Published August 10, 2012
| 24/7 Wall St.
Companies often tout their workplaces as an inviting environment for employees. Yet many are far from it, and employees at many of America’s largest corporations dislike, or even hate, their jobs. With some of these companies in deep trouble, having disgruntled employees makes improving their operations that much harder. Or, some might say, it is their bad relationship with employees that caused some of their problems in the first place.
Often, however, a combination of perceived low pay, disillusionment with management decisions and a dysfunctional culture that values making money over customer service creates unhappy employees at some of America’s best-known corporations. Running a company with dissatisfied workers is hard enough, but the problems are compounded further as the companies find it difficult to hire new, skilled workers when the opinions of current employees are so harsh.
In order to identify America’s worst companies to work for, 24/7 Wall St. examined employee reviews at online job site Glassdoor. To be considered, companies had to have a minimum of 300 reviews. Of the 202 companies that made the initial screen, the company reviews were mixed, with few receiving high scores, few receiving low scores, and the majority of companies getting mediocre scores. Glassdoor’s employee reviews rate the companies on a scale of one to five. Based on these ratings, 24/7 Wall St. identified the 11 publicly traded companies that received the worst scores — a score of 2.7 or lower, putting them in the bottom 10% of the 202 companies we measured.
Nearly all of the companies that received the lowest scores are either in retail or regularly communicate with customers through relatively low-paid workers. And the terrible relationship these companies have with their employees often extends to their clientele as well. Most of the companies on this list are in industries that do poorly on customer satisfaction surveys, including satellite TV, retail and banking. Sears and Dish Network, for example, received among the worst ratings in their sector on the American Customer Satisfaction Index, and RadioShack was listed on MSN’s 2011 Customer Service Hall of Shame.
24/7 Wall St. also looked at the complaints the employees had against the companies to find common trends. By far, disgruntled employees often felt they were not paid enough for their services. This was the case with each of the worst companies. Many workers also believed that promotions were rare, and raises — when they did come — were extremely low. One Bank of New York Mellon employee complained: “In terms of advancement, you’re really limited on mobility outside of the division unless you have a lot of connections. Pay is well below street levels.”
Among the customer-facing companies on the list, another common complaint dealt with company policy strongly emphasizing sales at all costs, frequently at the expense of customer service. This often involved using extremely hard-to-meet performance metrics, such as hourly sales quotas. One complaint from a Dillard’s sales representative read: “A culture of intense, even savage competition amongst employees to fulfill impossible sales quotas and SPH (sales-per-hour) goals that lead to much bad blood and even outright hostility.”
Other common complaints included rude and inconsiderate management, poor training, awful hours — including being required to work holidays — and general mistreatment of employees.
Low employee satisfaction, we first believed, was strictly a function of low pay, long hours and handling large number of customers. But Samantha Zupan of Glassdoor explained that was not a fair way to approach the data. “Customer service is not easy,” she said. “But one size does not fit all. Workers at retailers like Nordstrom and Costco have high work satisfaction.” At these retailers, “It is important for management to connect with employees. Workers get to see management’s values.”
If “connection” with management is a hallmark of employee satisfaction, it is easy to see why workers are n0t satisfied at some of the companies on this list. Some of the corporations, like Hewlett-Packard and Sears Holdings, have had repeated turnover in their corner offices. Notably, almost all of the CEOs of the companies on our list get very low ratings from employees as well.
Another factor shared by many of the companies on this list is the perception that they have been bulldozed into the ground by competitors. RadioShack falls into that category. So do OfficeMax and Dish, which have been overwhelmed by large numbers of rivals.
Finally, most readers will not find the majority of the companies on this list a surprise. Most have been hurt by poor brand perception, years of layoffs, poor sales, bad public relations and falling stock prices. Whatever else may have caused the workers at to turn against their employers, public opinion has not helped.
24/7 Wall St. identified the worst companies to work for based on an analysis of company reviews by Glassdoor. We considered the 202 companies on Glassdoor with 300 reviews or more, and identified those that received scores of 2.7 or less. Of the 19 companies that received these low scores, we examined the 11 publicly traded ones. Sears and Kmart, wholly owned subsidiaries of Sears Holdings, were treated as one entity for the purposes of this article. Glassdoor has reviews for 191,081 companies on its site with an average score of 3.1 and a median score of 3. For the 202 companies we examined with at least 300 reviews, the mean score was 3.16, while the median was 3.2.
These are America’s worst companies to work for.
11. Bank of New York Mellon
> Rating: 2.7
> Number of reviews: 307
> CEO approval rating: 63% for Gerald Hassell
> One-year stock price change: up 7%
> Employees: 47,800
Bank of New York Mellon Corp. (NYSE: BK) was formed by a 2007 merger between Mellon Financial Corporation and The Bank of New York Company. The financial firm controls $27.1 trillion in assets under custody or administration and $1.3 trillion under management. The bank laid off 1,500 people last year as part of expense reductions that have hit most large national financial firms.
Of course, one of the bank’s major concerns has to be customer satisfaction, so employee satisfaction is critical. According to Morningstar, “Client retention has been excellent so far following the merger. But client dissatisfaction can take time to build, and BNY Mellon could face an exodus if it loses its focus on customer satisfaction.”
Reviews describe Mellon as a sleepy bank. While you can work “9:45am to 4:45pm job with 1 hour lunch break,” salary is described as “well below street levels.” Limited advancement or recognition for a job well done was regularly referenced. If you “don’t like salary hikes and bonuses and promotions on merit and hard work this is the perfect place for you,” quipped one reviewer.
> Rating: 2.7
> Number of reviews: 416
> CEO approval rating: 32% for J. Paul Raines
> One-year price change: down 21%
> Employees: 17,000
GameStop Corp. (NYSE: GME) has 6,683 company-operated stores in 15 countries around the world. The company primarily sells used video game hardware and software. But its business model has come under pressure as more and more of these products are delivered over broadband or fast wireless. Like Blockbuster before it, GameStop has a huge number of bricks-and-mortar locations to maintain in an industry that has moved substantially to digital platforms. And GameStop’s own digital game distribution platform is small compared to the balance of its operations.
Employees appear to regularly complain that the company privileges sales above customer service. According to one review, “Priority is placed on sales instead of games and customers, pushing people to pre-order games can place them in a situation where they spend good money on a bad game with no possibility of a refund, business’ models place customers at a disadvantage.” It may also be the reason why the video game retailer made the Consumer Report’s annual “naughty” list for bad customer service in 2011. Likely adding to poor customer service, reviews point to high turnover.
9. Rite Aid
> Rating: 2.7
> Number of reviews: 328
> CEO approval rating: 31% for John T. Standley
> One-year stock price change: up 3%
> Employees: about 91,000
The mammoth drugstore chain, which operates about 4,700 stores in 31 states, was built in part through a series of mergers and consolidations, including Thrifty PayLess and Brooks/Eckerd Stores. The integration process was messy and cost the company money, and probably some good will among its employees. Worker animosity likely was compounded by claims by employees in California who brought a class action lawsuit against the company for failure to pay overtime. The suit was settled in 2009 for $6.9 million.
Reviews suggest that employees think Rite Aid Corp. (NYSE: RAD) remains poorly run. Reviewers repeatedly suggested that managers did not know what they were doing because they are not “given clear directions on what they should be doing.” Reviewers also consistently objected to “mandatory overtime” and “working holidays.”
> Rating: 2.7
> Number of reviews: 4,112
> CEO approval rating: 82% for Meg Whitman
> One-year stock change: down 38%
> Employees: 349,600
Hewlett-Packard Co. (NYSE: HPQ) has been through more management turmoil than any large company in the United States over the past two years. In 2010, former CEO Mark Hurd was forced out after an inappropriate relationship with an HP contractor. He was replaced by Leo Apotheker who lasted only 11 months. Meg Whitman, highly regarded from her time as CEO of eBay (NASDAQ: EBAY), is the new chief executive. And based on the Glassdoor CEO rating, Whitman is well-regarded. This may be because of her sterling reputation and the belief that she can get one of the world’s largest tech companies back on track. In the meantime, the human cost of the turnaround is high. Whitman said HP would eliminate 27,000 jobs.
Given the company’s track record, it’s not surprising that employees are fed up. Reviewers consistently pointed to the company’s poor performance and management’s failings. One review simply read, “Advice to Senior Management — Please make up your mind what we want to do, where we want to compete.” Reviews also complained that layoffs will not solve the company’s problems.
7. Robert Half International
> Rating: 2.7
> Number of reviews: 349
> CEO approval rating: 55% for Max Messmer Jr.
> One-year stock price change: up 18%
> Employees: 11,300 full-time
Robert Half International Inc. (NYSE: RHI) is made up of seven divisions, including Accountemps and Robert Half Management Resources, which supply a full-time and part-time works and consultants to businesses. It is possible that with such a large number of employees “coming and going” as part of the company’s operations the opinions of these workers would be different from those at corporations that are not in the temporary work sector. Robert Half does stand out among the companies on the “worst places to work” list. It is neither a retailer nor a tech provider. The extent to which its temp business affects worker opinion is hard to say, but it cannot be ignored as a factor.
Reviewers suggested that the amount temps are paid is undercut by the amount Robert Half takes out of each paycheck. “Pay is below what you can earn in similar sales roles, considering how much you are charging your clients. They want to make a huge margin making it impossible to be competitive with pay for placements.” A number of reviewers also said that the company’s focus on “activity metrics” and “growth expectations” over “team morale” created a “hostile work environment.”
6. Sears Holdings (Sears/KMart)
> Rating: 2.6/2.5
> Number of reviews: 947/376
> CEO approval rating: 30% for Louis J. D’Ambrosio
> One-year stock price change: down 19%
> Employees: 293,000
Sears, its stablemate K-Mart and several small divisions do business through 2,172 full-line stores and 1,338 specialty retail stores in the United States. Sears Holdings Corp. (NASDAQ: SHLD), which is controlled by fund manager Eddie Lampert, holds all these. Lampert recently was given a black eye by the press as he bought a $40 million home on Indian Creek Island, north of Miami. The purchase was made about the same time as Sears made the decision to sell 1,200 stores and close another 173.
Sears Holdings has been through several CEOs since Lampert formed it via a merger of Sears and K-Mart in 2005. Lou D’Ambrosio was made chief executive in February 2011, replacing long-time interim CEO W. Bruce Johnson. The CEO shuffle has not ended years of failures at Sears as it has struggled against other large chains, particularly Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT).
Customers will not be surprised to hear that Sears employees think the company’s “ancient systems” are in desperate need of repair. In addition to aging infrastructure, retail workers at both companies are unhappy with compensation. Sears employees consistently pointed to low starting salary and even lower annual raises. Kmart employees complained they cannot get enough pay as they are limited to fewer than 32 hours a week with shifts only “four to six hours long.” In 2011, Sears’ American Customer Satisfaction Index score was a 76 out of 100. Among all department stores and discount retailers, only Walmart received a lower score.
> Rating: 2.6
> Number of reviews: 360
> CEO approval rating: 39% for Ravi K. Saligram
> One-year stock price change: down 12%
> Employees: 29,000
OfficeMax Inc. (NYSE: OMX) operates 978 stores in the United States and Mexico. It may be in the most brutally competitive segment of the retail market. Among the three main office supply retailers, including Office Depot Inc. (NYSE: ODP) and Staples Inc. (NASDAQ: SPLS), OfficeMax is the smallest. And OfficeMax runs on margins that are razor thin.
In the past quarter, revenue was $1.6 billion, a decrease of 2.7% from the second quarter of 2011. OfficeMax reported net income of only $10.7 million, compared to a net loss of $3.0 million in the same period a year ago. Oddly enough, when OfficeMax announced earnings, the company said its board of directors reinstated the payment of quarterly cash dividends on the company’s common stock, “given progress in executing its strategic plan to achieve sustainable, profitable growth.” Nothing in its recent past would make that goal appear attainable.
Retail workers on this list frequently indicated that they were treated poorly by management. OfficeMax reviewers were no different, with one suggesting that the company should “learn to treat employees with respect and pay them better than minimum wage and maybe they will stick around.” In addition to inadequate pay, several reviewers complained that they were micromanaged.
> Rating: 2.6
> Number of reviews: 401
> CEO approval rating: 43% for Mark P. Frissora
> One-year stock price change: up 14%
> Employees: 23,900
Hertz Global Holdings Inc. (NYSE: HTZ) operates a rental fleet of approximately 355,500 cars in the United States. The business is among the most competitive in America. Hertz is up against Avis Budget Group Inc. (NASDAQ: CAR), Dollar Thrifty Automotive Group Inc. (NYSE: DTG), Enterprise and ZipCar Inc. (NASDAQ: ZIP), in addition to a large number of smaller operations.
Hertz’s second quarter was a good one, with revenue of $2.2 billion, an increase of 7.4% year-over-year. But Hertz remains the largest company in its industry with roughly 8,700 corporate and licensee locations in nearly 150 countries. Despite its size, the company continues to be under relentless competitive pressure. Both revenue and net income were smaller in 2011 than they were as recently as 2007.
Hertz employees regularly complained that the company’s upper management is out of touch, citing unrealistic business goals that require course changes and waste time. One review read, “Upper management has little field experience and lots of MBA’s that tell you the impossible is possible.” While the company requires that all new managers have at least a bachelor’s degree, they all have to start at the bottom in the “Management Trainee” program. The relatively low hourly pay and menial jobs rubbed some recent grads the wrong way.
> Rating: 2.4
> Number of reviews: 560
> CEO approval rating: 32% for James F. Gooch
> One-year stock price change: down 78%
> Employees: 34,000
RadioShack Corp. (NYSE: RSH) operates about 4,700 retail stores under the RadioShack brand name in the United States and about 1,500 Target Mobile centers. The retailer has had almost no success as it has labored to compete with larger rival Best Buy Co. Inc. (NYSE: BBY) and a number of other retailers that have consumer electronics departments. In the past few years, RadioShack’s largest problem probably has been the rise of Amazon.com Inc. (NASDAQ: AMZN) as a huge e-commerce vendor of electronics.
RadioShack’s trouble has taken an ongoing financial toll. Last quarter it lost $21 million and suspended its dividend to save money. On July 30, 2012, Standard & Poor’s Ratings Services lowered its corporate credit and senior unsecured debt ratings to B- from B+.
Reviewers were consistently unhappy about the retailer’s sales commission structure and the long hours. Like several companies on the list, reviews indicated that the company limits commissions to certain products, instead of paying based on sales. “Over the years compensation has turned into a big joke. You MUST perform in all metrics (service plans, batteries, cell phones, etc) to get any sort of bonus as an associate.” The focus on sales has not done its customer service image any favors. Consumer Reports gave RadioShack a “naughty” spot on its 2011 Naughty & Nice Holiday List, noting that the company has openly acknowledged setting different prices for the same products.
> Rating: 2.4
> Number of reviews: 363
> CEO approval rating: 22% for William Dillard II
> One-year stock price change: up 43%
> Employees: 30,000
Dillard’s Inc. (NYSE: DDS) operates more than 300 retail department stores, mostly in the Southwest, Southeast and Midwest. While revenue has dropped for a number of years, recently Dillard’s has done very well, despite competition from other mid-tier retailers.
Dillard’s largest problem with employees may be CEO William Dillard II, who is part of the founding family. His CEO approval rating in the Glassdoor research is an extremely low 21%. The Dillard family owns 99.4% of the corporation’s voting shares, according to the company’s proxy. Bill has family with him at the top of the company. Alex Dillard is president of Dillard’s. Mike Dillard is an executive vice-president of the company. The three have made more than $51 million as company officers over the 2009 to 2011 period.
Like many of the retailers on this list, Dillard’s employees regularly pointed to the company’s unattractive sales incentives. One representative review indicated that high turnover was the result of employees being paid on the number of sales made per hour instead of based on a commission. “People either ended up quitting before their review or being fired randomly one day because of their sales.”
1. Dish Network
> Rating: 2.2
> Number of reviews: 346
> CEO approval rating: 32% for Joseph Clayton
> One-year stock price change: up 37%
> Employees: 34,000
Dish Network Corp. (NASDAQ: DISH) employees have the overwhelming task of managing more than 14 million subscribers. And Dish management has to be worried about its relationship with customers. It has been losing subscribers in an industry that includes streaming providers like Netflix (NASDAQ: NFLX), cable companies and telecoms, which have introduced fiber to the home. Customers at Dish are also likely to be upset because of battles between the network providers and the satellite company over carriage fees. AMC was recently off the Dish system for over a month.
Many reviewers objected to the company’s long hours and no holidays. “You work all day all night. Your day starts from 6:45am till 6pm or 10pm You work every holiday that your day falls on.” It is no surprise then that reviewers suggested employees were unhappy with management, citing “mandatory overtime” and “no flexibility” with schedule. Perhaps the dissatisfaction of employees is affecting customer satisfaction. MSN Money awarded Dish a spot in its 2012 Customer Service Hall of Shame, noting that Dish’s customers did not like that the broadcaster had dropped channels and seemed to prioritize sales over quality service.