King Arthur Flour's ESOP contributes to receiving top small workplace award

An employee stock ownership plan (ESOP) is one example of how King Arthur Flour Co. considers its team members as whole people and offers what they value in their lives, says spokesperson Allison Furbish.

The ESOP and other practices at the Norwich, Vermont-based company contributed to being named one of the Wall Street Journal and Winning Workplaces' Top Small Workplaces for 2008 in North America. Fifteen organizations were honoured out of more than 400 applicants.

Winner selection was based on an intensive application and interview process that looked at topics such as employee-engagement efforts, staff turnover, training, annual revenue and teamwork.

"A big part of what makes us a top small workplace is the people practices that we have," says Furbish. "We try to really recognize the people and really appreciate the people who make this company successful."

The 100 per cent employee-owned company has approximately 170 employee-owners.

Employees who are in the ESOP have worked at the company for at least a year and a minimum of 800 hours per year. Stock is gained based on the amount of time worked at the company and the employee's base salary or wages.

Over time, employee-owners become vested in the program and after seven years are 100 per cent vested, or own 100 per cent of the stock that is set aside in his or her ESOP.

If an employee-owner leaves the company, King Arthur Flour buys back the portion of the stock that was vested in.

The company also has profit sharing, an amount determined at the beginning of the fiscal year by the board of directors and senior managers based on how well the company is doing financially.

"One of the big advantages of being employee-owned is that we are very open-book and we do a lot of internal communication," says Furbish.

Each month employee-owners have the opportunity to see and discuss the company's financial numbers and compare to the previous year and budget. Employee-owners will discuss how everything is going and what could be changed to improve things.

The company also has a weekly e-newsletter that goes out to all employees.

Communication across the company enables opportunity for employees to take the responsibilities and rights of owners, says Furbish.

"The more minds you put to a problem or a success the more you can do with it," she says.

"The amount of communication and transparency is really valuable because it enables each person to go back to whatever job they are doing and think about how they can do that job best to meet the overall goals of the company."

The company sees value in educating employees about baking and other areas of the business, and has classes on pie-making, whole-grain baking and how to mill flour. As a company that has many different areas, including a bakery and fulfillment centre, the classes give everyone a sense of what's going on in other parts of the company which leads to collaboration and communication that strengths all areas of the business, says Furbish.

There are also classes on subjects employees can use in their personal lives, such as how to build a budget and proper knife skills.

Furbish says because everyone has a good picture of what's happening in the company and there is communication across the company most people know their colleagues and it creates a culture of collaboration.

"It feels like you are working really truly side by side and towards the same goals as everybody else in the company so there's kind of a cultural feeling that's hard to describe," she says. "(It) is inspiration for everybody to do their best work and do whatever it takes to be successful, because we know that we are working directly for our own retirement accounts basically in the ESOP as well as the retirements of everybody else that we work with."

King Arthur Flour is America's oldest flour company and is known for its high-quality flours and passion to share the joy of baking. In 1990 it was a small mail-order business with five employees and has since grown to a baking resource with 200 employees.

The company is a founding B Corporation, which uses business to solve social and environmental problems.

The Top Small Workplace award is one of many accolades for the company, including being named an Internet Retailer Hot 100 sites in 2009 and a WorldBlu Most Democratic Workplaces 2008 awardee.

To learn more about King Arthur Flour, visit www.kingarthurflour.com.

Related Stories:
Town hall allows employee-owners at King Arthur Flour to voice their opinions

King Arthur Flour earns spot on WorldBlu List for dedication to workplace democracy

If you have feedback on this article, please contact jennifer(at)axiomnews.ca or 800-294-0051.