Examine the Web pages of a sample of companies that were created within the last 15 years or so. Inc Magazine, for instance, is a good source to identify these companies. Try to draw more conclusions about similarities and differences, if any, in HR policies and practices across these companies. Also, try to determine the extent to which these firms see human resource management as a source of competitive advantage

How to Create an Employee Friendly Culture and Use it as a Source of Competitive Advantage

The year was 1999, and Zappos’ founder Nick Swinmurn was walking around a mall in San Francisco, looking for a pair of shoes. One store had the right style but not the right color. Another store had the right color but not the right size. Nick spent the next hour in the mall, walking from store to store, and finally went home empty-handed and frustrated.

At home, Nick tried looking for his shoes online and was again unsuccessful. Although there were a lot of mom-and-pop stores selling shoes online, what was interesting to Nick was that there was no major online retailer that specialized in shoes. So Nick decided to quit his day job and start an online shoe retailer... and Zappos.com was born! He named the company Zappos, a short form of the Spanish word zapatos, meaning “shoes.” While Zappos did almost nothing in sales at the beginning, and its future looked bleak when most dot.com firms disappeared about a decade ago, the tiny company eventually became a big success story. By 2009, Zappos was grossing over $1 billion and was purchased by Amazon in a deal that was worth $1.2 billion. Zappos’ employees received $40 million in cash and stocks.

Zappos’ CEO Tony Hsieh notes that “his entire business revolves around happiness” and Inc. Magazine in 2010 declared Zappos as “the most employee friendly business out there.” According to Inc. Magazine: “Zappo’s approach to workplace bliss differs significantly from that of other employee-friendly businesses. For one thing, Zappos pays salaries that are often below market rates—the average hourly worker makes just over $23,000 a year. Though the company covers 100 percent of health care costs, employees are not offered perks found at many companies, such as on-site child care, tuition reimbursement, and a 401(k) match. Zappos does offer free food to its employees, but the pile of cold cuts in the small cafeteria loses its allure faster than you can say Googleplex. Instead of buying his employees’ loyalty, Hsieh has managed to design a corporate culture that challenges our conception of that tired phrase.”

All Zappos’ employees, regardless of position, are required to undergo a four-week customer loyalty training course, which includes at least two weeks of talking on the phone with customers in the call center at full salary. After a week of training, the new employees are offered $3,000 to leave the company immediately if they wish, no strings attached. This is to ensure people are there for the love of the job and not the money. Over 97 percent turn down the buyout.

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