OM in the News: Google-Style Perks Go Mainstream
Alterra’s offices house an NCAA-regulation-size basketball court, a TruGolf simulator and a 90-inch TV tuned to ESPN. Food trucks come to treat the staff to lunch, and fridges stocked with free bottles of Propel water dot the office. Alterra doesn’t make software, computer chips or driverless cars. The Utah company sells pest-control services. But its managers want employees to feel as cosseted as any in Silicon Valley. As companies try to put themselves on a path to faster growth, reports The Wall Street Journal (Aug. 5, 2015), some are mimicking the workplace practices—and lavish perks—at technology behemoths like Google Inc. and Facebook.
In industries as varied as insurance, electrical contracting and auto loans, managers are spending millions on office upgrades and amenities like free food and comped vacations, claiming that such trappings elevate jobs in unglamorous sectors, helping to recruit employees and to convince high performers to stay. Employers have begun paying more attention to their workplaces over the past two years, adding amenities that wouldn’t have occurred a decade ago.
Alterra now invests more than 10% of profits in food, events and amenities each year, and claims it is paying off. Employees hailing from competing pest-control companies increase their sales by 70% in their first full year at Alterra, and 96% stay at the company for at least a full year. The firm says the writings of Zappos.com CEO Tony Hsieh prompted its focus on employee happiness, which Hsieh claims breeds corporate success. “It’s not fair that they have all the fun,” says Alterra’s chief executive.
Classroom discussion questions:
1. Do rock climbing walls, bean bag chairs, and free mochas make a company more productive?
2. What alternative incentives can companies offer?