Human Resource Management – Gaining a Competitive Advantage, 6e Noe, Hollenbeck, Gerhart and Wright
Chapter 12 – Recognizing Employee Contributions with Pay
Video Case: Working for the Best: The Container Store (11:02)
People looking for shelves and handy bins for organizing closets, garage, or dorm room need only go to The Container Store. The same goes for people looking for a satisfying place to work. Fortune has selected The Container Store twice as “the best company to work for in America” and ranked it second two other times. The recognition stems from a corporate culture based on hiring great people and motivating them to provide outstanding customer service.
Since opening the first store in 1978, The Container Store has grown to 39 stores in 15 states, a Web site offering an online design service, and annual sales of more than $500 million, an increase of 15- 20 percent a year.1 The Dallas-based retailer attributes much of its success to its culture, with the cornerstone: “Hire great people.” Management believes that one great person is worth three good people and patiently seeks the right person for the job, maybe even a customer. Then the company trains and empowers workers to do what they can to exceed expectations. One employee helped a customer learn to parallel-park in the parking lot before a driving test, and another loaned her car to a stranded customer. The Container Store continuously seeks ways to improve customer service. It replaced the old pencil and paper design method with a computer program enabling employees to plan custom closets digitally. Now orders are prepared in half the time and order errors have dropped from 10 to 1 percent.2 Sales training goes beyond products; it now emphasizes how to better listen to customers’ organizational problems and offer advice, much like professional organizers, and even to connect on an emotional level. One woman grew so close to Container Store employees during her home remodel that she threw a party for them.3
Convinced that a happy workforce leads to happy customers, The Container Store executives created an environment where “people love to come to work,” according to chairman and co-founder Garrett Boone. “If we didn’t have that strong culture, we wouldn’t have that strong effort in the store.”4 How does the company encourage outstanding service? Management has applied several motivational theories to develop a culture that includes interesting jobs and empowered employees. While Frederick Taylor and other Scientific Management proponents emphasized efficiency and viewed people like programmable machines, The Container Store takes a much more humanistic approach. It’s clear the company follows the needs hierarchy developed by psychologist Abraham Maslow, who theorized that people are motivated to first satisfy physiological needs, then safety, social, and esteem needs, and finally self-actualization needs.
Health and dental benefits, a 401(k) plan, a 40 percent discount on merchandise,5 and wages well above the industry standard help employees satisfy physiological needs. Safety needs—the need to feel secure at work and at home--are met by tolerating mistakes and urging employees to do what’s necessary to please customers. The environment helps workers feel secure by stressing integrity, honesty, and open communication. Social needs are met by The Container Store’s family atmosphere, which helps employees feel they belong to a group. Formal and informal recognition for their contribution helps employees meet esteem needs. Finally, the highest-level need of self-actualization is met by encouraging employees to reach their highest potential. Many part-timers become full-timers and rise
