The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits

by Zeynep Ton

Almost one in four American working adults has a job that pays less than a living wage. Conventional wisdom says that’s how the world has to work. Bad jobs with low wages, minimal benefits, little training, and chaotic schedules are the only way companies can keep costs down and prices low. If companies were to offer better jobs, customers would have to pay more or companies would have to make less. But in The Good Jobs Strategy , Zeynep Ton, a professor at the MIT Sloan School of Management, makes the compelling case that even in low-cost settings, leaving employees behind―with bad jobs―is a choice, not a necessity. Drawing on more than a decade of research, Ton shows how operational excellence enables companies to offer the lowest prices to customers while ensuring good jobs for their employees and superior results for their investors. Ton describes the elements of the good jobs strategy in a variety of successful companies around the world, including Southwest Airlines, UPS, Toyota, Zappos, and In-N-Out Burger. She focuses on four model retailers―Costco, Mercadona, Trader Joe’s, and QuikTrip―to demonstrate the good jobs strategy at work and reveals four choices that have transformed these companies’ high investment in workers into lower costs, higher profits, and greater customer satisfaction. Full of surprising, counterintuitive insights, the book answers questions such How can offering fewer products increase customer satisfaction? Why would having more employees than you need reduce costs and boost profits? How can companies simultaneously standardize work and empower employees? The Good Jobs Strategy outlines an invaluable blueprint for any organization that wants to pursue a sustainable competitive strategy in which everyone―employees, customers, and investors―wins.

Genres: Business, Nonfiction, Leadership, Management, Economics, Professional Development, Business Leadership

240 pages, Paperback

First published June 2, 2015

About the author

ZEYNEP TON has been a professor at MIT’s Sloan School of Management since 2011. Previously she was on the faculty of the Harvard Business School, where she was given an award for excellence in teaching in 2010.

Reviews

[Hilary · Rating 5 out of 5]

Anyone involved in business should read this, whether MBA student, startup entrepeneur, business owner, bank manager or investor. It's very readable, with clear examples drawn from 4 retailers (Costco, Trader Joe's, QuikTrip and Merca­dona) chosen as models for the "good job strategy", revealing how investing in employees may have fewer tangible or measureable benefits in the short-term but makes the long-term prospects incomparably good.

[Anne Tresansky · Rating 4 out of 5]

Interesting and believable premise. The world would be a better place if more companies followed this approach. The book was heavy on anecdotes and I felt the lack of data. As with 90% of the business nonfiction I read, I wish I had consumed this as a long form article or podcast instead of a book

[Emily Antonen · Rating 5 out of 5]

Trader Joe's and Costco are a couple examples of good jobs strategy companies. Read the book and find out how they do it, then support businesses who use this strategy, and avoid others until they comply. Here's a blueprint for a better tomorrow, which is threatening to come too late for many of us unless we all smarten up.
This strategy is the antithesis of the current standard of corporate policy, which has weakened our middle class - a level of society crucial to a stabilized government. It is a resolve for the gets-us-nowhere arguments about the economy between conservatives and liberals. Save costs and make more profits? Check. Treat people like human beings with rights and dignity and create ethical businesses that consumers need and love? Check.
Author Zeynep Ton produces research to prove that the best way for businesses to lower costs and boost profits is by investing in their employees. Offering employees a living wage right from the hiring, benefits and proper training, normalized work hours, and a positive work environment, companies discover that retention rates soar and employees enhance their services and production. Despite increased cost for HR at the beginning, studies show that well-trained healthy employees, able to maintain a decent home and family life, do a consistently greater job at work. The author logically details how costs get lowered and profits increased through the good jobs strategy. She is an adjunct associate professor at the MIT Sloan School of Management and was previously on the faculty of the Harvard Business School.

[Paco Nathan · Rating 4 out of 5]

Costco, Trader Joe's, Mercadona, etc., are all examples of companies that pay better than their competition, provide better customer experiences, and have demonstrated their resilience by being profitable over time -- even through recessions. OTOH, companies like WalMart are cited as "exemplary" for being just the opposite. Considering the factors of operational discipline, cross-training, customer and employee focus over short-term financial games, Zeynep Ton deconstructs the fallacy of the contemporary transnational corporation. She illustrates the dynamics of virtuous cycles vs. vicious cycles.

I'm not exactly a big fan of Trader Joe's, etc., given that their approach to packaging and sources has been relatively disproven by Mercadona, etc. Even so, their business strategies are a welcome respite from the utter nonsense and retardedness of a Fox News Nation.

Ton presented a talk about this at Next:Economy 2015, which drew my attention. The book itself is brief though a bit wordy: could have used some editing to make its points clearer, some portions ramble, and arguments get strewn across non-contiguous pages like airplane wreckage. It reads like an HBR article drawn out to book length -- somewhat typical for East Coast publishers. Even so, high marks.

[Paige · Rating 5 out of 5]

I initially read this in order to better inform my work and understand my organization's philosophy on workforce development. This book completely changed my perspective as a consumer, worker, supervisor, and general participant in the economy and workforce. Ton's thorough research lays out a clear argument for the profitability and general sense in offering employees good jobs at every level in every industry. An excellent blend of stats, stories, good and bad case studies, as well as general insights (I'm always interested in what's being forecast, especially around how technology and AI will influence the workplace). I don't have an MBA or any other special business or economics training but I found the tenants of this book easy to grasp and the arguments reasonable to follow.
This book is not just for chief officers, execs, or even managers. If you have any interest in making lives better for people working with and around you, pick up this book. I'm sure I'll be purchasing a copy soon and revisiting this book several times.

[Samuel A De La Paz · Rating 5 out of 5]

I found this book to be very helpful in framing how the operational decisions for an organization can greatly influence the quality of a job, especially for an industry like retail. The positively reinforcing relationship between values and operations will stick with me. It gives practical advice supported by case studies for everyone from shareholders to middle managers. I think that one aspect the author takes for granted is the genius in the business plans and marketing strategy of her examples of "good jobs employers" that allow them to make these decisions, but that is understandable given her target audience are the numerous profitable and growing companies.

[Carlos González De Cosío V · Rating 5 out of 5]

I liked it. Very insightful. Although the overall Idea extends to every business and operators. The examples are very focused on specifics industries. I will definitely read it again just because there are many good things I am extracting for my employees benefit and there fore for the company too.

[Jill · Rating 4 out of 5]

I was happy to learn that there is a way to pay retail workers a healthy, living wage AND have successful companies. In fact, as Ms. Ton points out in the book, many successful companies make taking care of their employees the cornerstone of their business strategy. Some of the companies profiled in this book are Costco, QuickTrip, Trader Joes, and Mercadona (Spanish supermarket), as well as other companies that have applied this strategy a less consistently (think original Home Depot). Taking care of employees often entails more than just paying them well. For retail, it includes providing consistent schedules, offering more full time positions to include benefits (Hobby Lobby take note--this means health insurance that covers birth control!), and empowering employees to provide meaningful jobs. This employee-investment translates into better trained employees who enhance the customer experience, creating loyalty from both the customer and the employee. That these companies often have disciplined supply chains and limited product selection is no accident. They cut costs in these areas too. But cutting product choice doesn't work if you don't have employees to explain to customers why the products on the shelves are superior to what they may have come in to purchase. I don't know how many times I've said I like shopping at Costco because they may only have one toothbrush on the shelf, but they already did the research and it is probably the best toothbrush on the market at a great price.

When I think about the cycle of immigration in the U.S., I often think our economy needs the constant stream of cheap labor to fill positions that others won't take. While this book doesn't quite provide a solution for all those jobs, it does provide a roadmap for the next tier of employers who want to increase profits by doing right by their employees. The only question I was left with was whether there are enough motivated employees available to fill positions if all companies switched to this model. We probably won't have to worry about that, but it would be nice if we could get a few more companies to move this direction.

[Lorilin · Rating 4 out of 5]

The gist of this book is innovative, but pretty simple. Ton argues that good, successful companies do two things. First, they invest in their employees, and, second, they make the following four specific operational choices: they offer fewer products, promotions, hours, etc.; they standardize common tasks (like unloading a box of product onto a shelf) but also empower employees to make decisions; they cross-train (meaning employees do many different jobs depending on customer needs in the moment); and they operate with slack (meaning they overstaff instead of understaff). And then Ton gives examples of several companies that have managed to successfully employ this "good jobs strategy."

Overall, I found this book absolutely intriguing. As a former retail employee, I especially love this idea that investing in employees and treating them with a little bit of decency can be beneficial to a company. However, with that said, I don't know if I've ever encountered a book that contained such fascinating and original information, but that delivered it in such a confusing, choppy way. It was actually difficult for me to get through parts of this book, not because I wasn't interested in what Ton was saying, but because her sentence, paragraph, and chapter structure often just didn't flow well. I found myself reading sentences over and over again in order to fully understand her point--and I couldn't help thinking after I finally understood what she was trying to say, "You know, if you just removed about half the words in that sentence and slightly rearranged what's left, you could have stated that point much more clearly."

So, unfortunately, Ton's writing style ended up being a distraction for me, but the content was so solid, I still recommend giving this book a read.

[Jay French · Rating 3 out of 5]

Focused on retail, “The Good Jobs Strategy” describes organizational strategies that lead to pleased customers. To get there, create “good jobs” instead of bad jobs. Companies providing good jobs tend to pay more, have less variety in the parts of the jobs that are drudgery, and include a lot of training. Key were limiting the number of different items to eliminate stockouts and to make managing a store easier. Another key was cross-training, so when the customers aren’t there, retailers can work on stocking or other functions. If you are not in retail, this doesn’t provide direct correlation to the jobs in your company. But you will be able to see how the basic changes in strategy could provide the same kinds of benefits to your company and your employees.

I found the examples were interesting and entertaining throughout. I have worked on a project in retail, starting a new convenience store concept that targeted QuikTrip. QuikTrip is one of the main examples in this book, and I can now see why we did things that didn’t make sense to me at the time, those many years ago, having world-class training and paying employees well. When I visited that first convenience store twenty years later, I talked to a lady that was one of the first hires, who I had opened the store up with. To stay with that job for twenty years, and to know as many customers as she knew, was a great example of how this strategy can work.

The book was a bit repetitive, but overall I enjoyed it and learned from it. (And I agreed with a lot of it - it makes sense.) Were I in a job that involved creating and implementing strategies concerning the workforce, I would have found this an excellent resource.

[C. Patrick G. Erker · Rating 3 out of 5]

Solid, if dry, book, by an author who I'd have loved to have had as a professor in business school.

Ton suggests a way for companies to better serve customers, employees, and investors through what she calls the "good jobs strategy," which combines better employee engagement and development with improved operations. She is convinced that companies can treat their people well without compromising economic returns for investors, but only if companies execute on an operational level.

How to do that? By offering less (SKU reduction), through standardization and empowerment (standardize tasks that benefit from such, while empowering employees to provide best-in-class customer service where that makes sense), by cross-training employees, so that companies can smooth customer demand and service supply, and by building in employee "slack" (having extra workers rather than too few).

The examples she gives are well-known retailers: Trader Joe's, Costco, Home Depot, for example. And Ton clearly is a thoughtful, good person with her priorities in the right place! I plan to follow her lead and try to shop at places where I know the employees are being treated well. Kudos to her for this good work. And thanks to my friend Jimmy for recommending this to me.

[Cathy Douglas · Rating 5 out of 5]

So many employers have an us-vs-them relationship with staff, and often as not with customers. This book illustrates how four retail companies have been very successful using methods and policies that treat their employees very well, bringing good results to customers and shareholders in the process. The author focuses especially on cross-training, standardization processes, empowering employees, resisting counterproductive staff cuts to address short-term cash flow problems, and engaging workers in company-wide continuous improvement efforts.

There's a bit of repetition here, but the examples and interviews chosen are excellent. Graphics and statistics are also on-point, without being overwhelming to non-specialists.

I couldn't help wishing every employer out there could learn about and, more importantly, be convinced by these methods. That's not to say they'd be easy to graft onto the systems of an existing company. I actually think my last employer might have read this book, because the company recently decided to emphasize cross training. Their system's still a little rickety, but hopefully will improve with time.

[Carter Hemphill · Rating 4 out of 5]

I got this book on special through Amazon.com as an ebook. The audiobook was quite inexpensive as well. The author gets a little too redundant and the book could have used an editor. Nevertheless, the author makes a very compelling argument that if companies focus on investing in their employees (through cross-job training and high pay) while also limiting choice, sales promotions and stock-outs, then the companies will be leaders in the cutthroat retail market. I found it interesting to learn about how effectively Quiktrip, Trader Joe's and Costco operate and how well they treat their employees. I like that the author challenges the "Walmart" approach to extreme cost-cutting that results in low employee morale, poor customer service and inventory shortages. Recommended as a good expose of the retail market and its problems.

[Rocky Sunico · Rating 4 out of 5]

I came to this book because of Scaling Up Compensation and it felt like a lot of the ideas of the book may have come from here - or at least followed the same thought. I had experienced the same thing with how the core Scaling Up book feels like it shares a lot of the same DNA as Good to Great, so here we are.

This doesn't feel as meaty as Good to Great felt and it's main focus is illustrated through the Retail industry, which makes it a little harder for someone in a different industry to immediately apply what was presented here. The research is still quite thorough and comprehensive in its own right, but it does feel like I'm not the core audience. I see how Scaling Up Compensation may have tried to make the Good Jobs Strategy more universal - or at least more aligned with the Scaling Up metholodolgy.

[Carissa Brown · Rating 5 out of 5]

The Good Jobs Strategy seems like a great strategy. Invest in employees, care about quality, and stay competitive with your prices. Many companies claim to follow the strategy and yet when you get into the upper management you realize that it is a dream or a story they tell but not an actuality. All the companies mentioned in this book that follow the strategy, I have personally heard good things about. Quik Trip which is mentioned multiple times in the book is a great place to work and they really do seem to care about their employees. Hopefully in the future we will see more companies follow their lead.

[Ed Barton · Rating 4 out of 5]

Good Jobs = Good Companies

The author uses operations management approaches to demonstrate that by providing good jobs, as defined by well paying, stable, well trained and adequately staffed team members, companies like Costco and Southwest Airlines develop and sustain advantages over the competition. The book is good, and the research sound. The lack of a 5th star is driven by the lack of concise chapter summaries after long chapters, and a fairly ineffective wraps up to the book as well. Great approach, but you’ll need to take notes to summarize it effectively yourself.

[Ty Mick · Rating 4 out of 5]

Here I'd been thinking that treating employees with dignity and respect was just a matter of humanitarian ethics, but it turns out it makes companies more profitable, too. Always nice when you can promote the good of society and be selfish at the same time.

The reason that not every company does this, then, is twofold. First, it's more difficult—you have to actually be good at business (at operations, specifically) for your investment in employees to pay off. And second, you have to sacrifice short-term gain for greater long-term gain, something humans are naturally pretty bad at.

[Alex · Rating 3 out of 5]

This book is backed up with great research and interviews with people affected by both the "Good jobs strategy" and the "Bad jobs strategy." It has a compelling point and is well laid out. My only complaint is how repetitive the book is. It literally could be cut down to half the length and everyone would still get the point. You could easily get a cliff-notes version of this book and still get everything from it. It is well written, but just get monotonous after a bit.

[Jason Girouard · Rating 5 out of 5]

Incredibly well researched and understood! Zeynep Ton analyzes QuikTrip, Mercadona, Trader Joe's, and Costco to explain the "Virtuous Cycle of Retailing" and how seeing people as an engine of sales, service, profit, and growth can lead to reinforced success for employees and companies. These lessons can be applied to retailers but also expanded to any company dealing with customers - which as far as I know is most.

[Kwang Wei Long · Rating 5 out of 5]

This book challenges the conventional thinking of cost cutting and maximizing your resources head on especially with how the business climate has changed over the years to it's present state and business management books advocating cost cutting and squeezing your employees dry.

Zeynep has shone light on a different way of doing business and still be able to succeed.
Definitely worth a read into the unconventional way of doing things.

[Boaz · Rating 4 out of 5]

Not sure who the audience is for this book (Maybe people that blame the poor on being poor? Maybe for operations managers?), but the ideas are clear and the examples are sharp.

This whole book basically says "Spoil your workers while building and enforcing high operations standards and you'll make more money in a more sustainable way". Which is another way of saying "don't be a shit manager".

But this book could be shorter, with more numbers and ideas in it.

[Michelle · Rating 4 out of 5]

A really interesting read about the retail industry and what the good companies do to get better. This doesn't quite fit in to the business that I do now, and it was a little bittersweet to listen about the downfall of Borders (a former employer), but really interesting to listen about what works and what doesn't. Plus it made me appreciate those in the retail service even more.

[Eric · Rating 5 out of 5]

Clearly defined and successfully told

I enjoyed The Good Jobs Strategy. This is a book full of great wisdom and knowledge gathered from multiple organizations and disciplines. This author was coherent and easy to follow as well. This would be a great companion for students in business schools.

[Lewis Ngugi · Rating 5 out of 5]

Retail experience shared to other industries

Kindle Unlimited suggested I read this and it's worth it! A design challenge that one company has been experiencing has the answer in this book. That answer was implemented in 1830s! Good Jobs Strategy is a great playbook for business owners and managers especially leaders.

[CESAR SANCHEZ · Rating 5 out of 5]

Opens a new window of good management practices for any bussiness and markets

I lead an engineering design group in a tech R&D; when I startered reading this book I thought all the advises won't apply to my area, after some chapter's a found myself motivated and with valuable extrategic tools very aplicable to my job. Great work on making this easy and understandable to read

[Minjung · Rating 5 out of 5]

Ton talks about business strategies made backed up with concrete examples from Trader Joe's to SouthWest Airlines. Business strategies seem intuitive and hard to implement as companies are operating in tight environments.

[Laura Carpenter · Rating 5 out of 5]

Should be a must-read for every business school student. The book has common sense recommendations that - if implemented effectively - can significantly improve quality of life for scores of people. Profits and good jobs are not mutually exclusive.

[Tony Segreto · Rating 5 out of 5]

Great overview of why good jobs for employees help company performance. Great examples and good points on how engaged employees that have autonomy and clarity in their roles increase operational performance.

[Cruz Boon Gee Wai · Rating 5 out of 5]

Great and detail analysis

After second chapter, it make me want to complete the book because of the model companies as the example. As a manager and team lead, will definitely wanted to apply whichever option that can help.

[philip armstrong · Rating 4 out of 5]

Refreshing

At a time when workers globally are struggling to make ends meet and improve their lives, the Good Jobs Strategy explains that it is possible for all three stakeholders (investors, employees, customers) to get what each wants.