Imagine working in an organization where employee morale is low, turnover is high, and the costs of hiring are astronomical. If that were the case, you’d imagine such affected employers do whatever they can to find, attract, and retain quality employees. But you couple this goal with the reality of the economic picture—you simply cannot throw good money at employees who will jump ship for an extra $1,000. You recognize that statistics say that 41 percent of all employees have no loyalty to their employers and will move on if a better offer comes. What a dilemma.

These issues clearly are a concern for organizations like Genentech or Zappos. But they don’t fret over them. That’s because they have found that treating employees with respect, and giving them such things as bonuses, rewards for longevity, on-site child care, on-site lunches, and sending employees home with prepared dinners works. 

Genentech is a California company that “develops and produces drugs that cure diseases,” according to the company Web site. Genentech celebrated its eleventh year on Fortune’s “Best Places to Work” list in 2009. The primary reasons for this recognition are the important work that they do and the strong company culture that values equality and communication, but any discussion of how great Genentech is always circles back to benefits that show a real respect for employees. In addition to traditional benefits like retirement and health care, they provide family-friendly perks such as unlimited sick leave, personal concierge service, flexible work scheduling, childcare, nursing mother’s rooms, onsite nurses, adoption assistance, and company sponsored family events. The list of innovative benefits goes on to include unusual benefits like pet insurance, free snacks, and paid six week sabbaticals every six years!69 Zappos, the online shoe retailer, takes life a little less seriously than Genentech with perks to match their fun-loving culture like pajama parties, nap rooms, regular happy hours, and a full-time life coach Have these benefits worked for Genentech and Zappos? If you translate longevity to morale and loyalty, you’d say they have. Both boast low turnover rates and high employee ratings for satisfaction.

Questions: 

1. Describe the importance of employee benefits as a strategic component of fulfilling the goals of HRM at Genentech and Zappos. 

2. Explain how Genentech and Zappos use employee benefits as a motivating tool. 

3. Do you believe the incentive benefits such as those offered at Genentech and Zappos can be used in other organizations? Why or why not?