Inside South Florida's Ultimate Software, where there's an indoor basketball court and smiling workers, you could ask the same question that is being asked about Google: Is the company successful because its employees are happy or are they happy because the company is successful?
This chicken or egg debate gets intriguing when you consider management philosophy and growth at both of these companies.
Google, whose offices abound with cool amenities, has landed as No. 1 on Fortune's List of 100 Best Companies to Work For four times, while at the same time its stock has soared 674 percent since its inception in August 2004. Ultimate has been a rapid climber on the Fortune list, recently breaking into the top 10 alongside some of the biggest companies in America, while its stock has leaped to more than $100 a share and its revenue hit $269 million.
In 2012, a fund of publicly traded companies in the Fortune 100 Best Companies to Work For list -- including Google and Ultimate Software -- performed twice as well as the Standard & Poor's 500-stock index, according to the Russell Investment Group. But experts are discovering the connection between happy workers and higher profits is about more than benefits and even contradicts everything surveys say about employee emphasis on work/life balance.
Ultimate, a developer of people management software, sprawls across eight buildings in Weston, Fla., and offers perks most companies would call impossible. It covers 100 percent of health insurance for employees, their families and same-sex partners. CEO Scott Scherr says that perk alone costs Ultimate more than $25 million a year.
Employees are given stock in the company on their first day and Ultimate matches 30 percent of employees' contributions to their 401(k) with no cap (upper limit). Employees are not forced to sign non-compete agreements or employment contracts. There's an onsite wellness coach, masseur and visits from an ice cream truck and two company-subsidized commuter vans. Most employees also receive a paid weekend getaway each year.
Vivian Maza, Ultimate's senior vice president and chief people officer, says she has the green light from Scherr to continually look at what more she can do for employees. "I want to make sure we are touching every group and every type of employee."
Scherr says he believes strongly in taking care of his employees. "From a business standpoint I think it gives us a huge advantage. We get passionate employees who take care of customers and want to have the best product out there."
Scherr, 62, founded Ultimate in 1990 with a team of four and took it public eight years later. From the onset, he believed people perform better when treated well. It's a philosophy he learned from his dad and has clung to even as his company ballooned to more than 1,700 employees. It now has IT, customer service, marketers, sales people and programmers all over the country.
Some will argue that companies like Ultimate that treat employees well do so because they are already successful and growing. Google, for example, has $48 billion in cash on its balance sheet and its offices now abound with amenities. Leslie Caccamese, senior strategic marketing manager at Great Place to Work, which compiles the Fortune list, discovered that generous perks alone -- at Google or anywhere else -- don't mean workers are happy or will work harder. "Engagement" comes from creating high trust workplaces, she says. "They are places where employees have trust in management and pride in the company. Employees feel like they are informed of important business decisions and that they are vital members of the team."
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