No flat-screen TVs or expensive watches for reaching sales goals.

No at-your-desk massages or take-your-pet-to-work days, either.

St. Louis-based financial services firm Edward Jones hardly offers its 25,278 employees and associates any incentives at all. Yet for the past two years, the company has ranked at the top of Fortune magazine's list of the “100 Best Companies to Work For.”

Where most companies would probably put on a parade if they won that kind of front-page recognition, it took Edward Jones almost six months before management decided to celebrate — not with cocktails at the Ritz, but with a barbecue and beer.

“It was exciting for people, but we took it in stride,” says Michael Holmes, a firm partner and chief human resources officer. “We didn't do anything special. We sent a plaque to all our offices. We run our business the way we feel it ought to be run, and the rankings take care of themselves.”

What's Going On Here?

Considering that 96 percent of Edward Jones employees told Fortune that it's a friendly place to work, 90 percent said it's a fun place to work, and 89 percent said its management's actions match its words, there's more to the story than Holmes lets on.

Also of note from the survey results is that roughly 83 percent of Jones associates plan to work there until they retire. That's especially significant when you realize that the number represents a sales force that comprises 40 percent of the company's employees — and that the sales group is commission-based.

What's really going on? “What we heard most from Jones employees was how they feel cared for,” says Robert Levering, co-author of the Fortune annual list and co-founder of the Great Place to Work Institute Inc. ( in San Francisco.

This is a company completely owned by its brokers, many of whom operate in one- and two-person offices, many in small towns. These are people such as Carla Jones, who started with Edward Jones in 1987 right after college. She says the company is a lot like it was then, even though it has grown. “The culture and the organization itself has remained intact,” she says. “The principles and the attributes that I liked in '87 are still there.”

Although she might have thought about leaving a couple of times, “when I looked for other opportunities, I found them here. I have not interviewed outside of Jones since '87. I started in operations, but I didn't want to be there forever. You're encouraged to move around within this company.”

After working in operations for a year and a half, she moved to the government bond-trading desk for 10 years. “One day in 1998, I was asked to help launch the firm's UK operations, so I went overseas for a year. When I came back, I wanted to increase my management skills, so I was put in a supervisory role in our OTC trading desk with responsibility for the associates there. And if I wanted to be an IR [investment rep], I could have become one.”

Now she is based in Tempe, Ariz., part of the West Coast fixed-income marketing group. “It's more of a marketing role than the trading role I had in the past.

“Edward Jones doesn't offer incentives the way other companies do,” she says. “There are no artificial incentives here. The culture and environment allow people who have the initiative and self-motivation to take opportunities when they find them. It has to do with personal initiative and drive. When you see opportunities and you're qualified to pursue them, the company says, ‘Take the responsibility and run with it.’ If you do not have the skills to move along, they provide the training to be sure you will grow as a person and as a leader so you can take the skills down the road.”

The Power of Partnership

A major incentive for Carla Jones and others is the company's partnership structure. Every few years, selected associates are given the chance to invest in the firm and become a limited partner. Most take advantage of the opportunity, usually beginning with a $10,000 investment. Many can't afford to put $10,000 down in cash, so they take out a bank loan. “Our return always exceeds the amount of the capital,” Holmes says.

Over the years, limited partners are offered opportunities to increase their participation. Shares do not sell on the open market; when someone sells, they must sell to another associate so that the firm remains associate-owned. There are 5,000 limited partners and 233 general partners, and approximately one-third of the workforce participates. Partnership invitations are separate from the firm's retirement and profit-sharing plans.

“It's somewhat a matter of pride to be a limited partner of the firm,” says Carla Jones. “It's done on merit. I became a limited partner in 1991. I am an owner of the firm, and I get a return on my investment based on the profitability of the firm. To me, that's the big thing.”

“Our partnership structure allows us to keep a long-term focus,” says Holmes, who is a general partner. “It allows us to be much more consistent in our direction. People feel that this is their firm.”

A Company That Cares

Judy Niewoehner is another Edward Jones general partner, and she is responsible for associate relations, or what she calls “the protection of the corporate culture.” She joined the company 16 years ago, after 26 years in the banking industry.

“They've been the best years of my life. … It's an environment where you are expected and encouraged to be the best you can be. We have a lot of incentives to be very good at what we do, and we work very hard it. We are recognized, we are rewarded, and we are trained very well.” For her, the return has come in bonuses and, now, her general partnership.

Niewoehner also speaks about the company's openness. “There are no secrets here. If we want to ask Managing Partner John Bachmann a question that wouldn't be politically correct somewhere else, we're nonetheless encouraged to do that here. If we have good times or bad times, we know.”

That openness also exists when there are problems with brokers, which are Niewoehner's job to deal with. If brokers in a particular market are struggling, for example, she will ask veterans to come forward and provide mentoring. “We have hundreds of mentors who do this in addition to their job, and they don't get paid for it,” she says.

If the mentoring program isn't working, it's her job to investigate. “If a broker felt that they were unfairly being [targeted] on goals for production, they have a right to call us and say, ‘My mentor hasn't been helpful, and I'm struggling,’” she explains. “We then find out what happened in that relationship. If a hostile work environment exists, or if there are allegations of sexual harassment, it's our job to fix the problem.”

The word “volunteerism” is used to refer to the unpaid mentoring that experienced brokers do with new brokers, and the recruiting that these same brokers do to find the firm's next generation of brokers. “We live volunteerism,” Niewoehner says. “Nobody pushes; it's something from the heart. If we have a broker who has a tragedy, for example, everybody gathers around that person to support them.”

Targeted Incentives

The company's incentives carry through the same spirit. Unlike typical sales incentives that focus on volume and, as Holmes puts it, “pit people against each other,” they are designed to encourage diversification for customers and get brokers to work together. Qualifying is not limited to the top 10 percent of producers or to anyone who sells investments reaching a certain dollar amount, but rather to how portfolios meet customers' needs. “We want to be sure our customers invest for the long-term appropriately,” Holmes explains. “ The contests are not about how much money you brought in, but whether you have properly taken care of customers.”

For the incentive travel program, at least 40 percent of the brokers qualify every year; some years, as many as 60 percent. Group travel in recent years has included trips to Alaska, Vienna, France, England, Madrid, and South America.

Small Perks, Big Payoff

A few of the ways Edward Jones gives back to its employees:

  • Service awards are given as early as an associate's second year. Associates receive a tie tack or a necklace; a diamond is added at their five-year anniversary and every five years thereafter.

  • Founder's Day celebrates the company's culture and marks the company's founding. Although Edward Jones associates now number more than 25,000 and span three continents, the atmosphere of these events is still more typical of an old-fashioned company picnic than a Fortune 500 company gala. Founder's Day can take many forms, but all combine a carnival-type atmosphere (think chili cookoffs and marathons) with the down-home feel of a family reunion. Families are always invited.

  • Regional meetings are held every summer at resorts and city hotels in every district; again, families are invited to attend and there is built-in leisure time. The goal is to celebrate the firm's culture, communicate ideas, and recognize achievement.

  • The “Good Idea” program awards ideas that support the firm's objectives. Associates at the home office can participate to win a one-week, all-expenses-paid trip for two (this year to Hawaii). The originality of the idea, its potential impact, and whether the idea can be implemented all help determine if the idea is a winner.

  • The “Goodknight” program, established by retired broker Jim Goodknight, encourages brokers to give away a piece of their business to a new Edward Jones broker. The new employee is partnered with an experienced broker for about a year, allowing him or her to service some of the veteran's less active accounts before opening an office and assuming those accounts.

  • Recruiting recognition awards, such as a pen and pencil set, Swiss army watch and a clock, are regularly given to those who recruit people who are hired as new brokers.

What Fortune Said about Edward Jones

The Great Place to Work Institute surveyed 250 employees at 269 companies, asking about company practices in great detail. Employee responses counted for two-thirds of each company's score. The remainder was based on the Institute's evaluation of the company's benefits and practices.

Here's what Fortune had to say about Edward Jones:

“No. 1 for the second straight year, this stockbroker spends 3.8% of its payroll on training, with an average of 146 hours for every employee. New brokers at 7,781 branches get more than four times that much. Why does Jones invest so much in its people? ‘In order to grow, you have to be trained,’ says John Bachmann, managing partner, ‘or you get trapped in the present.’ While Wall Street firms are contracting, this Main Street firm is still hiring. The company is owned by employees (25 percent of them have partnership stakes), and perhaps that's why they care enough to have serious profit sharing and no layoffs.”