November 05, 2004

Would You Invest?

THE ASSOCIATED PRESS recently published a rather fun story, about a Virginia-based telecom firm which only serves vegetarian food to its workers.

The upshot to this idea is that the food is free, which is a great perk; plus, making workers healthier cuts down on medical costs. But the downside is that the company's vegan chief executive, who mandated the cafeteria, has not apparently properly impressed upon his workers the benefits this provides:

"They have this thing called 'soyberry steak' instead of Salisbury steak," says Michaela Goodman, a 19-year-old customer service staffer, while delicately picking at a plate of corn and coleslaw.

"It just didn't seem right. The fake meat stuff is not for me. I tried the nachos, though, and that looked about the same. It was pretty good."

As she ate, workers filtered in and refilled soft drinks or nibbled on the cake. A few stopped in front of the platters of sloppy joes, potato soup, lima beans and fried potato wedges.

Ginger Hinkley, 33, was more practical about her salad: "I'm not one of those veggies, but it's free. Where else could you work and they'd actually give you free food?"

A few disgruntled employees called a local television station to complain about not being able to bring meat into the Vegeteria. But (CEO Norm) Mason says they still can eat meat -- they just have to take it into another company room. Or they could go out for lunch.

CEO Mason's take on the matter is as follows:

Mason says he created the "Vegeteria" out of concern for the well-being of his 200 employees of Cat Communications International. So he's giving them all the fresh vegetables, meat substitutes, cakes and drinks they could ever want.

"This was a way to say: 'Look, we don't feel it's right to have the flesh of an animal, an animal killed for your benefit,'" Mason said. "I see it no different than smoking. People are asked to go outside and smoke."

It also will hopefully teach them respect for animals, he says, a value symbolized by Lucille, the paralyzed dog he adopted that follows workers around on a little wheeled contraption.

As students of economics, we think Mr Mason's idea an excellent one. After all, there are few better ways to change eating habits than to offer free lunch to one's workforce. We ourselves are not fans of "meatless, eggless, butter-free delicacies," as the AP describes the cafeteria spread, but were they provided to us gratis we would eat them every day. This is because our dislike of soya is far less than our dislike of shelling out $5 to $10 per day for lousy food.

However, we are also students of the human condition here at The Rant, and as such we don't think Mr Mason's firm is spreading the gospel correctly. For one thing, not letting workers bring meat into the cafeteria is not exactly a morale-booster for workers who like the stuff. But that move not only sows discontent -- it also acts as a disincentive for workers to one day switch and try the vegetarian food, as well as a disincentive for people to stick around at the company. As a rule, people do not appreciate being treated as if they were children -- and if workers were calling a television station about their cafeteria, we do wonder if they were disgruntled about more than lunch.

Furthermore, Mr Mason's arguments for creating the cafeteria aren't exactly savvy. He is sensitive and caring and wonderful in his comments, yes, but he's also a businessman. So screw sensitive and caring and wonderful. This is about profit and productivity.

In terms of the first point, Mr Mason is undoubtedly losing money on his cafeteria, but so do most firms. He can justify the cost through the health and retention benefits that accrue from it; lower medical costs, and the lower costs which derive from less employee turnover. But not once in this article does he do so. Instead, he goes on about how important it is to care for animals and such. This is all well and good, but it ignores fundamental arguments that can do much to make his staff realize that his vision is sound.

In terms of the second point, there are undoubtedly productivity benefits that arise from having a free cafeteria on-site: namely, workers spend less time at lunch and more time at their desks working. Not once does Mr Mason bring this benefit up. Instead, we learn about how our society does scary things to animals. We suppose we should appreciate Mr Mason's openness in this regard, but we do think he missed an excellent chance to keep quiet. At the very least, such comments may draw raised eyebrows from his workers.

We also must say that we're not impressed with Mr Mason's analogy between eating meat and smoking tobacco. Last time we checked, after all, many states and municipalities and corporations do not merely ask workers to smoke outside; they mandate it. There is undoubtedly such a mandate here with both tobacco and meat, so don't be cute and dress it up as something other than that. Instead, explain the mandate and have done with it.

Now the company of which we speak is apparently a private concern, and as such, we think the people who run it can run it in whatever manner they see fit. That said, though, almost every sizable private firm is run with two long-term end goals in mind: an eventual IPO or a sale to a larger company. So, setting aside the business operation from its leaders for a moment, we would ask: would you invest?

Posted by Benjamin Kepple at November 5, 2004 10:05 AM | TrackBack

Well as you say, this is a private company and they can do as they wish. However, I would hesitate to invest. While concern for animals is definitely a virtue imposing one's own ideas on your employees when those ideas are not related to business issues is certain to cause ill will among many. And in this case it probably reflects the boss' overly egostical sense of self importance accompanied by a need on his part to show others that he can control them "simply because (as Bill Clinton would put it)I can"...not exactly a morale booster. Perhaps the company's sales, profits, quality, customer satisfaction and innovation are all so excellent that it can afford to keep the employess focused on how they are being manipulated for the amusement of management rather than having them attend to the core business functions, but I tend to suspect otherwise. So, in answer to your question, "no I wouldn't invest."

Posted by: Swammi in Solon at November 5, 2004 04:54 PM

"Perhaps the company's sales, profits, quality, customer satisfaction and innovation are all so excellent that it can afford to keep the employess focused on how they are being manipulated for the amusement of management rather than having them attend to the core business functions, but I tend to suspect otherwise."

Gee, I wish I had written that!

Posted by: Benjamin Kepple at November 5, 2004 10:24 PM