With the shift in consumer shopping toward online retailers such as Amazon, big box retailers are struggling, with well-known names including Toys R Us, Radioshack, and Sports Authority declaring bankruptcy. There are those who buck this trend, though. Recreational Equipment Inc., or REI, the seller of outdoor clothing and gear with nearly 15,000 employees and over 160 stores around the United States in 2019, is still going strong. The company has been among Fortune magazine's top 100 companies to work for 23 years in a row and boasts a modest overall turnover rate of 37% in an industry plagued with retention issues. How does the company survive the rough terrain of retail industry while keeping and engaging its employees? To answer this question, it helps to understand REI's structure and mission. Having owners understand customers is a boon for all businesses, but in REI's case, customers are the owners.
In 1938, Lloyd and Mary Anderson started the company to help outdoor enthusiasts shop for gear more easily. The company is organized as a cooperative (or co-op), which means that it is owned by its customers. In other words, REI is owned by its 19 million customers who share a passion around the outdoors.
The company's CEO Eric Artz defines REI as an organization driven by a mission "to awaken a lifelong love for the outdoors, for all." This purpose allows the company to focus its energies and resources on goals and problems its employees and customers care about. For example, since 2016, the company has given back 70% of its profits to causes supporting access to the outdoors and protection of public lands. In 2018, the company went one step further and released a set of environmental standards its suppliers would need to follow in order to have their products in REI stores. For example, suppliers need to ensure that their products do not contain certain chemicals known to harm the environment, and they have to ensure that their supplier network follows a code of conduct as part of manufacturing.
REI's core passion around connecting individuals to nature also is infused into its employee management practices. For example, employees are given two Yay-days a year, which allows them to spend the day outdoors. They simply need to hand in their certificate to their manager and tell them what they will be doing instead of coming to work that day. The company also made the news with its #optoutside movement. The company closed all stores on Black Friday (the day after Thanksgiving, which is a major shopping day when many retailers offer unusually long hours) and encouraged employees and customers to spend the day outside.
REI gives employees voice and aims to build a sense of community. In their online platform "campfire," employees have the ability to speak up and engage in debates about issues important to them. The year after the platform launched, 40% of REI employees had logged into the system.
They also hold "town hall" meetings where employees are encouraged to ask questions, get informed, and let management know what issues concern them. REI's compensation practices support the sense of community as well. In addition to bonuses for individual goal achievement, individuals get bonuses based on reaching departmental and organizational goals. The company also utilizes a profit-sharing program where employees receive up to 10% discretionary funding toward their retirement plans based on company profitability.

Questions

1. What connection can you see between REI being a purpose-driven organization and employee motivation?
2. Do you believe that Yay Day and #optoutside are practices other retailers can and should embrace? Why or why not?

3. In your view, what are the motivational advantages and disadvantages of tying employee compensation to company profitability and departmental performance?
4. In your view, are all employees interested in finding meaning at work? How can organizations ensure that employees get a sense of meaning if the organization is not "purpose driven”?
5. What is the role of giving employees voice in employee motivation?

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