
For human resources, this has meant growth and change, too. It also has meant that it can experiment with some of the latest innovations in organizational design, including TQM.
"Whether it's self-managed work teams or participatory management, it has to do with people's taking more responsibility for their jobs," says Barash.
In the company's new distribution center, for example, there are 25 workers. All are responsible for getting the work done.
"It's too early to tell, but so far, it has been successful," Barash adds. They also plan to experiment with participatory management after the completion of the third manufacturing site in 1993.
"HR supports self-management by rethinking how compensation policies and delivery systems work, rethinking decision-making, rethinking staffing and compensation—and then reinventing it," Barash
Self-management creates an atmosphere in which employees can grow as individuals through a lateral-skills-based program. As the employees move laterally within the organization (their goal is to remain organizationally flat), there will be less upward mobility, so the compensation structure also will need to change. HR will look at this carefully during the next year, says Barash. "You can't change compensation without having the organization change, and you can't change the organization without having the compensation change," he says. Employees are the ones ultimately affected, so HR wants to be sure all the pieces are in place before the overall structure changes.
Adds Chaplin, "We're becoming so large and so multisided that we're more decentralized, which makes things challenging. It can be a painful process, because you want to make sure everything is consistent, and you want to make sure one side isn't going overboard with spending while the other side is penny-pinching."
Continues Barash, "The role of the HR people in this company, therefore, is to act as coaches and resource people, to give people the tools they need and to teach them how to use them, so they can handle a lot of stuff themselves. I think that's the longterm direction for human resources in this company."
There's always a lot to do, say the human resources professionals at Ben & Jerry's, and sometimes workers aren't happy about certain changes. Because the company provides so many benefits for its workers, there's a heightened expectation. Is it hard at times for HR to manage?
"Yes," says Lonergan. "If you offer people a lot of choices, you sometimes have to hound them for forms and things," she says. "They also expect a lot from us.
"But this isn't a workers' nirvana," Lonergan says. "We're a good company—but not a perfect company." She also points out that it can be a stressful place in which to work. "Sometimes we feel as if we were in a petri dish, because everybody's watching us."
One issue with which Ben & Jerry's continually struggles is minority hiring and retention. Because Vermont's population is 98.6% Caucasian, it's difficult to find minority individuals locally. At the end of 1991, the company had only three African American employees.
The company is diverse in other ways, however; 40% of the company's work force is female and three of the six senior managers are women. And the number of women in management is rising. Women also now hold five of the 12 positions on the company's new quality council.
Does Ben & Jerry's bring out the best in employees? Do they appreciate the company? "When you've been treated so well, it's hard not to appreciate it," says Labor. "And I'm not the only one—that's the best part about it. They do it for everyone. They really do go out of their way."
At Ben & Jerry's, quality is measured one employee at a time. And it shows.
Personnel Journal , November 1992, Vol. 71, No. 11, pp. 50-57.