Harvard Business Review

In my mind, the reasons behind treating your employees like family go way beyond protecting the company's future. It's really about what you, as a founder, employer, manager, mentor, etc., wish to really invest yourself in. There is nothing more valuable, with a higher return, than the lives and well being of those under your care.

As a philosophy, there is nothing that will work out better financially than that of treating people with the dignity and respect you require.

The positive side-effect of that philosophy, generally, is greater success, which in many cases is a well-rounded success that permeates every aspect of your life.

Thanks for the great post.

I agree with your ideas. This is mighty hard to implement. As the results will only show up much later, so in world where each quarterly results matter, its tough to implement this.

Also only the founders have the authority to implement such ideas,not professional managers in most firms. But this is something to aspire to. Thanks for the article.

What amazes me most about the business model that Mr. Scherr embraces is the honor system that was prominent in the hey-day of my parents, and their employers.

Consistently, treating people with respect and consideration in bad times as well as the good, portrays the genuiune nature of that person. Mr. Scherr is but an example of what makes a great businessman, and a great person.

In what has turned into a money driven and selfish society, Mr. Scherr's generous heart is a rare one indeed, and we should all take lessons for our business practices and for our personal lives as well.

Great article, thanks for sharing!

Putting our people first.

Lots of people say it, few and I mean almost nobody does it. Thank you for this piece on Scott Scherr. Hooray for yet another "Good to Great" Level 5 leader - fiercely dedicated to their people, customers, and then their shareholders and yet modest about such accomplishments.

I've checked out Ultimate Software and its being high up on the lists for best places to work, best product development teams and best return on investment.

In these difficult times it is very uplifting to come upon leaders who have:

-the Wisdome to know what's important and the right thing to do
-the Integrity to do what they say they'll do
-the Character to stand up to those who don't do what's right
-the Courage to stop those who won't do what's right

Hey Scott, want to buy a very used country? I think I know of one that is looking more and more as if it's up for grabs.

I totally agree with the idea with treating your employees as afamily.
My experience with my staff in the department where I was head for ten years confirms what this programme could achieve. It was easy for me to get my staff to work at any time and under every condition favourable and unfavourable because they knew that it was their family affair not just work for earning money.
Their needs were attended to as and when due and their interest were protected.
The benefits to the establishment was amazing.

E. Iwoketok

Mr. Scherr is practicing servant leadership in his company by taking his role as steward of the company's resources. Mr. Scherr wants to serve because in the process of taking care of his people they grow and become better persons (wiser, healthier, more productive). The whole society benefits - both the business and the employees.
To many managers today - especially in today's economy - people's needs being met is of last concern. Their question - "What can you do for me?" is diametrically opposed to the "What could I do for you?" question asked by servant-leaders.

The company where I work really cares for its employees.

We have this calendar up with everyone's birthdays and special days on it and they get you a cake and give you off for a birthday holiday. They even throw baby showers.

We have play Nerf Assassin and Office Olympics to help raise money for the American Heart Association.

We have awesome health benefits, gym reimbursements, Run at Work Day, and robot pens.

So many people have said they feel blessed to be here, and I'm one of them.

It must be working not only were the company was nominated as the 303rd fastest growing privately held company in the US and the 38th fastest growing company offering business services by Inc. 500.

There is so much power in this concept, because unlike family, employees choose their employer and create the fabric of the work environment.

I often remind myself and others of the keys to employee engagement, one of which is feeling that someone cares for them at work. In our current state, this is one of our most powerful tools.

Many times during my career as an executive at big companies I heard managers, leaders, CEO’s and particularly HR people saying this “family” thing.
I have to admit that it has always sound like demagogy to my ears... For me it was clear: work is work, family is family. Especially because very often this “family feeling” demanded my vacations, my weekends for workshops, my comprehension on not had been promoted that year as promised, and so far. Also there was no family feeling among competitive colleagues…. Therefore, from my employee perspective, this issue was always taken as a demagogic speech.
Now I have my own business and never thought about this from a founder perspective. It makes sense and I do treat the team more or less like family…. Not using these words, but certainly sharing Mr. Scheer overall proposal.
However, a tip: don’t talk “family” too much. Do “family”!
There’s no space for the “family speech” anymore….. But the real “family attitude” is lacking and this is maybe the biggest opportunity!!
Thanks for the post! Brilliant!

Whoa Whoa Whoa. If you think “treating employees like family” is a good strategy consider that very few people can pull that approach off with much finesse. Treating people like a family promotes more patriarchy in an organization. If you drive your performance with patriarchy you can literally sap the sense of urgency from a team. You teach them they can’t think and they can’t act without first checking with “daddy”. That limits the ability to grow an organization and feeds the narcissistic proclivities of most entrepreneurial CEO.

Patriarchy is the root of entitlement. Entitlement is a “virus” that is most noticeable in companies where leadership seems to be giving everything they can think of to keep their employees satisfied and remain with the company. As a result employees gravitate to demanding more and expecting more from the employment relationship and appear to withhold their commitment and performance if they don't get it. Entitlement keeps you, your employees and your company small and unable to meet the challenges of competition and growth.

Peter Block in his transformational book ‘Stewardship’ states, “At the heart of entitlement is the belief that employee’s needs are more important than the business”.

Having been through the eye of the needle of dealing with a downturn in business myself, and wanting to keep my employees at any cost, depending on the close familial relationships with employees was a double edged sword. When you relate to your employees as if they are your family it becomes nearly impossible to hold them accountable. It creates a bad precedent for getting important work done in the future. Maybe not with current employees but just wait until others join and realize this is a place where you don’t really have to work very hard.

I suspect that there was way more involved in the achievement of a Best Company award than treating employees like family. I promise you there was.

Isn’t it a shame that we have to speak of companies like this one as an exception rather than the rule?

Many years ago I read something I never forgot; "So many laws and no ammendment to the ten commandements". Far from being a religious person, what made such a strong impression on me was that I suddenly realized that, save for the first one, those commandments have to do with our relations with each other. Companies should treat their employees for what they are: human beings. In fact, this is all we should do in daily life if we really want to survive as a species.

I want to work for Ultimate Software, or I want all governments to pass bills that make other companies behave like Ultimate Software :D

I agree with Mark Goulston, that integrity is the basis of all business decisions, and not only that but life as well. Diane Levinton posted a reference to the 10 Commandments and I've refined them dowm to one....do the right thing. This rule covers every eventuality, no matter the "details". Good post.

The adage of treating like "family" feels dangerous because of the presuppositions that vary between one and anothers expecation of "family". I highly advise against using any reference to family. Buyer beware if clear expectations of "family" are not defined as varied presuppositions potentially translate into a spectrum of productive or potentially dysfunctional situations and behaviors. Although I believe in what I feel the spirit of being treated as family represents, I never make that reference. I attempt to relate a clear set of expectations and "rules of engagement" whereby supervisors and the company's business practices are there to facilitate the company strategy and goals but with a culture that supports the growth and development of employees in parallel with company growth. This means that when the company makes the committment to make someone an employee it will do so with a level of flexiblity, creativitiy and capacity to find an appropriate place for an individual within the company that can change from time to time with company and individuals needs in a reciprocating manner. The key word being reciprocating. The more reciprocating an employee to adjusting to company needs,the more creative flexibility I seem to find capacity for. From my perspective, being treated like "family" is more related to a choice in employee behavior rather than an entitlement of employment.

R. Joseph

Fully agree the article, it applies to whichever types of business. Business at the end of the day is driven by people, not about money, technology, model, systems etc... We respect the poeple means we respect their task, and our busines in return.

Brian FUNG

I'm hoping Jon is kidding when he implies that the government could pass rules to achieve such a collaborative and effective state. Mark Goulston pretty much said it all. I've seen it work, lived it, and understand the difficulty in maintaining it over the long haul. It comes down to balance, leadership, and a winning culture. At the recent Spur Leadership Conference in Austin TX, Mac Richards told a story about a man who once told him, "Mac, I love you, and I will fire you." He referenced the delicate and necessary balance of caring deeply about the people and the business simultaneously. If nothing else, leadership is about balance. To Dan Prosser I would agree that entitlement is a virus, however its roots extend far past the workplace. If you want people to bring their heart and soul to work, you had better care about their heart and soul. You can't fake it, and it cannot be an event. This type of leadership must be the real deal every day.