Greener homes = happier staffers

Mad scientists Clement Choy (at left), Penny Tudor and Heather Beach

Seventh Generation Headquarters: Burlington, Vt. Employees: 107 2008 Revenue: $150 million Key Benefit: Lends employees $5,000 to make homes greener

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(Fortune Small Business) -- Susan Johnson always dreamed of volunteering abroad. In May, her wish came true when she flew to Rwanda to work at a vocational institute for low-income women. Although she will be away for four months, she'll receive her full salary from Seventh Generation, a Burlington, Vt. manufacturer of recycled and nontoxic household products.

"I wouldn't be able to afford this if I wasn't being paid," says Johnson, 60, the director of education in the company's sales department.

The sabbatical program is one of many benefits offered by the firm, which generated $150 million in revenue last year. Employees' health-care premiums are 100% covered -- as are their dependents' premiums after five years with the firm. Seventh Generation also lends employees up to $5,000 to make their homes or cars greener.

Although the company spends about $3 million annually on such benefits -- 2% of revenue (within industry norms, according to the Bear Agency, a Troy, Mich., health-care consultancy) -- CEO Jeffrey Hollender claims it's money well spent.

"We get commitment and passion, which increase productivity," he says. As evidence Hollender points to the company's 4% turnover rate and its nearly $1.5 million revenue-per-employee rate. Both compare favorably with the national averages (19% and $500,000, respectively), according to the Society for Human Resources Management.

The key factor, though, is a culture that encourages dissent. When Seventh Generation hired a doctor as a spokesperson this year, several staffers, including Johnson, wanted the company to disclose that he was being paid (it eventually did).

"The employee's perspective is very influential in our thinking," says Hollender.

That influence does have its limits. Despite owning nearly 14% of Seventh Generation, workers have no representation on the board -- the subject of a long-running dispute between employees and management. And some workers complain that there's too much disparity between the bonuses of the lowest- and highest-paid employees. Although these issues remain unresolved, workers do seem to feel empowered by being able to discuss them openly.

"People are not shy about talking to management if they disagree with something," says Sarah Thompson, 33, the firm's online business manager. "That should be the case for a socially conscious company."

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