Balancing Act / The ultimate value of making employees happy

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Inside South Florida's Ultimate Software, where there's an indoor basketball court and smiling workers, you could ask the question: Is the company successful because its employees are happy or are they happy because the company is successful?

Ultimate has been a rapid climber on Fortune's List of 100 Best Companies to Work For, 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.

Experts are discovering the connection between happy workers and higher profits is about more than benefits.

Ultimate, a developer of people management software, offers perks most companies would call impossible. For instance, it covers 100 percent of health insurance for employees, their families and same-sex partners. CEO Scott Scherr says perk alone costs Ultimate more than $25 million a year.

Leslie Caccamese, senior strategic marketing manager at Great Place to Work, which compiles the Fortune list, discovered that generous perks alone don't mean workers are happy or will work harder. "Engagement" comes from creating high-trust workplaces.

Clearly, trust in leadership has been critical to the culture at Ultimate Software. Even during the worst of times at Ultimate, when the stock price plunged to $2 a share and competitors were engaged in layoffs, Mr. Scherr refused to go that route. Employee benefits remained, too, and the company looked elsewhere to cut costs and strategized new ways to make money.

In return, Ultimate employees are asked and expected to make work/life sacrifices. "The idea is we take care of their family and it is their job to take care of our family," Mr. Scherr explains.

Employees don't seem to mind the work/life sacrifices. Mr. Scherr says the company has only 8 percent turnover -- 4 percent of it is voluntary.


Cindy Krischer Goodman:


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