By David Creelman

Disney and FedEx have reason to be proud. They were the only two Fortune 100 companies to get a “Good” rating in Laurie Bassi’s new book Good Company (co-authored with Ed Frauenheim, and Dan McMurrer.) They earned this rating by treating employees, customers and society (including the environment) well.

However, too many companies fall far below the standards of good behaviour those two firms set. Sixteen of the Fortune 100 including Prudential Financial and ExxonMobil get grades of D or F.

Is this an HR matter? Yes, and not just because of the ‘good employer’ element of the score. HR plays a big role in creating good companies; and it is a role HR should take to heart.

HR’s Role
HR’s first concern about whether their firm rates high or low on Bassi’s “Good Company” scale is the impact it has on the employment brand. People want to work for companies that are seen to be good. And it is not just the ‘good employer’ rating that matters: no one enjoys working for a company that is seen as ripping off customers or harming the environment. HR has a legitimate reason to ask the company to take care of its reputation, because failure to do so makes it harder to attract and retain talent. HR has a duty to bring this cost to the CEO’s attention.

HR’s second role is to take personal responsibility for the good employer rating. It should be a matter of professional pride to create a good workplace. HR does not hold all the cards, of course, because decisions by the CEO and actions of individual managers have a direct impact on whether the company is a good place to work. But it is HR’s role to persuade management that treating people well matters. If management is not persuaded, then HR should not give up; it should try harder.

The third role is to recognize that almost everything that an organization does wrong, whether it is overcharging customers or illegally dumping chemicals, has its roots in the culture and reward system. If a company is getting poor ratings on how it treats customers and the environment it may not be HR’s fault, but HR certainly can be part of the solution.

Goodness Matters to Results
One point Bassi stresses is that there is compelling evidence that companies that do good, outperform those who do harm. Clearly we expect there is reciprocal causality where doing good causes good performance and at the same time companies who are performing well have more resources to enable them to do good. This complexity aside, we do not need to argue that “we should be good despite the significant cost of doing so”; but that we should do good not only for its own sake, but because it will probably lead to better results.

How Bassi Rated Employment Practices
One technical point worth noting is how Bassi rated whether someone was a good employer. Normally, it is hard to get reliable data on whether or not an organization is a good place to work, but that is changing.  Glassdoor.com invites employees to submit information about their company to the website, where it becomes publically available. This was the one place Bassi could get data on almost all of the Fortune 100 firms.

No longer can companies hide behind the walls of their office tower. If it is a lousy place to work that information will make its way on to Glassdoor. At the same time if it is a good place to work that too will be reported. This transparency is something organizations will have to get used to. A good image will no longer be the result of a good public relations effort; it will be the result of average people using social media to report on their real experiences with the company.

Goodness Around the World
Bassi is an American and only rated American companies. However, her approach could work in any country where a few dedicated and smart people want to raise the bar of goodness among local companies. Digging up relevant information can be hard work, but anything we can do to make companies better is a worthy endeavour.

David Creelman is CEO of Creelman Research, providing writing, research and speaking on human-capital management. He works with a variety of academics, think tanks, consultancies and HR vendors in Canada, the U.S., Japan, Europe and China. He can be reached at dcreelman@creelmanresearch.com