Creating a healthy and vibrant workplace community where each member of our team can find fulfilling work, inspiring training opportunities, a supportive community, and a balanced lifestyle is a vital part of what we do and who we are. In 2010, we were thrilled to be named one of the “Best Places to Work” by Outside Magazine and “One of the Best Places to Work in Vermont”.
Back in 2009, Seventh Generation was named one of the Best Small Workplaces in America by HR Magazine and the Society for Human Resources Management. The review process for this award includes a survey of employees to assess engagement and gives us an independent review of how our employees feel about Seventh Generation. We now conduct this survey annually to continue to measure how we are doing and to identify areas where we have slipped or improved. In our 2010 survey, the 60% of our employees who responded provided deep insights on the strengths and weaknesses of our community.
- There is clear sense of fairness, pride, respect and camaraderie in the organization.
- Employees trust management capability but wish that management would bring a clearer sense of direction to the organization and set priorities more clearly.
In 2010, we were thrilled to be named one of the “Best Places to Work” by Outside Magazine and “One of the Best Places to Work in Vermont”.
In 2010, we worked to bridge these gaps in clarity and prioritization at the leadership level. In addition, we engaged in team building in each department though our “Authentic Leadership” program designed to foster internal engagement and open communication. In 2011, we are continuing to use the survey insights to enhance the employee experience at Seventh Generation.
To inject some fun into our working days, the company has a long-established Vibe team made up of employee volunteers who run social and community-building events. In 2010, this team revamped its offerings after surveying our associates to determine what kinds of events were most successful. The team continued to offer popular events such as “Night at the Ballpark” and the holiday party. The most popular change in 2010 was the increase in the number of informal weekday social events that took minimal effort to organize and maximized the use of our beautiful green roof deck. Employees were able to take a few moments at the end of a day to walk away from their workstations, engage in conversations across the company, and watch the sun set over Lake Champlain and the Adirondack Mountains.
The Vibe team members also supported our first-ever participation as a community in a local corporate cup 5K race. There were 28 community members who participated - many running or walking a 5K for the first time in their lives. In addition to the commitment of being in the race, there were groups who trained for the event together. The whole community then celebrated the group achievement at the office the next day.
Our benefits and compensation package is crafted to allow employees to reach their full potential, to express their commitment to causes larger than themselves, and to share in the profits of the enterprise. Our benefits include:
- Comprehensive health insurance including coverage for unmarried and same sex partners;
- Company-paid education and training opportunities and sabbatical leaves that contribute to personal and professional growth;
- Flex-time and telecommuting;
- Energy-saving incentives for employee home improvements and the purchase of fuel-efficient cars; and
- 16 hours of paid time off per year, per employee, for volunteer efforts – a new benefit in 2010.
In 2010, we also made some changes to our health insurance offerings without materially changing our enrollment. We have had a health insurance premium structure that increased the company contribution every year an employee continued to be employed at Seventh Generation. This practice had been self-funding with newer employees supporting the cost of longer tenured employees. In 2009 and 2010, we reduced our hiring significantly. As a result, the company’s insurance portion was not sustainable and we had to redesign our health insurance benefit. This was a tough decision for the company to make and we were very concerned about the impact to employees. We were able to design a new High Deductible Plan coupled with a company-funded Health Reimbursement Account. The new benefit and our negotiations with the health insurance carriers allowed us to offer employees a very robust, lower-cost health insurance plan to help minimize the impact to employees. About 40% of our employees now contribute less while 60% now pay the same or more than they did under our previous system.
Our CEO in 2010, Chuck Maniscalco, maintained our policy of ensuring that no one’s base salary will be more than 14 times the lowest paid full-time employee and no more than five times that of the average employee.
2010 was a year with many personnel changes and significant new work initiatives – all in a year that was not going to trigger a bonus payment. In recognition of the team’s tremendous accomplishments, the company implemented a one-time, discretionary bonus payment.Also in 2010, we adjusted our incentive rates upward offering a target incentive rate of 10% for most employees, 17.5% for managers, 20% for Directors, 25% for Sales Directors and 35% for Executives. This generated significant discussion early in the year as associates at the lower end of the salary scale grappled with the tension between appreciating a higher bonus rate while accepting that higher paid employees could receive bonuses exceeding the annual salaries of their lower paid colleagues. We engaged an outside company to review our compensation programs and our positioning of employees within the programs against the external market. The study verified that our compensation programs were competitive within the marketplace.
Employee Shares: Throughout 2010, we were engaged in a dialogue about what employee ownership at Seventh Generation should look like in the future. The Board hired an independent compensation expert to evaluate our employee compensation plans with the guiding principle that we want to be at the highest levels of employee participation among our peers. The current program was too aggressive in sharing ownership with employees for the business to be sustainable in the long run. Back in 2006, we adopted a unique Special Employee Shares (SES) program and offered everyone who owned expiring options the right to exchange their options and buy SES shares. Seventh Generation also offered this SES program to new employees as part of our new-hire benefit program and, more significantly, the company made SES shares a part of the annual incentive program.
By the fall of 2009, as the company faced the need to raise additional growth capital to fund a national advertising campaign, the Board realized that the huge amount of dilution as a result of the SES program would make it impossible to attract new investors. The company could not continue to give away approximately 5% per year - eroding the value of the shares held by non-employees. The long-term unsustainability of the SES system became particularly evident.
The board voted unanimously to make no further SES grants and to make changes to the existing program to make it possible to attract needed new investors and capital. The Company made an offer to purchase SES shares from employees in February 2010. Based on the study and a survey of our employees performed by an outside compensation consultant in 2010, the company adopted a cash bonus program and replaced its practice of granting equity as part of the incentive program. In addition, the company adopted a new option program and continues to make new hire grants - making all employees equity owners regardless of position.
The process of changing the employee share structure involved many difficult discussions about bringing the values of the company to life in our compensation programs and some employees were not happy with the outcome. The board and the company leadership believe it is vital to continue employee ownership and believe that the company has now embraced a sustainable solution that is consistent with our values, our need to attract investors, and the long-term financial health of our company.
We added 12 positions (with nine departures) in 2010 to finish the year with 109 full-time and two part-time employees, a two percent increase. Four interns also joined us for all or part of the year. Some community members continued to take advantage of work-from-home and flexible part-time work arrangements.
Our community continues to reflect the homogeneous nature of the populace of our home state of Vermont with only five non-white employees out of 109 associates (this is something we have not previously tracked). In 2010, our reduced recruiting and hiring efforts limited our ability to execute diversity initiatives that would shift our existing makeup. We remain committed to pursuing solutions to improve the company’s overall diversity in 2011. This includes advertising on websites that will attract a more diverse population and emphasizing our desire for diverse candidates in our search agreements with recruiting firms.
Gender equity remains a concern at the highest levels of our organization. While women comprise 58% of our company, there is only one woman among our eight vice-presidents and only one woman on our seven-member Board of Directors. 2011 is already providing opportunities to focus on bringing more women into leadership positions within the company.