HR proves its value: At SYSCO, subsidiary companies only buy HR programs that achieve results. That means HR has to figure out what they need—and what will affect the bottom line

Workforce, March, 2002 by Patrick J. Kiger

As a result of those discussions, Carrig and SYSCO created the Virtual Resource Center concept. Instead of replacing the regional units' existing HR practices, corporate HR teamed up with regional HR to provide them with additional tools and resources. Management at the subsidiaries would be free to choose which services and programs they wanted. And since the funding for those initiatives came out of their own budgets, they also got to decide whether they wanted to purchase services from corporate headquarters or hire an outside vendor.

Since the Virtual Resource Center had to depend on financing from the SYSCO subsidiaries to fund its programs, Carrig and his staff were forced to pay very close attention to regional needs. "I have to say to our president, 'This program will cost us $50,000, and I can get 10 companies to kick in $5,000,"' he says.

Had SYSCO corporate tried to dictate its HR programs, Wright says, it wouldn't have worked. "You'd have a lot of defensive reactions from the regional companies, because they're not getting dictates in other areas," he says. "Instead, Ken Carrig and his team have done a good job of developing relationships and credibility. Corporate works with them as a consultant, not as a director."

When executives of several SYSCO subsidiaries came to Carrig early on for help with a pressing problem--staff retention--he was eager to find a way to help. "We discovered that we didn't have any systematic tools to address the problem, to get a handle on what was good and what was not so good about our operations." That got Carrig thinking. And that's when he and Susan Billiot, assistant vice president of HR, went to Wright for help in designing a new survey program.

Innovative use of surveys

Companies have conducted workplace-climate surveys for decades, but Carrig and SYSCO wanted to go beyond what others had done. Sears, for example, already had shown that positive employee attitudes had a good effect on customer satisfaction, and that a combination of the two improved a company's profits. Carrig wanted to gather that kind of data, too, but he wanted to keep compiling it over time, and to study the impact of specific management practices at SYSCO companies.

"This is a step up from the classic Sears Employee-Customer-Profit-Chain model," Wright says. "That approach tells you the consequences of employee attitudes. The SYSCO model, hopefully, can tell you how to fix them."

When Carrig presented the new survey concept to a conference of regional executives, he was so confident of the initiative's promise that he offered the subsidiaries a money-back guarantee if they weren't satisfied. Fifty percent of the regional companies agreed to participate in the first year. In the past three years, more than 90 percent have signed on.

The wealth of data has helped SYSCO make useful discoveries. Corporate HR learned, for example, that one of the key discontents of delivery associates was the way their compensation was determined. "Generally, the only way they could make more money was to work overtime, or to stall so that they would be away from the warehouse longer," Carrig says. But HR also noticed that a few companies got higher quality-of-life scores from their drivers than the others did. They investigated further and found that those companies were paying activity-based compensation, which augmented a base pay rate with incentives for drivers who made more deliveries and fewer mistakes, and maintained good safety records. Success