By Joe Skorupa

The recent naming of the top and bottom 10 retail companies to work for has been a phenomenon among RIS readers and Web visitors, setting records for click-throughs and generating incredible readership interest. But does judging a company by how it treats employees, customers and the planet really mean it is a good or bad company? Or is this squishy logic? I think it most definitely matters, and here’s why.
 

In case you missed the two incredibly popular stores that identified the top 10 retail companies to work for and the bottom 10 retail companies to work for, click on the below links to catch up with the two biggest stories in retail today.
 

 

 

These stories will tell you everything you need to know about the study’s methodology and findings, which are contained in a report released by the Good Company as part of what it calls the Good Company Index. It will also provide you with links to review the data itself and find rankings of other companies.
 

The report, by the way, was sent to me by Gary Williams, founder and CEO of wRatings, who was one of three primary research firms tapped for the Good Companies’ report. Williams is a long-time contributor to RIS and a frequent speaker at our conferences, including the upcoming Retail Executive Summit, June 13-15 at the Grand Del Mar (San Diego area).

 

First of all, conventional wisdom tells us that companies should focus on shareholder or stakeholder value and things that distract the company from this mission weaken results. This dictum has been interpreted in retail to imply that the primary goal is to produce rising sales results, specifically per store, per week, per month and per quarter. Take your eye off this ball and you risk shareholder or stakeholder (for privately held companies) value.
 

But let’s examine the bottom 10 worst companies to work for and see how their ranking and their performance compare. Dillard’s has been a struggling company for many years, always a dollar short and a day late to the competitive marketplace, including a quirky approach to investing (or not investing) in technology. I know executives at Dillard’s and know management is furiously playing catch up, but its stock price has significantly dropped over the last six months and its ability to match the success of its peers at Macy’s and Kohl's, among others, is seriously hampered.
 

Abercrombie & Fitch is one of the most recognized names in retail and that is exactly its problem. The company is run by marketers who put brand first and everything else second. I know one CIO who spent years at Abercrombie trying to bring its IT systems into the 21st century, battling marketers for budget and the authority to make necessary changes. Also, Abercrombie prides itself on having a workforce with an average age companywide between 26 and 28 years old. When I first heard this I was stunned. My question is: What do they do with those that put in a few years on the job, get rid of them? The churn must be astounding. Abercrombie’s stock has treaded water throughout 2011, ending lower than when the year began.
 

Dick’s Sporting Goods is another company on the bottom 10 list and its stock has also ended the year lower than when it began. RadioShack has severe marketplace issues to deal with that go way beyond being a good company to work for. However, the Shack ranks poorly from this perspective as it does from the equity market perspective, where its share price has been falling over the past two years.
 

Some of the other bottom 10 companies have managed to keep their share prices rising, but their ranking as a bad company to work for will probably catch up with them unless changes are made.
 

Interestingly, there are no real surprises on the top 10 companies to work for list. Apple, of course, sets the standard. Ace Hardware works hard to keep its franchise and independent owners happy. Dell has always been a forward thinking and operating company, as have been Staples, Whole Foods, Lowe’s and Costco. All others on this list have also been strong, even Home Depot, which has been inconsistent over the past decade, but clearly has more ups than downs.
 

So, can businesses really be judged on the basis of whether it is a good company to work for or not? Although the evidence indicates they can, I’m sure many Wall Street analysts will disagree. Then again Wall Street analysts have very little credibility left these days in light of the current economic mess they created. It used to be said that Wall Street analysts were the smartest guys in the room, but now we know if that’s the case then you should leave that room immediately.