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     The Corporate Rating Sham:

     The Case of T-Mobile

    Tom Juravich [email protected]

    http://www.umass.edu/lrrc/ 

     Essie Ablavsky 

    September 11, 2014

    LABOR CENTER

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     The Corporate Rating Sham: The Case of T-Mobile1

    Tom Juravich2 & Essie Ablavsky 3

    Executive Summary

    The U.S. market has witnessed an explosion of corporate rating programs in the last

    20 years. We evaluate these rating systems through a case study of T-Mobile. The

    firm received at least 47 “best of” awards from 2011 to 2013, making the company

    an excellent candidate for our study. We evaluated these award programs in terms

    of selection criteria, the criteria used to evaluate firms, the quality of the data used,

    and the independence of the rating program. Our key findings include:

    • The majority of contests are based on self-nomination, and very few are trans-

    parent about how firms are actually selected.

    • These programs lack transparency in terms of the criteria used for evaluation.

    Consequently, several questionable firms have been included in these awards.

    • Most of the national awards are based on company self-reports with little in-

    dependent verification of the data.

    • Many of the firms conducting national evaluations also provide consulting

    services to the very companies they are rating. This creates a strong potential

    for conflict of interest.

    • Ratings based on workers’ surveys typically have low and unrepresentative

    response rates, calling into question the validity of the data.

    • Employers are often responsible for supervising survey data collection, which

    may also compromise the validity of the data.

    • The current rating systems fall short of established best practices in survey

    research.

    • Taken as a whole, these ratings and awards cannot be seen as objective mea-

    sures of corporate performance. Instead, they are best understood as parts of

    marketing programs operating in the guise of contests and competitions.

    • Rather than evaluating actual company performance, the ratings are a better

    indicator of a company’s allocations of resources to win awards and its work

    to create a facade of good behavior.

    • Consulting more rigorous and objective measures of corporate social respon-

    sibility suggests very different findings than the popular “best of” contest. At

    the same time that T-Mobile was named “One of the World’s Most Ethical

    Companies,” the highly rated ESG IVA rating gave T-Mobile a CCC rating, the

    lowest score possible, further questioning the validity of the “best of” ratings.

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    2 Juravich/Ablavsky 

    Introduction: The Explosion of Corporate Ratings

    The corporate world has come under increasing public scrutiny. Beginning with

    the early corporate raiders in the 1980s such as Michael Milken and Ivan Boesky,

    through the scandals at WorldCom and Enron, and the failures of Lehman Brothersand Bear Sterns, corporations have come under the closer watch of shareholders,

    activists, and citizens. More than ever, corporations feel under the microscope after

    such incidents as the oil spills from the Exxon Valdez and BP’s Deepwater Horizon,

    the collapse of the Rana Plaza factory in Bangladesh, and overwhelming scientific

    evidence of the impact of carbon on global warming.

    Many companies have responded to this increased scrutiny by developing policies

    on Corporate Social Responsibility (CSR) that have become standard in corporate

    documents and annual reports. At the same time, industries and analysts respond-

    ed with an explosion of new indexes and rating systems for a variety of criteria

    such as corporate governance, environmental performance, and supply chain man-agement. These range from the United Nations Global Compact and the Carbon

    Disclosure Project to indexes such as the Dow Jones Sustainability Index, the Lon-

    don-based FTSE4Good Index Series, and the KLD (Kinder, Lydenberg, and Domini)

    Social Rating (now part of MSCI ESG Research).

    In addition to these large-scale efforts to evaluate corporate social responsibility, we

    have also witnessed the explosion of “best of” contests that rate corporate perfor-

    mance.4 The two best known are Fortune magazine’s “100 Best Companies to Work

    For,”5 and the Ethisphere Institute’s “World’s Most Ethical Companies.”6 Following

    in their footsteps, states, cities, and industries have developed hundreds of awards

    and the awards often play a prominent role in their branding and public relations.Firms play the numbers game, counting how many awards they have won in a

    particular year as a metric of their corporate performance and social responsibility.

    Given the lack of any long-standing real measures of corporate social responsibility,

    and the technical nature of some of the emerging indexes of social responsibility

    firms use these popular “best of “contests as a proxy to demonstrate how well their

    firm is doing. They are easy to understand and are part of the larger social trend of

    contests and ratings.

    Given the growth of both industry- and business-based indexes along with more

    popular “best of” contests, it is important to step back and assess these contests

    and ratings. In this research, we scientifically evaluate the criteria, the data, andthe research methods used to determine these scores and ratings. We will examine

    these “best of” contests using the case of a specific company, T-Mobile US (formerly

    known as T-Mobile USA, and hereafter referred to as T-Mobile). The company re-

    ceived no fewer than 47 “best of” awards from 2011 to 2013, which makes it an

    excellent case through which to examine the issue of corporate rating programs in

    more detail.

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      The Corporate Rating Sham 3

     T-Mobile’s Accolades

    Table 1 (page 4) lists the awards that T-Mobile reported winning from 2011 to 20137.

    The company lists 11 awards received in 2011, 16 in 2012, and 20 in 2013. Nine of

    the awards were received in all three years. A small number of these awards mightbe considered national awards examining larger issues of corporate governance and

    social responsibility, including the Ethisphere’s Most Ethical Companies; Top Mili-

    tary Employers, Universum’s Top Workplaces for Corporate Social Responsibility;

    and Best Places to Work for LGBT Equality. The majority of the awards, however,

    are state- and city-based awards that rate employee satisfaction at specific company

    locations; in T-Mobile’s case, these are primarily calls centers. In some locations,

    such as Tampa Bay, Birmingham, and Idaho, T-Mobile has remained on the list all

    three years. In other locations, such as Richmond (Virginia), Atlanta, and Maine,

    they have been on and off the list. Four awards rate specific areas, such as recycling,

    Facebook use, and supply chain issues.In conducting this evaluation, we identified six major deficiencies across these rat-

    ing systems. First, virtually all of the contests are based on self-nomination. Conse-

    quently only a small subset of employers in the industry is evaluated, biasing the

    evaluation process. Second, there is little transparency in the criteria used to evalu-

    ate firms. Overall, rating firms disclose very little about the methodology of their

    rating system, which undermines both the validity and reliability of their findings.

    Third, the majority of the rating systems are based on self-reporting by the firms

    that are evaluated. Without independent assessment of the data, the objectivity of

    the information used for rating firms is seriously called into question. Fourth, many

    of the firms conducting the rating contest also act as consultants on branding andpublic relations to the very firms they are evaluating. These consulting or potential

    consulting relationships, and the lack of arms-length relationships, questions the

    objectivity of the rating agency. Fifth, the many ratings based on surveys of workers

    have low and unrepresentative response rates. Given that they may be based on a

    biased subset of employees, the validity of the data used for evaluation can be ques-

    tioned. Sixth, the vast majority of rating systems based on employee surveys utilize

    data collected by the employer. The lack of involvement of a neutral third party in

    data collection calls the validity of these data into question.

    Our overall evaluation suggests serious problems with the scientific validity of the

    47 awards won by T-Mobile from 2011-2013. Taken as a whole, these rating systemsdo not provide objective, verifiable measures of worker satisfaction or Corporate

    Social Responsibility at T-Mobile. Instead, our analysis suggests that they are better

    understood as part of the marketing and branding efforts of the company. Rather

    than objective indicators of T-Mobile’s actual performance, the number of awards

    they won is a product of the company’s efforts to apply for and to maneuver to

    win these awards. For T-Mobile to present these awards uncritically as measures of

    worker satisfaction and Corporate Social Responsibility is both misleading and un-

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    4 Juravich/Ablavsky 

    ethical. It is even more troubling given that more objective measures of Corporate

    Responsibility suggest that T-Mobile rates quite poorly, and among the lowest in its

    peer group.

    Evaluating the Methods of Corporate Ratings

    We examined each award that T-Mobile won from 2011 to 2013 using the follow

    criteria:

    • The selection of firms to be evaluated

    • The criteria used to evaluate firms

    • The data that was collected

    • The manner in which that data was analyzed

    •The independence of the rating agency

    Our detailed evaluation of each of the contests is listed in Appendix 1. In conduct-

    ing this assessment, six deficiencies emerged that are summarized below.

    1. Most Contests Are Based on Self-Nomination

    For virtually all the national and many of the state/city contests we evaluated, firms

    were included because they nominated themselves. Contest organizers did not be-

    gan with a list of all relevant firms and rate them all with some sense of compre-

    hensiveness. Instead, in most cases the only firms that were rated were ones that

    nominated themselves and, in some cases, paid a fee to be included in this evalua-

    tion/contest. This is the case for the two best-known corporate rating systems, For-tune magazine’s “100 Best Companies to Work For” and Ethisphere’s “World’s Most

    Ethical Companies.” Equally troubling is that neither system is transparent about

    how many firms are actually included in their evaluations. Although we assume

    that their rating must be based on thousands of companies, an investigative jour-

    nalist suggests that the 2013 “100 Best Companies to Work For” contest by Fortune 

    is “only the best of the 311 that applied.”8 

    State and local contests are typically run by newspapers, many in conjunction with

    national organizations such as Workplace Dynamics and other polling firms, and

    often begin with general surveys of workers at local firms. In most cases, however,

    the firm must get involved to ensure that the response rate from their companymeets some minimum threshold. In essence, this is another form of self-nomina-

    tion, for only those companies that participate will be included in the final ranking.

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      The Corporate Rating Sham 5

     Table 1: T-Mobile Awards 2011–20139

    National Awards

    1. One of the World’s Most Ethical Companies Ethisphere Institute 2011, 2012, 2013

    2. A Best Place to Work for LGBT Equality Human Rights Campaign 20133. A Top 100 Military Friendly Employer  G.I. Jobs  Magazine 2011, 2012,2013

    4. A Top Workplace for Corporate Social Responsibility Universum 2012, 2013

    5. A National Top Workplace Workplace Dynamics 2012

    State/City Awards

    6. Workplace Achiever Award for Top Denver Post  2012, 2013

    7. A Top Workplace in Tampa Bay, FL - Large CompanyDivision

    St. Petersburg Times  2011, 2012, 2013

    8. A Top Workplace in Atlanta, GA Atlanta Journal-Constitution  2011

    9. A Best Place to Work Tampa Bay Business Journal  2011, 2012, 2013

    10. A Best Place to Work in Idaho, Large CompanyDivision

    Idaho Business Review  2011, 2012, 2013

    11. Secretary of Defense Employer Support FreedomAward for New Mexico (Nomination)

    Department of Defense 2013

    12. A Top Employer in Richmond, VA TimesDispatch.com 2013

    13. A Top Workplace in New Mexico The Albuquerque Journal  2012, 2013

    14. A Best Place to Work in Birmingham, AL Birmingham Business Journal  2013

    15. Sterling Workplace Award in Richmond, VA Richmond SHRM & RichmondChamber of Commerce

    2013

    16. A Best Place to Work in Birming-ham, AL, LargeCompany Division

    Birmingham Business Journal  2011, 2012, 2013

    17. A Best Place to Work in Maine, Oakland Call Center Society for Human ResourcesManagement—Maine State Council

    2013

    18. One of the Best Workplaces for Recycling and Waste Reduction – King County

     Washington State 2011, 2012, 2013

    19. A Best Place to Work in Wichita, KS, Large BusinessCategory

    Wichita Business Journal  2013

    20. One of Puerto Rico’s Best Employers 2012

    21. 100 Best Companies to Work in Oregon, SalemCall Center 

    Oregon Business Magazine 2011

    22. Green Washington Award, Retail Category, SilverPlacement 

    Seattle  Business  Magazine 2013

    Other Awards

    23. A Top Ten Socially Devoted Brand on Facebook, Q1 Socialbakers 2012, 2013

    24. A Marketer of the Year Direct Marketing Association 2013

    25. Green Supply Chain Award Recipient Supply Chain Distinction Awards 2012

    26. Recognized Finalist, Supply Chain DistinctionAward for Operations Excellence

     World Trade Group 2012

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    6 Juravich/Ablavsky 

    This practice of self-nomination raises at least two concerns. First, and most impor-

    tant, the rating agency may only be rating a small—and not necessarily represen-

    tative—subset of all employers. In this way, the selection of firms evaluated may

    be biased. For example, one could assume that a peer-group firm must not have

    made the list, when in fact it neither competed nor was evaluated. Second, withoutknowing the total number of cases selected, it is impossible to know how competi-

    tive the contest is. For example, was the company on a list selected from thousands

    of firms, or just a few more than are on the list?

    2. Lack of Transparency in Selection Criteria

    The ratings groups were also surprisingly secretive about the actual criteria that

    were used for evaluation. This was equally true for national and state/city ratings.

    In determining their list of the most ethical companies, for example, the Ethisphere

    Institute initially suggests that their rating system is based on the following criteria:

    • Ethics and Compliance Program (25%)

    • Reputation, Leadership, and Innovation (20%)

    • Governance (10%)

    • Corporate Citizenship and Responsibility (25%)

    • Culture of Ethics (20%)

    These criteria seem to promise a quite transparent process. However, Ethisphere

    suggests the score based on these criteria is just the foundation for the selection

    process, used simply to narrow down the entrants to the top percentile of per-

    formers in each industry. Thereafter, “additional due diligence efforts begin” which

    “may include multiple means of verification as needed and warranted, including

    independent research, request for documentation supporting select answers and/

    or interviews with company leadership.”10 So what initially appears to be based on

    specific, transparent criteria, in the end is based on ad hoc evaluation. While veri-

    fication is important, it is best used to buttress a formal evaluation system, rather

    than to create a new, less formal rating system.

    Without transparency about the criteria used for evaluation, it is difficult to know

    why a particular firm ended up on the World’s Most Ethnical Companies list, which

    in the past has included some questionable firms. According to the investigative

    journalist Rich McEachran:

    Earlier this year, Kellogg’s and PepsiCo were featured in Oxfam’s Behind the

    Brands report on ethical shortfalls, scoring low on commitment to improving

    the rights of women and farmers. Neither was given a good rating for trans-

    parency. The following month, they were listed as two of the world’s most

    ethical companies by the Ethisphere Institute and awarded at a gala dinner

    in New York.11 

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      The Corporate Rating Sham 7 

    Similar concerns have been raised about Sodexo’s inclusion on the list.12 As Chris

    MacDonald, a former member of Ethisphere’s advisory panel and a professor of

    business ethics, commented, “Some of the categorization and terminology used can

    be quite vague. You can have a tobacco company appear near the top of a ranking,

    awarded just because none of the survey questions asks whether your product killsyour consumers.”13 

    3. Firms Self-Report Without Independent Verification

    Equally troubling is that most of the national awards are based primarily on corpo-

    rate self-reporting. This is the case for the Fortune and Ethisphere ratings, as well as

    the Corporate Equality Index on LGBT Equality. Fortune gives no indication that it

    engages in supplemental research or verification. The Ethisphere Institute suggests

    it has a follow-up procedure in place to monitor responses, but it may be to gather

    additional information rather than verifying the data already collected. The Corpo-

    rate Equality Index suggests a more rigorous verification, although the level of veri-fication is not indicated. These three major ratings are based largely on employer

    self-reporting without independent verification.

    Corporate governance and CSR ratings suffer from the same problem.14 For exam-

    ple, two of the best-known indexes—the Dow Jones Sustainability Index and the

    London-based FTSE4Good—are based on employer self-reports. The massive Car-

    bon Disclosure Project is also rooted largely in employer self-disclosure. In these

    ratings, as well as in national “best of” contests we have reviewed, it will be difficult

    to demonstrate scientific validity in the long run without independent verification.

    4. Many National Firms Conducting Evaluations also Act as Consultants

    Many rating agencies also provide consulting services to the very companies they

    are rating, raising serious questions of conflict of interest. Such a conflict is evident

    for the two largest and most prestigious awards, Fortune magazine’s 100 Best Com-

    panies to Work For, and the Ethisphere Institute’s World’s Most Ethical Companies.

    In examining the Fortune list, the analyst Phillip Mattera suggests, “What is most

    telling about the Institute website is the amount of space devoted to the promotion

    of the services being offered to customers. The way it seems to work is that compa-

    nies are encouraged to apply for consideration on one of the best-companies lists

    and they are urged to purchase services from the Institute.”15 Workforce Dynamics,

    an organization that compiles a national ranking and coordinates surveys in over30 cities—including several cities where T-Mobile won awards—also acts as a con-

    sultant.

    In other aspects of the operations of firms, this kind of conflict of interest is pro-

    hibited. For example, the Sarbanes-Oxley Act, passed in the wake of the Enron and

    WorldCom scandals, requires public companies to have an independent audit of

    their internal control practices. While there remains opposition in the business

    community, a recent report documents that overall the provisions have been suc-

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    8 Juravich/Ablavsky 

    cessful both to firms and markets.16 The kind of conflict of interest that is wide-

    spread in the firms that both rate companies and provide consulting to them on

    their brand undermines the validity of their ratings.

    Only the Top 100 Military Friendly Employer rating and the Best Place to Work

    for LGBT Equality rating are derived from agencies devoted only to rating (i.e., the

    agencies do not offer consulting). Both rankings also stand out from the pack in

    that their purpose is not to promote business but to provide information and guid-

    ance to military consumers and to consumers and potential workers about LGBT

    issues. In this way, they represent models of the independence necessary for rating

    agencies.

    We do not know if rating agencies let their consulting relations with firms affect

    their ratings. Yet the lack of an arm’s length perspective and the potential for un-

    due influence raise important questions about the rating agencies’ independence.

    Additionally, the connection of these rating programs to consultation concerning

    branding and CSR suggests that the goal of these contests may be marketing and

    generating revenue (from consulting) rather than providing an objective corporate

    rating system. Thus, the existence of a consulting relationship (or the possibility of

    one) does not inspire confidence in the objectivity of the rating system.

    5. Ratings Based on Worker Surveys Typically Have

     Low and Unrepresentative Response Rates

    Many of the state and local ratings are based on workers’ surveys. These survey-

    based ratings go out of their way to suggest that they have surveyed a large number

    of employees. In reporting the results of its national survey, Workplace Dynamics

    brags that its findings are based on over 1 million responses. Such claims imply that

    more responses make for a more valid survey. Based on the accepted practices of

    survey research and polling, however, the most important criterion when evaluat-

    ing a sample is not size but representativeness.

    Survey researchers define the population as the universe about which they seek to

    study or wish to generalize. The sample is a subset of the population selected for

    study. Survey researchers typically stratify  samples to ensure they are representative

    of the population. For example, in national polls conducted by news organizations,

    researchers use stratification or quota sampling to ensure that their sample has the

    same demographic proportions as the population. They also work hard to ensure

    that all members selected complete the survey. If the sample is representative and

    the response rates high, a relatively small sample can be used to make a valid infer-

    ence to the population. Typically these kinds of surveys sample between 500 and

    1,200 individuals depending on what confidence interval is desired. Two types of

    errors can take place in the process of sampling. Coverage error  results when not ev-

    ery individual in the population has an equal chance of being included in the sam-

    ple. Sampling error  results when data is collected from some subset of the sample.17 

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      The Corporate Rating Sham 9

    In its survey, Workplace Dynamics typically requires a set number of responses to

    the survey based on firm size. That number might be adequate if it was a represen-

    tative sample. But this approach to survey research fails to draw a representative

    sample—a subset of the total number of employees in the firm. Instead, it simplye

    surveys the entire population. Such a method reduces the coverage error  in that allworkers have the opportunity to participate in the survey. However, it maximizes

    sampling error  because not all workers will respond to the survey. No matter how

    large the response rates, unless it approaches 100% of the employees, we cannot be

    sure that it is representative. If the number of responses is a quarter or a tenth of

    all those employed at the workplace, we have no way of knowing if these responses

    are typical or are most likely individuals who feel strongly about the firm or have

    some reason to participate. This method does not generate valid data generalizable

    to the population.

    6. Employers Are Often Responsible for Supervising Survey Data Collection

    One of the other concerns we have identified from our evaluation of ratings based

    on surveys of workers, is that the data collection is typically coordinated by em-

    ployers and not by neutral third parties. For example, in the Workplace Dynamics

    surveys at the national and state/local level, the employer must ensure the com-

    pany meets the threshold necessary for a minimum sample size. This raises two

    potential issues in terms of the validity of the data. First, if workers know that the

    company is coordinating the survey, then individuals with more negative views of

    the firm would be more likely not to complete the survey, fearing reprisal. Survey

    respondents may be skeptical of guarantees of confidentiality, particularly in this

    very anti-worker and anti-union time period, and decide not to respond, biasingthe overall results. Second, employers may be sending subtle or not so subtle cues

    to workers about the importance of the company scoring highly, which may also

    bias the responses.

    Science or Marketing?

    Table 2 (page 8) lists the deficiencies we identified for each of the 47 awards won

    by T-Mobile from 2011 to 2013. These findings suggest serious questions about the

    scientific validity of the awards the company received.

    Most were initiated by employers who were also the primary source of information.Given the lack of transparency, we do not know how many firms took part in these

    competitions, whether employer self-reports were verified using other data, or what

    exact categories were used in determining these scores. Equally troubling is that a

    significant number of these awards were given out by organizations that also act as

    consultants, bringing into question their objectivity. Rating systems based on work-

    ers’ surveys are rarely based on representative samples and the administration of

    these surveys by employers has the potential for biasing the results.

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     Table 2: T-Mobile Awards 2011–2013

    and their Deficiencies

    National Awards Deficiencies

    1. One of the World’s Most Ethical Companies X X X X

    2. A Best Place to Work for LGBT Equality X X X

    3. A Top 100 Military Friendly Employer  X X X

    4. A Top Workplace for Corporate Social Responsibility X X X

    5. A National Top Workplace X X X X X

    State/City Awards

    6. Workplace Achiever Award for Top X X X X X X

    7. A Top Workplace in Tampa Bay, FL - Large Company Division X X X X X X

    8. A Top Workplace in Atlanta, GA X X X X X X

    9. A Best Place to Work X X X X X X

    10. A Best Place to Work in Idaho, Large Company Division X X X X X X

    11. Secretary of Defense Employer Support Freedom Award X

    12. A Top Employer in Richmond, VA X

    13. A Top Workplace in New Mexico X X X X X X

    14. A Best Place to Work in Birmingham, AL X X X X X X

    15. Sterling Workplace Award in Richmond, VA X X X X X

    16. A Best Place to Work in Birmingham, AL, Large Company Division X X X X X X

    17. A Best Place to Work in Maine, Oakland Call Center  X X X X X

    18. One of the Best Workplaces for Recycling and Waste Reduction X

    19. A Best Place to Work in Wichita, KS, Large Business Category X X X X X X

    20. One of Puerto Rico’s Best Employers X

    21. 100 Best Companies to Work in Oregon, Salem Call Center  X X X X X22. Green Washington Award, Retail Category, Silver Placement  X

    Other Awards

    23. A Top Ten Socially Devoted Brand on Facebook, Q1 X X

    24. A Marketer of the Year  X X

    25. Green Supply Chain Award Recipient  X X

    26. Recognized Finalist, Supply Chain Distinction Award X

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      The Corporate Rating Sham 11

    Taken as a whole, these rating cannot be seen as objective measures of T-Mobile’s

    performance in areas of Corporate Social Responsibility or worker satisfaction. They

    list these awards as if the number of contests won is an indicator of their actual

    performance as a corporation. Our research suggests that the number of awards a

    company receives may actually be a better indicator of how the company allocatesresources and maneuvers to win awards. Given that almost all the rating systems we

    reviewed were based on self-nomination where firms supply their own data, com-

    panies like T-Mobile can boost their numbers simply by applying for more awards.

    In this way, our analysis suggests that these rating systems are not objective mea-

    sures of company performance but are best understood as part of marketing efforts.

    Emerging business literature reinforces this connection with rating contests and

    marketing. This is clear in the title of Janine Popick’s article, “Industry Awards Cre-

    ate Buzz for Your Business: Learn How to Pick the Right Awards, and How to Market

    Your Success.”18 Popick is not suggesting that you build a company with the high-

    est standard of corporate social responsibility, but only that you chose the “right”awards to improve your marketing. Johnny Torrance-Nesbsitt concurs: “An impor-

    tant component of any firm’s Employment Branding Strategy must include go-

    ing after and winning various ‘Best Place to Work/Employer of Choice Awards.’”19 

    These “best of” surveys are part of the growing use of spot surveys—sometimes

    referred to as pulse surveys—in marketing.

    We do not suggest that firms restrain from marketing. Indeed, marketing is part of

    the life-blood of a firm. Rather, we suggest that marketing in the guise of a legiti-

    mate contest is both misleading and unethical.

    An Alternative Corporate Rating System

    An alternative to these more marketing-driven corporate rating systems is the frame-

    work created by the analyst community to evaluate Corporate Social Responsibility.

    MSCI ESG Research, one of the most highly respected measurers of CSR, “provides

    research, analysis and ratings concerning the environmental, social and gover-

    nance (ESG)–related business practices of more than 5,000 global companies.”20 

    MSCI indexes are not based on employer self-reports and are highly respected in

    the investor community.

    One of their most popular measures is their Intangible Value Assessment (IVA).“IVA measures and analyzes companies’ risk and opportunities arising from envi-

    ronmental, social, and governance issues. IVA scores rank company management

    on key issues relative to sector peers using a best-in-class ratings system, on a seven

    point scale from ‘AAA–CCC’.”21 Rather than trying to squeeze all issues of Corporate

    Social Responsibility into a single index, MSCI provides several distinct measures.22 

    At the same time that T-Mobile was winning an increasing number of awards, MSCI

    rated T-Mobile’s overall IVA score as CCC in 2013, the lowest score given to a com-

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    12 Juravich/Ablavsky 

    pany. In an updated report issued March 25, 2014, MSCI ESG moved T-Mobile up

    one notch to an overall BB IVA rating. It noted that this was largely due to the

    influence of Deutsche Telekom (DT), T-Mobile’s parent company in Germany.23 

    However, in the 2014 report MSCI ESG reiterated significant concerns about cor-

    porate governance, writing that “T-Mobile has a poison pill in place...shareholderscannot call special meetings, cannot act by written consent, and a super majority

    is required to change any bylaws.”24 Some new concerns, however, also appear. In

    the labor management area of the report MSCI ESG states, “The company performs

    poorly compared to its peers, amid repeated allegations of ‘union-busting’ activities

    in the U.S.” They also cite the results of a survey conducted by the Communica-

    tions Workers of America (CWA) and the labor federation UNI Global Union, which

    state, “46% percent of T-Mobile US workers had experienced harassment in the

    workplace.”25 

    To conduct a thorough assessment of T-Mobile’s corporate governance and corpo-

    rate social responsibility we would need to do much more than consult the ESG IVArating. Yet this brief analysis raises further doubts about the validity of the more

    popular “best employer” ratings. At the same time that the Ethisphere Institute was

    including T-Mobile as “One of the World’s Most Ethical Companies,” ESG gave the

    company the lowest score (CCC) in terms of their overall corporate governance.

    From a scientific perspective, as we have seen, the ESG IVA data is far superior to

    that collected by the Ethisphere Institute.

    Conclusions: Beyond the Corporate Rating Game

    This review of the 47 awards that T-Mobile won from 2011 to 2013 raises deep con-

    cerns about their scientific validity. The selection process, the criteria used and the

    method and kinds of data collected fall far short of the established best practices

    in polling and survey research. Given the corporate rating systems’ connection to

    consulting practices, many of the surveys in their current form are more appropri-

    ately seen as part of marketing and do not represent efforts at scientific evaluation

    of a firm’s performance.

    Consequently, we have little confidence that these awards are true measures of T-

    Mobile’s Corporate Social Responsibility. Our examination of more objective data

    used by the analyst community suggest that far from being award winning, T-Mo-

    bile is far below average in the industry and among the lowest in terms of their U.S.-

    based peer group on several measures of company performance.

    Given the myriad ways in which these rating systems fall short of established prac-

    tices in polling and survey research, a number of changes would need to be made

    to conform to current industry practices.

    • Rating agencies need to be transparent in terms of how many companies ap-

    ply to the contest and how many were considered in developing rankings.

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      The Corporate Rating Sham 13

    • The criteria used by rating agencies in evaluation should be transparent, in-

    cluding full disclosure of rating systems and any questionnaires used.

    • Rating agencies should make a full disclosure of all scores for winner and los-

    ers.

    • When ratings are based on workers’ experiences, rating agencies should de-

    velop survey methods that ensure representative samples.

    • The collection of data should not be supervised by the employer, but by a

    third party at arm’s-length from the firm.

    • Organizations conducting ratings should not be allowed to provide consult-

    ing services on the very issues on which they are rating firms.

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    14 Juravich/Ablavsky 

    Appendix 1: A Summary of T-Mobile Awards and the

    Methods by Which They Were Determined

    National / Regional Awards

    1. One of the World’s Most Ethical Companies—Ethisphere® Institute, 2011,

    2012, 2013, http://ethisphere.com/worlds-most-ethical/wme-honorees/ 

    Companies self-nominate for this award, and complete Ethisphere’s extensive ques-

    tionnaire online.26 The survey covers demographic details of the company, reputa-

    tion, innovation, and leadership. It also focuses on corporate governance, compli-

    ance, and ethics programs as well as auditing and monitoring of these programs.

    These questions, largely about corporate policy, constitute a very significant por-

    tion of the survey, which is followed by a smaller number of questions about sus-

    tainability.

    Ethisphere’s World’s Most Ethical (WME) Companies has a Methodology Advisory

    Panel comprising “leading attorneys and government officials, professors and orga-

    nization leaders who care about ethical and honest business practices.”27 The Meth-

    odology Advisory Panel is only involved in reviewing and commenting on WME’s

    Methodology and is not involved in selecting companies.

    The scoring is based on Ethisphere’s proprietary rating system, the corporate Ethics

    Quotient (EQ TM). It is based on the following categories:

    • Ethics and Compliance Program (25%)

    • Reputation, Leadership, and Innovation (20%)

    • Governance (10%)

    • Corporate Citizenship and Responsibility (25%)

    • Culture of Ethics (20%)

    Ethisphere notes that although the EQ score is the foundation for the WME selec-

    tion process, the score is used simply to narrow down the entrants to the top per-

    centile of performers in each industry. Afterward, “additional due diligence efforts

    begin” which “may include multiple means of verification as needed and warrant-

    ed, including independent research, request for documentation supporting select

    answers and/or interviews with company leadership.”28 While verification is impor-

    tant, it is best used to buttress a formal evaluation system, rather than creating a

    new less formal rating system.

    The EQ of awardees is not made public. It is also impossible to tell how awardees

    performed in each individual category. Additionally, the verification process that

    Ethisphere employs after its initial evaluation of a company’s survey is not transpar-

    ent. In short, it is difficult to know why any given company received a WME award.

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    In addition to compiling these ratings on firms, Ethisphere also provides consult-

    ing services on CSR compliance. Its programs include Ethics Inside® Certification,

    Compliance Leader Verification™, and Anti-Corruption Program Verification™.

    Since Ethisphere is in the business of providing ethics certification to the very firm

    it is rating, this raises significant questions about how it can act as an objectiveevaluator of ethics performance.

    2. A Best Place to Work for LGBT Equality—Human Rights Campaign,

    2013, http://www.hrc.org/campaigns/corporate-equality-index

    Since 2002 the Human Rights Campaign has been annually calculating the Corpo-

    rate Equality Index on Since 2002, the Human Rights Campaign has been annually

    calculating the Corporate Equality Index on LGBT Equality. The campaign invites

    major firms to participate, including “ Fortune  magazine’s 1,000 largest publicly

    traded businesses and  American Lawyer   magazine’s top 200 revenue-grossing law

    firms.” Any private-sector for-profit employer with 500 or more full-time U.S. em-ployees can also apply. According to their annual report, “A total of 1,923 received

    invitations to take part in the survey. Of that number, 574 submitted surveys, and

    734 were officially rated.”29 

    The Human Rights Campaign rates companies in three basic areas of compliance:

    • Have sexual orientation and gender identity nondiscrimination protections

    explicitly included in all of its operations, both within the United States and

    globally.

    • Require U.S. contractors to abide by companies’ existing inclusive nondis-

    crimination policy.

    • Implement internal requirements prohibiting company/law firm philanthrop-

    ic giving to nonreligious organizations that have a written policy of discrimi-

    nation on the basis of sexual orientation and/or gender identity.

    Based on these three criteria, the Human Rights Campaign has developed an ex-

    tensive questionnaire that rates firms in a number of specific areas. The Corporate

    Equality survey completed by individual companies is the primary source of the

    data. It recommends, “A team of researchers investigates and cross-checks the poli-

    cies and practices of the rated businesses and the implications of those policies and

    practices for LGBT workers, including any connections with organizations that en-

    gage in anti-LGBT activities. Employers are not rated until all appropriate informa-tion has been gathered and verified to the extent possible.” Based on these data, the

    campaign compiles a list of firms that score 100%. In 2013, that list had 304 firms.

    It included T-Mobile, along with AT&T, Sprint, and Verizon.

    The Corporate Equality Index on LGBT Equality is the strongest corporate rating

    that we have evaluated. It is transparent about the number of firms it evaluated as

    well as its criteria for evaluation, and there is at least some indication that research-

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    16 Juravich/Ablavsky 

    ers seek to verify self-reports. The Human Rights Campaign also does not act as a

    corporate consultant on issues of corporate governance or social responsibility.

    3. A Top 100 Military Friendly Employer, G.I. Jobs Magazine,

    2011, 2012, 2013, http://employers.militaryfriendly.com/ According to the G.I. Jobs website: “Our rankings of the Top 100 Military Friendly

    Employers® are based on a survey of over 100 questions which assesses a company’s

    long-term commitment to hiring former military, recruiting, and hiring efforts and

    results, policies for Reserve/Guard members called to active duty, and the presence

    of special recruitment military programs. See methodology table below. Corporate

    America has a voracious appetite for hiring military. The pool of companies eligible

    for our list is approximately 5,000 (minimum of $500 million in annual revenues).

    Only 2 percent make the Top 100 list. These companies are listed in rank order,

    within the ‘Ranked Top 100 Employers’ section of our site.” The methodology table

    on the magazine’s website indicates the weighting per criterion.

    Survey Question Categories Weighting

    Recruiting Effort (resources and policies) 35%

    Recruiting Results 24%

    Number of Years on the List 11%

    Guard and Reserve Policies 10%

    Retention 10%

    Internal Programs / Community Outreach 10%

    G.I. Jobs states that the survey results used to compile the 2013 lists “were indepen-dently tested by Ernst & Young LLP based upon the weightings and methodology

    established by Victory Media.”30 

    In 2013, telecommunication companies were ranked as follows: Verizon (#3), AT&T

    (#15), and T-Mobile (#66). One thing that sets this rating contest apart from most

    of the others we have evaluated is that it is not designed to promote businesses

    but instead is focused on providing information for the military consumer. This

    arm’s-length perspective suggests a stronger validity for this rating system. One

    potential problem, however, is that although Victory Media states that 5,000 firms

    are eligible to compete in these ratings, it does not provide any information on how

    many actually applied. Consequently, this raises questions about the validity of thefindings, considering how firms self-select for this award.

    4. A Top Workplace for Corporate Social Responsibility—Universum,

    2012, 2013, http://universumglobal.com/ideal-employer-rankings/ 

    According to its website, “Every year, Universum asks students to select the employ-

    ers they would consider working for and then choose the employers they would

    most like to work for, i.e., the companies that they perceive as being ‘ideal.’ Uni-

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      The Corporate Rating Sham 17 

    versum’s Ideal Employer Rankings reveal which companies are the most popular to

    work for. The Universum Student Survey is conducted every year around the world

    and students of all years of study are targeted at the top academic institutions.”31 

    Universum uses these student’s preferences to compile a series of Top 100 firms in

    a variety of disciplines.

    In 2013 the company surveyed 20,812 business students in the United States and

    in addition to the Top 100 firms in business, it also complied scores for a Top 10 in

    terms of corporate social responsibility. 32 Winners included:

    1. Phillips 66

    2. T-Mobile

    3. City Year

    4. Aflac

    5. American Cancer Society

    6. DOW Chemical

    7. United State Postal Service

    8. Johnson & Johnson

    9. The Home Depot

    10. Peace Corps

    This list reveals the real weakness of Universum’s rating system. Despite the large

    number of surveys conducted, the rating is based on the perceptions of students

    who have no direct experience with the company they are evaluating. In essence,

    this is a popularity contest. While some of the companies may be reviewed in

    course materials, their ratings are based on impressions of firms in the media and

    corporate advertising as well. Consequently, this results in a very odd list of theTop 10 firms in terms of Corporate Social Responsibility. To begin with, a number

    of those listed are not, in fact, private companies. The United State Postal Service is

    an independent agency of the federal government. City Year, the American Cancer

    Society, and the Peace Corps are nonprofit organizations. Universum’s polling may

    reveal where students want to work, but it does not provide us with a valid measure

    of CSR.

    Universum’s rating system is further compromised because the firm offers consult-

    ing on branding and communications to the very same firms it is rating.

    5. A National Top Workplace—Workplace Dynamics,

     LLC, 2012, http://www.topworkplaces.com/ 

    Workplace Dynamics is a consulting firm that partners with 30 publications across

    the United States to run regional best employer contests based on employee sur-

    veys. The firm conducted research in Denver, Tampa Bay, and Atlanta, where T-Mo-

    bile also won awards (see below). Workplace Dynamics pools that individual data,

    and also allows companies to apply directly for consideration, to create its national

    Top Workplaces program. “For 2012, we evaluated approximately 5,000 organiza-

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    tions in total, which included 872 companies with more than 1,000 employees na-

    tionwide. Top Workplaces evaluation is based purely on the results of an employee

    survey. For the National Top Workplaces list we aggregated all the employee survey

    data for the 872 companies with over 1,000 U.S. employees and looked at them on

    a national basis.”33 

    The survey contains 22 questions and allows employers to add five questions of

    their own. The basic questionnaire is not disclosed, so we have no way to evaluate

    the questions asked. By partnering up with employers, such as other national rat-

    ings agencies, Workplace Dynamics also acts as consultant to firms it is evaluating,

    which draws into question its objectivity.

    Workplace Dynamics emphasizes the large number of responses for its surveys. The

    firm suggests that its national ratings are based on more than 1 million surveys that

    represent 1 out of 88 of the workers at the firms rated by its surveys. For national

    rankings, Workplace Dynamics requires at least 350 survey responses. While the

    large numbers may look impressive, there is no indication that the sample is rep-

    resentative.

    6. Workplace Achiever Award for Top Workplaces— Denver Post ,

    2012, 2013, http://www.denverpost.com/topworkplaces

    In the  Denver Post ’s 2012 “Top Workplaces” contest, surveys were filled out by

    roughly 25,600 employees of 178 companies and other organizations based, or with

    offices in, the Denver area. One hundred employers were chosen to be ranked. Em-

    ployers with 85 or fewer local employees were required to have at least 30 respond-

    ers. The company reports that of about 54,900 workers at all of the employers,

    roughly 39,000 were invited to fill out surveys and about 25,600 did so. T-Mobile

    was ranked 13th out of 30 midsize employers. In 2013, T-Mobile met the national

    standard as a Top Workplace, but did not score high enough to make the Top 100.

    The Top Workplaces program for the  Denver Post  was coordinated by Workplace

    Dynamics. For more on their methodology see the discussion in #5 above.

    7. A Top Workplace in Tampa Bay, FL, Large Company Division— 

    St. Petersburg Times , 2011, 2012, 2013, http://www.tampabay.com/ 

    specials/2012/reports/best-places-to-work-in-Tampa-Bay/ 

    To be eligible, a company must employ at least 50 employees in the Tampa Bay

    area. If a company has less than 2,500 employees in the region, it must offer the

    survey to a minimum of 500 employees; if a company employs 2,500 to 5,000 em-

    ployees in the region it needs to offer the survey to a minimum of 20% of employ-

    ees; and if it has over 5,000 employees in the region it needs to offer the survey to

    a minimum of 1,000 employees. A 35% response rate is required to be considered

    for a Top Workplaces designation. For organizations with less than 85 employees,

    30 survey responses are required.

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      The Corporate Rating Sham 19

    In 2012, 33,838 employees at 132 bay area companies were surveyed and approxi-

    mately 23,000 employees responded. The Top Workplaces designation is divided

    into large, medium, and small employers to allow for more accurate comparisons.

    T-Mobile, Inc., ranked 14 out of 15 large employers. No other telecommunication

    companies were on the list. In 2013, when T-Mobile was again listed as a top placeto work, it was the only large telecommunication company on the list.

    The Tampa Bay Times partnered with Workplace Dynamics to conduct the study.

    For more on their methodology see the discussion in #5 above.

    8. A Top Workplace in Atlanta, GA— The Atlanta Journal-Constitution,

    2011, http://www.topworkplaces.com/frontend.php/regional-list/map/ajc 

    More than 1,200 companies were nominated or asked to participate in the 2013

    contest by the AJC and its partner, Workplace Dynamics. For more on their meth-

    odology see the discussion in #5 above. Workplace Dynamics then surveyed 183

    metropolitan Atlanta companies that agreed to participate. Each company requireda survey response rate of at least 35% for employees based in metro Atlanta. More

    than 49,000 metro workers participated in the survey. The resulting Top 100 list

    consisted of 20 large companies (500 or more employees), 30 midsize companies

    (150–499 employees) and 50 small companies (149 or fewer employees).

    9. A Best Place to Work— Tampa Bay Business Journal , 2011, 2012,

    2013, http://www.bizjournals.com/tampabay/event/78021

    The Tampa Bay Business Journal’s “Best Places to Work Award” is coordinated by

    Quantum Workplace, which serves more than 5,000 organizations annually through

    employee engagement surveys, action-planning tools, leadership assessment, andemployer of choice recognition. Quantum Workplace provides its survey to com-

    panies for free, but survey customization and advanced reporting are available for a

    fee. The survey contains 40 questions and assesses 10 areas of engagement. Quan-

    tum Workplace manages the Best Places to Work Award in partnership with Ameri-

    can City Business Journals and various other organizations, such as associations,

    chambers of commerce, and corporate sponsors. In this survey, no information is

    provided about how many workplaces were surveyed, how many employees were

    surveyed, or the response rate. This makes the scope of the survey highly suspect.

    Quantum Workplace is also a consultancy, providing a potential conflict of interest.

    10. A Best Place to Work in Idaho, Large Company Division— Idaho Business

    Review , 2011. 2012, 2013, https://www.bestplacestoworkinidaho.com/honorees

    In 2012, T-Mobile placed fifth in this contest and selected among large employers

    in 2013. The Best Places to Work in Idaho is collaboration between POPULUS ® and

    the Idaho Business Review . POPULUS is a strategic marketing and human resources

    research and consulting company. It provides many different types of services to

    companies including business development research, pricing studies, branding, and

    employee research. Companies can purchase additional services related to their sur-

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    20 Juravich/Ablavsky 

    vey results. POPULUS has served several telecommunication clients, but T-Mobile

    is not listed among them.

    In the Best Places to Work in Idaho survey, there is no breakdown of the number

    of participating companies and employees. All employees, from top management

    to entry-level, are eligible to take the survey. Minimum survey completion rates for

    eligibility for an award vary:

    • 50 or fewer employees: 80%

    • 51 to 250 employees: 60%

    • 251 to 500 employees: 40%

    • 500 or more employees: 20%

    Employees evaluate employers based on the following criteria:

    • Compensation and Benefits

    • Employee Growth and Development

    • Work-Life Balance

    • Workplace Environment

    • Company Management.

    Employee responses are tabulated and combined to create an Index of Excellence

    for each of the five dimensions of employee satisfaction. These indexes are used to

    select the winners and rank the Top Ten organizations in each size category.

    As with many of the other state-based awards program, we have concerns about

    how employees are sampled and how representative the sample is. POPULUS alsooffers consulting services, which could create at least an appearance of conflict of

    interest. Managers are also included in the survey, which may also affect the results.

    11. Nominated for Secretary of Defense Employer Support Freedom Award for

    New Mexico—U.S. Government, 2013, http://www.freedomaward.mil/NewsView.

    aspx?cphMainContent_LeftColumn_News1_grdNewsChangePage=7 

    The Freedom Award website states: “The Secretary of Defense Employer Support

    Freedom Award is the highest recognition given by the U.S. Government to em-

    ployers for their support of their employees who serve in the Guard and Reserve.

    Nominations must come from a Guard or Reserve member who is employed by the

    organization they are nominating, or from a family member. The award was created

    to publicly recognize employers who provide exceptional support to their Guard

    and Reserve employees. It is the highest in a series of employer recognition awards

    given by the Department of Defense.”

    The first award was given in 1996, and a total of 190 employers have received it

    since then. Each year, 15 awards are presented to employers in three categories:

    large business, small business, and the public sector. Any Guard or Reserve service

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      The Corporate Rating Sham 21

    member can nominate their employer, and the employer must be the service mem-

    ber’s current employer.

    Nominations go to a review committee in the company’s state. Once the nomina-

    tion period closes, the state selects semifinalists to move forward. A review board at

    HQ ESGR, a Department of Defense agency, considers all semifinalists for selection

    to the next round (finalists). The group of finalists goes before a National Selection

    Board comprising senior Department of Defense officials, representatives from each

    of the seven Reserve Components, employer associations, and past recipients of the

    Freedom Award. This selection committee makes recommendations for up to 15

    recipients to the Secretary of Defense for final approval.

    The exact selection criteria are not given, and there is no indication of how many

    companies are nominated. This makes it difficult to assess the validity of the survey

    methodology.

    12. A Top Employer in Richmond, VA—TimesDispatch.com, 2013, http:// www.timesdispatch.com/business/local/top-50-employers/ 

    In 2013, T-Mobile ranked 49 out of 50 for the Top Employer in Richmond, VA

    award. No information was available about the methodology of this contest.

    13. A Top Workplace in New Mexico, No. 4— The Albuquerque Journal , 2012, 2013,

    http://www.abqjournal.com/151989/biz/survey-seeks-to-find-top-workplaces.html

    In 2012, The Albuquerque Journal reached out to 700 companies and organizations

    around New Mexico to participate in the survey. Any organization—private, public,

    or government—with 35 or more employees in New Mexico can participate. The

    “Top Workplace” contest is coordinated by Workplace Dynamics. It therefore ex-hibits the same methodological defects as the other Workplace Dynamics awards.

    For more on their methodology see the discussion in #5 above.

    14. A Best Place to Work in Birmingham, AL— Birmingham Business

     Journal , 2011, 2012, 2013, http://www.bizjournals.com/birmingham/ 

    blog/2013/06/birminghams-best-places-to-work-for.html

    This survey was conducted for the Birmingham Business Journal by Quantum Work-

    place. T-Mobile’s Birmingham Call Center rated #2 in 2013. For more on their meth-

    odology see the discussion in #9 above. In this survey, no information is provided

    about how many workplaces were surveyed, how many employees were surveyed,or the response rate. This makes the scope of the survey highly suspect. Quantum

    Workplace is also a consultancy, meaning there is a potential conflict of interest.

    15. Sterling Workplace Award in Richmond, VA—Richmond SHRM &

     Richmond Chamber of Commerce, 2013, http://www.timesdispatch.com/ 

    business/economy/article_2d1d5e0e-3a9e-5c54-8df6-7e2426eff44e.html

    According to the Times-Dispatch website, “The Sterling Workplace Awards, the for-

    mer Employer All Star Awards, highlight employers who excel in employee engage-

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    ment, encourage community involvement, promote diversity and inclusion, and

    support employee development. The awards are sponsored by Richmond SHRM, a

    chapter of the national Society for Human Resource Management, with the Greater

    Richmond Chamber and the Richmond Times-Dispatch. The top executives at each

    of the 11 finalist companies were asked to describe in 100 words or less what makestheir workplaces sterling.”34

    The award includes four categories of employers:

    • Small companies with up to 99 employees

    • Medium companies with 100 to 499 employees

    • Large companies with 500 to 999 employees

    • Mega companies with 1,000 or more employees

    Scoring was based on the results of a survey conducted by Radford University, in

    which at least 60% of employees at each company participated. Respondents ad-dressed 65 items intended to assess the upper levels of organizational management

    and the attention given to employee focus, motivation, and development. A group

    of faculty and graduate students from Radford University’s Industrial/Organization-

    al Psychology department voluntarily donated their time to develop and adminis-

    ter the surveys, and analyze and score the results.

    This award is based on self-nomination, and it is unclear how many companies

    participate. Furthermore, there is no detailed information about the contents of the

    survey and how it is scored.

    16. A Best Place to Work in Birmingham, AL, No. 2, Large Company Division— 

    Birmingham Business Journal , 2011, 2012, 2013, http://www.bizjournals.

    com/birmingham/blog/2013/05/birminghams-best-places-to-work-for.html

    This survey was conducted for the Birmingham Business Journal by Quantum Work-

    place. T-Mobile’s Birmingham Call Center rated # 2 in 2013. For more on their

    methodology see the discussion in #9 above. In this survey, no information is pro-

    vided about how many workplaces were surveyed, how many employees were sur-

    veyed, or the response rate. This makes the scope of the survey highly suspect.

    Quantum Workplace is also a consultancy, meaning there is a potential conflict of

    interest.

    17. A Best Place to Work in Maine, No. 11, Oakland Call Center—Society for Human Resources Management Maine State Council, 2013, http://www.bestplacestoworkinme.

    com/index.php?option=com_content&task=view&id=52&Itemid=1

    To be eligible for consideration, companies must meet the following criteria:

    • For-profit or not-for-profit business or government entity

    • Publicly or privately held business

    • Have a facility in the state of Maine

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      The Corporate Rating Sham 23

    • Minimum of 15 full- or part-time permanent employees working in the state

    of Maine*

    • Be in business a minimum of 1 year

    To ensure credibility, organizations surveying 15 to 24 employees must have an 80%or better response rate on the employee survey. Temporary or seasonal employees,

    per diem employees, PRN, independent contractors / 1099 employees, volunteers,

    interns, consultants, or employees placed with other organizations are not eligible.

    There are sizeable fees associated with participating in this survey. It costs nearly

    $1,000 to survey a workplace of less than 100 employees. Therefore, it is question-

    able how representative these employers really are.

    18. One of the Best Workplaces for Recycling and Waste Reduction—King

    County, Washington State, 2011, 2012, 2013, http://your.kingcounty.

     gov/solidwaste/garbage-recycling/best-workplaces-2013.asp

    The Best Workplace for Recycling and Waste Reduction award recognizes local busi-

    nesses in King County, Washington. Businesses are invited to apply for recognition.

    The county’s website states, “King County locations return for their third year as

    Best Workplaces for Waste Prevention and Recycling. Nationwide, T-Mobile’s most

    successful printer optimization program resulted in eliminating more than 1,700

    printers, which led to a 30 percent reduction in paper use. A receipt reduction pro-

    gram at retail stores resulted in a paper reduction of 35 percent. They continue to

    recycle handsets and accessories at all stores and have collected close to one million

    handsets.”35 

    Several issues emerge in evaluating this award. We know that businesses are invitedto apply for recognition but we have no indication of the number of submissions

    or rejections. There is also no information on the criteria used to determine this

    award. From the text describing the award, it appears that T-Mobile is being evalu-

    ated primarily for what the company does on a national level, although without

    knowing more about the actual criteria used, it is difficult to access.

    19. A Best Place to Work in Wichita, KS, Large Business Category— 

    Wichita Business Journal , 2013, http://www.bizjournals.com/wichita/ 

    morning_call/2013/12/meet-wichitas-best-places-to-work.html

    In 2013 the Wichita Business Journal presented 10 “Best Place to Work” awards to

    small employers, 10 to medium-sized employers, and seven to large employers, of

    which T-Mobile was one. “Employees themselves choose the Best Places to Work

    by participating in a survey administered by Quantum Workplace. The goal of the

    program is to find companies whose benefits, policies and practices are among the

    best in the region.”36 For an explanation of the Quantum Workplace methodology,

    see the discussion in #9.

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    20. Recognized as One of Puerto Rico’s Best Employers, 2012

    No information on this award was available.

    21. 100 Best Companies to Work in Oregon, Oregon Business Journal ,

    2011, http://www.oregonbusiness.com/100-best-companies-2011\

    Private and public companies, nonprofits, and government agencies with a mini-

    mum of 15 employees are invited to participate in this contest, which segments

    employees into different categories by size and type of employer. In 2011, the Ore-

     gon Business Journal surveyed nearly 14,000 Oregon workers who rated 263 employ-

    ers in the following categories:

    • Benefits and compensation (health coverage, fitness and wellness, retirement

    plan, compensation, employee retention)

    • Work environment (scheduling, diversity, family balance, teamwork, fun,

    technology, community work, policies and procedures)• Decision-making and trust (collaboration and cooperation, creativity, trust

    and openness, organizational pride, ethical standards)

    • Performance management (performance feedback and goals, employee ac-

    countability, rewards and acknowledgement)

    • Career development and learning (opportunities, promotions, employee

    training, educational support, management diversity and communications)

    This data is supplemented by an employer benefits survey including information

    on health and wellness, time off, family-friendly policies, work scheduling, incen-

    tives, retirement plans, and culture. The employee survey makes up 5/6 of a com-pany’s score with the remaining 1/6 allocated to the employer benefit survey. One

    of the strengths of this rating system is that it combines both worker evaluations

    with an evaluation of company benefits.

    The weakness of this rating system is how the surveys are conducted. First execu-

    tives and owners are eligible to participate in the “worker” survey, although tem-

    porary and contract workers cannot. Furthermore, the threshold for sample size of

    just 12 employees, or 10% of the Oregon workforce, is a quite low and is not likely

    to yield a representative sample. The overall response rate for the annual surveys

    is not disclosed, and it should also be noted that this is one of the few awards that

    charges for their “best-of” list.

    22. Green Washington Award, Retail Category, Silver Placement— Seattle Business

    Magazine , 2013, http://seattlebusinessmag.com/article/2013-green-washington-awards

    This is one of a family of awards given by Seattle Business magazine. It is an award

    given to “the 50 companies and organizations in Washington State considered to

    be among the most environmentally aware and actively committed to sustainable

    business practices.”37 This list expands on the Green Washington Awards sponsored

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    26 Juravich/Ablavsky 

    was a member, but this heavy emphasis on consulting raises concerns about the

    objectivity of this contest.

    25. Green Supply Chain Award Recipient—Supply Chain Distinction Awards, 2012, http:// 

    www.sdcexec.com/article/10829171/supply-demand-chain-executive-announces-2012-

    annual-green-supply-chain-award-winners

    Supply & Demand Chain Executive is an industry-based organization and website.

    The 13th Annual Supply & Demand Chain Executive 100 ranking recognizes those

    companies that “initiated successful and innovative transformation projects” deliv-

    ering “bottom-line value to small, medium, and large enterprises across the range

    of supply chain functions” faced by industry professionals today. “Supply & Demand

    Chain Executive’s ‘Green Supply Chain Awards’ spotlight the different sustainable

    approaches that global businesses take to cut costs, save time, drive revenue.”40 

    In describing the award, the magazine does not indicate how companies are se-

    lected for the award or what criteria they use. They simply state, “Tell us: What haveyou done in your operations to improve the value of the global supply chain?” The

    lack of specifying anything beyond an open invitation to self-nominate does not

    inspire confidence in this award.

    26. Recognized Finalist, Supply Chain Distinction Award for Operations Excellence— 

    World Trade Group, 2012, http://www.prnewswire.com/news-releases/supply-chain-

    distinction-awards---rewarding-europes-leading-supply-chain-innovators-161058775.html

    The Annual Supply Chain Distinction Awards is a European award given to compa-

    nies “from in and around Europe. The awards were created to celebrate the achieve-

    ments at the highest strategic levels of supply chain management, across six disci-

    plines... Established five years ago, the awards are now well known as the biggest

    networking event of its kind. Leading manufacturers from the region congregated

    and utilised the awards, as a benchmark for validating the generation and adapta-

    tions required to their current supply chain strategies.”41 

    No information is given on how firms are selected or what criteria are used. What

    is not clear is why T-Mobile, as a U.S.-based firm, was included in this contest. T-

    Mobile was not an award-winning firm but a “recognized finalist.”

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      The Corporate Rating Sham 27 

    Endnotes

    1. The paper can be downloaded at: http://www.umass.edu/lrrc/ Partial funding was provided by theCommunications Workers of America (CWA).

    2. Professor of Labor Studies and Sociology, University of Massachusetts Amherst, [email protected].

    edu, phone 413-545-59863. Graduate student, Labor Studies, University of Massachusetts Amherst

    4. Wayne Norman, Caroline Roux, and Philippe Bélanger, “Recognizing Business Ethics: Practical andEthical Challenges in Awarding Prizes for Good Corporate Behaviour,”  Journal of Business Ethics 86(2009, 3): 257–71.

    5. “ Fortune 100 Best Companies to Work For, Money/CNN , accessed May 13, 2014, from http://money.cnn.com/magazines/fortune/best-companies/2014/list/

    6. “World’s Most Ethical Companies Rankings,” Ethisphere® Institute, accessed May 13, 2014, fromhttp://ethisphere.com/worlds-most-ethical/wme-honorees/

    7. “T-Mobile Awards and Recognition,” T-Mobile US, accessed May 13, 2014, from http://www.t-mo-bile.com/Company/CompanyInfo.aspx?tp=Abt_Tab_Awards

    8. “Why The ’100 Best Companies’ To Work List Is Useless,” 24/7 Wall St ., February, 10, 2011,http://247wallst.com/investing/2011/02/10/why-the-100-best-companies-to-work-list-is-useless/

    9. http://www.t-mobile.com/Company/CompanyInfo.aspx?tp=Abt_Tab_Awards

    10. “Scoring and Methodology,” Ethisphere® Institute, accessed May 13, 2014, http://ethisphere.com/worlds-most-ethical/scoring-methodology/

    11. Rich McEachran, “Ethical Awards: Green Wash or Genuinely Recognizing Sustainability?” TheGuardian Sustainable Business Blog , September 3, 2013, http://www.theguardian.com/sustainable-busi-ness/blog/ethical-awards-green-wash-sustainability

    12. Alyssa Figueroa, “A Raw Look at Sodexo,” Buzzsaw , http://www.buzzsawmag.org/2010/04/05/a-raw-look-at-sodexo/

    13. Quoted in McEachran, Ibid.

    14. Richard Crane, “Are You Ethical? Please Tick Yes or No on Researching Ethics in Business Orga-

    nizations.” Journal of Business Ethics 20 (3, 2009): 237–48.15. Phillip Mattera, “Background on the 100 Best Companies to Work For List and the Great Place toWork Institute,” ROC United, September 2013.

    16.  Julia Hanna, “The Cost and Benefits of Sarbanes-Oxley,” Forbes, March 10, 2014.

    17. Don A. Dillman, Mail and Internet Surveys. New York: John Reilly & Sons, 2009.

    18.  Janine Popick, ”Industry Awards Create Buzz for Your Business: Learn How to Pick the Right Awards,and How to Market Your Success,” July 20, 2010, http://www.entrepreneur.com/article/207586#

    19.  Johnny Torrance-Nesbitt. “’Best Place to Work Awards’ Cultivate Employer Branding,” October 14,2013, http://www.smartrecruiters.com/blog/best-place-to-work-awards-cultivate-employer-branding/

    20. FAQs for the Corporate Community, MSCI ESG Research, accessed May 13, 2014, http://www.msci.com/resources/factsheets/MSCI_ESG_Research-FAQs_for_the_Corporate_Community.pdf 

    21. Ibid.

    22. Viramaditya S. Khanna, “Corporate Governance Ratings: One Score, Two Score or More?” Universityof Pennsylvania Law Review , 39 (2009), 39–51.

    23. MSCI ESG Research “Intangible Value Asset (IVA) Report on T-Mobile,” March 25, 2014.

    24. MSCI ESG Research “Intangible Value Asset (IVA) Report on T-Mobile,” March 25, 2014.

    25. MSCI, ESG Research “Intangible Value Asset (IVA) Report on T-Mobile,” March 25, 2014.

    26. “2014 World’s Most Ethical Companies Survey,”  Ethisphere, accessed May 13, 2014, http://m1.ethisphere.com/worlds-most-ethical/2014/survey-private-companies.pdf 

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    28 Juravich/Ablavsky 

    27. “Advisory Panel,”  Ethisphere, accessed May 13, 2014, http://ethisphere.com/worlds-most-ethical/advisory-panel

    28. “2014 World’s Most Ethical Companies Survey.”

    29. “Corporate Equality Index, 2014,”  Human Rights Campaign, accessed May 13, 2014, http://hrc-assets.s3-website-us-east-1.amazonaws.com//files/assets/resources/CEI_2014_final_draft_7.pdf#__utma=149406063.1451293426.1396628759.1396794152.1396901239.3&__utmb=149406063.2.10.1396901239&__utmc=149406063&__utmx=-&__utmz=149406063.1396794152.2.2.utmcsr=google|utmccn=(organic)|utmcmd=organic|utmctr=(not%20provided)&__utmv=-&__utmk=201170606

    30. “Ranked Top 100 Military Friendly Employers,” accessed May 13, 2014, http://employers.military-friendly.com/

    31. “Ideal Employer Rankings,” Universum, accessed May 13, 2014, http://universumglobal.com/ideal-employer-rankings/

    32. “U.S. Organizations with the Best CSR Reputation, Universum, accessed May 13, 2014, http://uni-versumglobal.com/2013/08/us-organizations-with-the-best-csr-reputation/

    33. “Top Workplaces: How We Picked the Winners,” Working Dynamics, accessed May 13, 2014, http://www.topworkplaces.com/newsroom/how-we-picked-the-winners.php

    34. “FAQs for Sterling Workplace Awards,” Richmond SHRM, accessed May 13, 2014, http://www.rich-

    mondshrm.org/displaycommon.cfm?an=1&subarticlenbr=1278

    35. “Best Workplaces for Waste Prevention and Recycling,” King County Solid Waste Division, accessedMay 13, 2014 http://your.kingcounty.gov/solidwaste/garbage-recycling/best-workplaces-2013.asp

    36. “Meet Wichita’s Best Places to Work,” Wichita Business Journals, accessed may 13, 2014, http://www.bizjournals.com/wichita/morning_call/2013/12/meet-wichitas-best-places-to-work.html

    37. “2013 Green Washington Awards,” Seattle Business, accessed May 13, 2014, http://seattle-businessmag.com/article/2013-green-washington-awards

    38. Ibid.

    39. “Marketer of the Year,” DMA, accessed May 13, 2014, http://thedma.org/marketer-of-the-year/

    40. “Supply & Demand Chain Executives Annual Rewards Program,” accessed May 13, 2014, http://www.sdcexec.com/awards

    41. “Supply Chain Distinction Awards,” PR Newswire, accessed May 13, 2014, http://www.prnewswire.com/news-releases/supply-chain-distinction-awards---rewarding-europes-leading-supply-chain-inno-vators-161058775.html

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