Aug. 17, 2012 at 8:05 AM ET
Companies often tout their workplaces as an inviting environment for employees. Yet many are far from it, and employees at many of America’s largest corporations dislike, or even hate, their jobs. With some of these companies in deep trouble, having disgruntled employees makes improving their operations that much harder. Or, some might say, it is their bad relationship with employees that caused some of their problems in the first place.
Often, however, a combination of perceived low pay, disillusionment with management decisions and a dysfunctional culture that values making money over customer service creates unhappy employees at some of America’s best-known corporations. Running a company with dissatisfied workers is hard enough, but the problems are compounded further as the companies find it difficult to hire new, skilled workers when the opinions of current employees are so harsh.
In order to identify America's worst companies to work for, 24/7 Wall St. examined employee reviews at online job site Glassdoor. To be considered, companies had to have a minimum of 300 reviews. Of the 202 companies that made the initial sample, the company reviews were mixed, with few receiving high scores, few receiving low scores, and the majority of companies getting mediocre scores. Glassdoor’s employee reviews rate the companies on a scale of one to five. Based on these ratings, 24/7 Wall St. identified the 11 publicly traded companies that received the worst scores -- a score of 2.7 or lower, putting them in the bottom 10 percent of the 202 measured.
Nearly all of the companies that received the lowest scores are either in retail or regularly communicate with customers through relatively low-paid workers. And the terrible relationship these companies have with their employees often extends to their clientele as well. Most of the companies on this list are in industries that do poorly on customer satisfaction surveys, including satellite TV, retail and banking. Sears and Dish Network, for example, received among the worst ratings in their sector on the American Customer Satisfaction Index, and RadioShack was listed on MSN’s 2011 Customer Service Hall of Shame.
24/7 Wall St. also looked at the complaints the employees had against the companies to find common trends. By far, disgruntled employees often felt they were not paid enough for their services. This was the case with each of the worst companies. Many workers also believed that promotions were rare, and raises -- when they did come -- were extremely low. One Bank of New York Mellon employee complained: “In terms of advancement, you're really limited on mobility outside of the division unless you have a lot of connections. Pay is well below street levels.”
Among the customer-facing companies on the list, another common complaint dealt with company policy strongly emphasizing sales at all costs, frequently at the expense of customer service. This often involved using extremely hard-to-meet performance metrics, such as hourly sales quotas. One complaint from a Dillard’s sales representative read: “A culture of intense, even savage competition amongst employees to fulfill impossible sales quotas and SPH (sales-per-hour) goals that lead to much bad blood and even outright hostility.”
Other common complaints included rude and inconsiderate management, poor training, awful hours -- including being required to work holidays -- and general mistreatment of employees.
Low employee satisfaction, we first believed, was strictly a function of low pay, long hours and handling a large number of customers. But Samantha Zupan of Glassdoor explained that was not a fair way to approach the data. “Customer service is not easy,” she said. “But one size does not fit all. Workers at retailers like Nordstrom and Costco have high work satisfaction.” At these retailers, “It is important for management to connect with employees. Workers get to see management’s values.”
If “connection” with management is a hallmark of employee satisfaction, it is easy to see why workers are not satisfied at some of the companies on this list. Some of the corporations, like Hewlett-Packard and Sears Holdings, have had repeated turnover in their corner offices. Notably, almost all of the CEOs of the companies on our list get very low ratings from employees as well.
Another factor shared by many of the companies on this list is the perception that they have been bulldozed into the ground by competitors. RadioShack falls into that category. So do OfficeMax and Dish, which have been overwhelmed by large numbers of rivals.
Finally, most readers will not find the majority of the companies on this list a surprise. Most have been hurt by poor brand perception, years of layoffs, poor sales, bad public relations and falling stock prices. Whatever else may have caused the workers at to turn against their employers, public opinion has not helped.
24/7 Wall St. identified the worst companies to work for based on an analysis of company reviews by Glassdoor. We considered the 202 companies on Glassdoor with 300 reviews or more, and identified those that received scores of 2.7 or less. Of the 19 companies that received these low scores, we examined the 11 publicly traded ones. Sears and Kmart, wholly owned subsidiaries of Sears Holdings, were treated as one entity for the purposes of this article. Glassdoor has reviews for 191,081 companies on its site with an average score of 3.1 and a median score of 3. For the 202 companies we examined with at least 300 reviews, the mean score was 3.16, while the median was 3.2.
These are America's worst companies to work for.
1. Dish Network
Dish Network Corp. employees have the overwhelming task of managing more than 14 million subscribers. And Dish management has to be worried about its relationship with customers. It has been losing subscribers in an industry that includes streaming providers like Netflix, cable companies and telecoms, which have introduced fiber optic cables to the home. Customers at Dish are also likely to be upset because of battles between the network providers and the satellite company over carriage fees. AMC was recently off the Dish system for over a month.
Many reviewers objected to the company’s long hours and no holidays. “You work all day all night. Your day starts from 6:45am till 6pm or 10pm You work every holiday that your day falls on.” It is no surprise then that reviewers suggested employees were unhappy with management, citing “mandatory overtime” and “no flexibility” with schedules. Perhaps the dissatisfaction of employees is affecting customer satisfaction. MSN Money awarded Dish a spot in its 2012 Customer Service Hall of Shame, noting that Dish’s customers did not like that the broadcaster had dropped channels and seemed to prioritize sales over quality service.
Dillard’s Inc. operates more than 300 retail department stores, mostly in the Southwest, Southeast and Midwest. While revenue has dropped for a number of years, recently Dillard’s has done very well, despite competition from other mid-tier retailers.
Dillard’s largest problem with employees may be CEO William Dillard II, who is part of the founding family. His CEO approval rating in the Glassdoor research is an extremely low 21 percent. The Dillard family owns 99.4 percent of the corporation’s voting shares, according to the company’s proxy. Bill has family with him at the top of the company. Alex Dillard is president of Dillard's. Mike Dillard is an executive vice-president of the company. The three have made more than $51 million as company officers over the 2009 to 2011 period.
Like many of the retailers on this list, Dillard’s employees regularly pointed to the company’s unattractive sales incentives. One representative review indicated that high turnover was the result of employees being paid on the number of sales made per hour instead of based on a commission. "People either ended up quitting before their review or being fired randomly one day because of their sales.”
RadioShack Corp. operates about 4,700 retail stores under the RadioShack brand name in the United States and about 1,500 Target Mobile centers. The retailer has had almost no success as it has labored to compete with larger rival Best Buy Co. Inc. and a number of other retailers that have consumer electronics departments. In the past few years, RadioShack’s largest problem probably has been the rise of Amazon.com Inc. as a huge e-commerce vendor of electronics.
RadioShack’s trouble has taken an ongoing financial toll. Last quarter it lost $21 million and suspended its dividend to save money. On July 30, 2012, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings to B- from B+.
Reviewers were consistently unhappy about the retailer’s sales commission structure and the long hours. Like several companies on the list, reviews indicated that the company limits commissions to certain products, instead of paying based on sales. “Over the years compensation has turned into a big joke. You MUST perform in all metrics (service plans, batteries, cell phones, etc) to get any sort of bonus as an associate.” The focus on sales has not done its customer service image any favors. Consumer Reports gave RadioShack a “naughty” spot on its 2011 Naughty & Nice Holiday List, noting that the company has openly acknowledged setting different prices for the same products.
Hertz Global Holdings Inc. operates a rental fleet of approximately 355,500 cars in the United States. The business is among the most competitive in America. Hertz is up against Avis Budget Group Inc., Dollar Thrifty Automotive Group Inc., Enterprise and ZipCar Inc., in addition to a large number of smaller operations.
Hertz’s second quarter was a good one, with revenue of $2.2 billion, an increase of 7.4 percent year-over-year. But Hertz remains the largest company in its industry with roughly 8,700 corporate and licensee locations in nearly 150 countries. Despite its size, the company continues to be under relentless competitive pressure. Both revenue and net income were smaller in 2011 than they were as recently as 2007.
Hertz employees regularly complained that the company’s upper management is out of touch, citing unrealistic business goals that require course changes and waste time. One review read, “Upper management has little field experience and lots of MBA’s that tell you the impossible is possible.” While the company requires that all new managers have at least a bachelor's degree, they all have to start at the bottom in the “Management Trainee” program. The relatively low hourly pay and menial jobs rubbed some recent grads the wrong way.
OfficeMax Inc. operates 978 stores in the United States and Mexico. It may be in the most brutally competitive segment of the retail market. Among the three main office supply retailers, including Office Depot Inc. and Staples Inc., OfficeMax is the smallest. And OfficeMax runs on margins that are razor thin.
In the past quarter, revenue was $1.6 billion, a decrease of 2.7 percent from the second quarter of 2011. OfficeMax reported net income of only $10.7 million, compared to a net loss of $3.0 million in the same period a year ago. Oddly enough, when OfficeMax announced earnings, the company said its board of directors reinstated the payment of quarterly cash dividends on the company's common stock, "given progress in executing its strategic plan to achieve sustainable, profitable growth." Nothing in its recent past would make that goal appear attainable.
Retail workers on this list frequently indicated that they were treated poorly by management. OfficeMax reviewers were no different, with one suggesting that the company should “learn to treat employees with respect and pay them better than minimum wage and maybe they will stick around.” In addition to inadequate pay, several reviewers complained that they were micromanaged.
6. Sears Holdings (Sears/KMart)
Sears, its stablemate K-Mart and several small divisions do business through 2,172 full-line stores and 1,338 specialty retail stores in the United States. Sears Holdings Corp., which is controlled by fund manager Eddie Lampert, holds all these. Lampert recently was given a black eye by the press as he bought a $40 million home on Indian Creek Island, north of Miami. The purchase was made about the same time as Sears made the decision to sell 1,200 stores and close another 173.
Sears Holdings has been through several CEOs since Lampert formed it via a merger of Sears and K-Mart in 2005. Lou D'Ambrosio was made chief executive in February 2011, replacing long-time interim CEO W. Bruce Johnson. The CEO shuffle has not ended years of failures at Sears as it has struggled against other large chains, particularly Wal-Mart Stores Inc. and Target Corp.
Customers will not be surprised to hear that Sears employees think the company’s “ancient systems” are in desperate need of repair. In addition to aging infrastructure, retail workers at both companies are unhappy with compensation. Sears employees consistently pointed to low starting salary and even lower annual raises. Kmart employees complained they cannot get enough pay as they are limited to fewer than 32 hours a week with shifts only “four to six hours long.” In 2011, Sears’ American Customer Satisfaction Index score was a 76 out of 100. Among all department stores and discount retailers, only Wal-Mart received a lower score.