PREFACE 

This updated publication by Galen Rapp, ProgTwn Leader, EducationlMember Relations, 

is part of a series to visually present basic information about cooperatives. Illustrations 

have been created for easy conversion to 35111111 slides or overhead transparencies. 

The series consolidates and updates an initial group of illustrated publications developed 

by C.H. Kirkman, Jr., former education specialist, and Gene Ingalsbe, former director of 

infonnation, for Agricultural Cooperative Service (now Rural Business and Cooperative 

Development Service (RBCDS)-Cooperative Services). Publications in the series cover 

what a cooperative is, how one is organized, what function cooperatives perform, and the 

responsibilities ofkey participants-members, employees, the lnanage/~ and directors. 

This publication focuses on employees. It covers what employees do and the role they play 

as an important part ofa successful cooperative. 

USDA/RBCDS-Cooperative Services 

Cooperative Information Report 18 

March 1995 

Consolidate~ and supersedes CrR 17, 

Employees Help Co-ops Serve, and 

CIR 18, Guidelines Co-op Employees Need. 

WHAT CO-OP EMPLOYEES DO 

COOPERATIVE EMPLOYEES
 

ooperative employees work for a unique organization because the business owners are 

the day-to-day customers. By contrast, most employees of investor-owned firms have 

little if any contact with customers, much less owners, through the course of their 

careers. 

This close contact with the owners requires a certain sensitivity by cooperative employees 

in serving members' needs. Therefore, employees become the pillar for the success of their cooperative's business. 

But, what are cooperatives and what makes them so different? Cooperatives are user-owned 

and democratically controlled businesses from which benefits are derived by members in proportion to use. Cooperatives are operated for the mutual benefit of the member-patrons. 

2 ROCO$-COOI'ERATlVt. SERVICES 
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COOPERATIVE EMPLOYEES, continued 

his unique business type operates under three distinct principles: 

• User-Owner/Financed~This principle means that the customer or people who use 

the cooperative are its owners. Their responsibility is to provide the equity capital or 

risk capital for operating the business. Other funds necessary for financing the operation may be 

borrowed from sources such as local banks, credit unions, and nationwide organizations like 

National Cooperative Bank in Washington, DC, and CoBank (National Bank for Cooperatives) 

in Denver, CO. These sources proVide the debt capital. 

• User-Controlled~Customers control the overall operations and the purpose of the business 

through their elected directors. Directors respond to the wishes of the members when setting 

the objectives and goals of the cooperative. Directors who don't respond to members' needs 

may not be re-elected. 

• User-Benefit~Member-patrons enjoy the benefits of the business because they accept the 

financial risk of capitalizing it. Member-patrons share the benefits of different types of cooperatives in different ways. They may be from sharing the profit or (loss) generated by business 

activity or gaining services they can't get elsewhere. 

4 RBCns-(.OOP[.RATIVE SJ'llVICLS 
THIS UNIQUE BUSINESS TYPE OPERATES 

UNDER THREE DISTINCT PRINCIPLES: 

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_• STOMERS OWN THE Bi'SINESS 

MAINTAIN srH~A R; E 

----·NTROL 
THE COOPERATIVE BUSINESS STRUCTURE 

Cooperatives are people organizations. They are organized to serve people's needs 

either by increasing their economic income or by providing products and services not

available from other sectors of the business community. Four distinct groups, each 

with separate roles, comprise a cooperative; but all coordinate to accomplish one objective: a 

successful business. Three of these groups are: 

• Members-These are the business owners who organize, incorporate, finance, and elect a 

board of directors to set the cooperative's policy. 

• Directors-Members of the board of directors are elected by, and serve at the will of, the 

membership. Some cooperatives may limit the years or terms directors may serve. The directors 

have two primary responsibilities: hire competent management and guide the direction of the 

business by providing policy and oversight to its operations. 

• Manager-As a cooperative employee, the manager serves at the pleasure of the board. 

Managers are responsible for the day-to-day operations of the cooperative. One of their most 

important tasks is to hire quality employees. In the chain of reporting relationships, employees 

are directly responsible to the manager. But the final evaluation of their productivity comes 

from customers-the owners of the cooperative. 

6 RBCD5-COOPERATIVE SERVICES 
THREE OF THESE GROUPS ARE:
 

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THE COOPERATIVE BUSINESS STRUCTURE, continued 

mployees-Members want and expect good service and fair treatment from the employees of the cooperative business. Employees must understand that this unique business

relationship places added emphasis on people skills when dealing with user-owners. 

Cooperative employees are the "glue'J that binds members to their business. Employees 

deliver the supplies customers buy; order and maintain inventories; keep accurate accounting 

records; provide services; advise and recommend products to meet customers' special wants and 

needs; handle customer complaints; represent the cooperative in the business and civic community; educate the members and public about the goods and services offered by the cooperative; 

adequately maintain facilities to serve members; and help to instruct and educate other employees. Employee careers often span the employment of severa] managers and numerous elected 

directors. Employees are the cooperative's front-line business representatives to the owner-user, 

other customers, and the community. 

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CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

he qualities of cooperative employees are not unlike those of employees working for 

investor-owned businesses. However, because of the unique ownership structure, people working in cooperatives are often regarded as a personal employee of every customer. To meet this unique demand, employees need particular characteristics. 

Develop a positive attitude-All of us like to be treated special. The "Make Me Feel 

Important" sales tool is valuable when dealing with all types of customers. This same attitude 

of respect and a positive attitude also helps to build a team spirit among employees of the cooperative. Repeat business, customer satisfaction, and cooperative business success depend on all 

employees displaying a positive attitude. Customers appraise employee attitude when answering 

the telephone and handling customer complaints promptly and fairly. 

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CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

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nderstand what a cooperative is and support its business ideals. It's hard for employees
 

to deliver quality services jf they don't understand the business that employs them.
 

Cooperatives are a unique business structure. The customer owns the business.
 

Ownership entitles members to services they may not expect or request from privately held
 

businesses. This also places certain responsibilities on the owner.
 

These two unique characteristics set cooperative employees apart from those in other types 

of business. Cooperative employees are often asked questions about internal operations and the 

earnings of the business. A well-informed employee knows how to handle these questions in a 

way that satisfies the member without revealing information that could be useful to the competition. Managers and key personnel must keep all employees well informed on current cooperative information. 

12 HBCD$-COOI'ERATIVh $U<VlCE$ 
UNDERSTAND YOUR COOPERATIVE SO YOU CAN ANSWER 

QUESTIONS ADEQUATELY. DON'T REVEAL INFORMATION THAT 

COULD HELP THE COMPETITION. 
CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

ollow cooperative policies and rules-A well-informed employee keeps abreast of current cooperative policies and rules. The purpose and application of any policy or rule 

should be discussed with a supervisor or explained in an employee meeting. Policies and 

rules are implemented to safeguard the member-customer interests, set good business standards 

and ensure the cooperative's success. 

An employee's supervisor or the manager are responsible for handling any conflict with the 

cooperative's policy. If an exception to a policy is requested, it is the responsibility of the 

employee's supervisor or the manager to interpret, evaluate, and act on the request. A wellinformed employee avoids evaluating policy or rules to fit a particular situation or circumstance. 

Employees should implement the cooperative's policy and rules in a fair and equitable manner 

toward all customers. 

14 RBCDS-COOPERATIVE SERVICES 
FOLLOW COOPERATIVE POLICIES AND RULES.
 

IF REQUESTING 

EXCEPTIONS TO 

POLICY, SEEK 

GUIDANCE 

FROM YOUR 

SUPERVISOR. 
CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

mespect all customers and treat them fairly-As customers, cooperative members want to 

be treated fairly and honestly by the business they own. Special concessions shared 

with selected customers soon bring dissatisfaction among aU customers. While some 

members may feel they should receive "special" treatment because they are owners, employees 

who treat all customers equitably gain their respect and confidence. Leaders of the cooperative 

quickly identify the employees who treat customers with respect and honesty. Special treatment 

of one customer may generate shortrun results, but cause long-term ill-will and dissatisfaction 

aITlong most customers. Employees must offer merchandise and services in a sense of "bestvalue" to all customers. 

16 RBCDS-COOPERATIVE SERVICes 
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CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

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e well trained-Employees must be able to explain technical information about the service areas in which the cooperative operates. The customer-member relies on employ­ 

ees to recommend correct products or services. The ability to respond to customer 

questions and resolve their problems determines if customers return to the cooperative for 

future needs. Because of the fast pace of today's business and changes in technical product and 

environmental regulations, employees must continuaJIy train themselves in products and service areas. Sound customer advice and accurate information are an important part of providing 

quality service. The well-trained employee understands and appreciates the fact that serving the 

needs of customers is the first step in customer satisfaction. 

18 RRCDS-eOOPERATIVE SERVTCES 
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CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

e a Team Player-All of LIS want to be on a winning team. Team success, whether on ,~ the athletic field or in the business arena, depends on all players cooperating to reach 

predetermined objectives and goals. Employees must know the goals of their cooperative and understand the game plan to attain them. Those who are critical of fellow employees, 

the management, or the elected leadership become negative thinkers. Each employee of the 

cooperative sales organization should know about its overall sales goals and his/her part in 

them. Employees working in service organizations must be aware of the service level required to 

meet the organization's overall objectives and employee's expected contribution to the team 

effort. 

20 REeDS-COOPERATIVE SERVICES 

CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

e a Team Player-All of us want to be on a winning team. Team success, whether on ,~ the athletic field or in the business arena, depends on all players cooperating to reach 

-IIIIIIII predetermined objectives and goals. Employees must know the goals of their cooperative and understand the game plan to attain them. Those who are critical of fellow employees, 

the management, or the elected leadership become negative thinkers. Each employee of the 

cooperative sales organization should know about its overall sales goals and his/her part in 

them. Employees working in service organizations must be aware of the service level required to 

meet the organization's overall ohjectives and employee's expected contribution to the team 

effort. 

20 RflCDS-COOPERATIVE. SERVICES 

CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

articipate in community activities-The image of the cooperative to the rest of the 

business community lies with the employee. Employee participation in service and 

civic organizations, school activities, professional and youth groups, and business organizations like the chamber of commerce is important. Costs associated with participation in service and civic organizations or professional groups are often paid by the cooperative. Most cooperatives maintain political and religious neutrality. When representing the cooperative, employees must be cautious about taking a particular stand or participating in an activity which has a 

special social, political, or religious orientation. Volunteering talents not only contributes to the 

employee as an indiVidual, but also shows that the cooperative is interested in the needs and 

welfare of the community. 

22 RBCDS-COOPERATIVE SERVICES 
PARTICIPATE IN COMMUNITY ACTIVITIES, INCLUDING:
 

• SERVICE CLUBS 

• SCHOOLS 

• YOUTH GROUPS 

• BUSINESS ORGANIZATIONS 
CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

eep supervisors informed-Constant communication is a key element in all business 

operations. Employees are the eyes and ears of the business. They constantly deal with 

the customers and the public. This feedback helps shape future procedure and policy 

changes necessary to increasing customer appreciation and satisfaction. Employee communication with supervisors provides the instructions that can lead to implementation of desired 

changes. Unsafe working conditions or damaged facilities and broken equipment should be 

reported to superVisors for correction or repair. Irregularities in business operations or planned 

absences from the job must be communicated to keep the business operating efficiently. 

Effective communications means not only talking, but also listening carefully to comments and 

suggestions from customers, instructions from supervisors, and recommendations from other 

employees. All help to build the cooperative team. 

24 I~ BeDS-COOr LR!\1'1 V l SEllvIU.s 
KEEP SUPERVISORS INFORMED; FEEDBACK FROM EMPLOYEES 

HELPS SHAPE FUTURE POLICY AND PROCEDURE CHANGES. 
CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

aintain personal appearance-Employees present the cooperative's image to the 

members via day-ta-day contacts. Part of the first impression that a customer makes 

of an employee is based on personal appearance. A positive first impression leads to 

customer satisfaction. Clean, correct-fHting apparel appropriate for working conditions is a plus. 

Any cooperative uniform required for the job should be fitted and cleaned. A well-groomed 

employee reflects the person's self-esteem and a positive image of the cooperative. 

26 RnCD$-COOPERATIVE SCRVICes 

CHARACTERISTICS OF THE QUALITY EMPLOYEE, continued 

aintain facilities, equipment, and inventory-This aspect of cooperative employment 

may have less appeal than working with customer-members. But, the importance of 

these functions must be understood so the cooperative can be an aggressive and 

profitable business. An accurate accounting of company inventory, balancing a cash register, or 

repairing equipment are important activities to a profitable business. Dirty or poorly arranged 

merchandise can be just as much a deterrent to reaching sales goals as overpricing or poor selection of merchandise for sale. 

Customer-members don't like doing business in messy facilities or trying to obtain quality 

service from equipment in disrepair. In the mind of the customer, malfunctioning equipment 

often reflects lower or poor-quality products and an attitude that employees don't take customer 

satisfaction seriOLLsly. Clean and well-maintained facil ities and equipment also create a safer 

work environment. 

28 RBCDS-COOPr.RATIVE SERVICES 
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SUMMARY
 

iven its unique business structure, each cooperative has particular goals and objectives. 

The objective of the cooperative that sells supplies to its members is to provide merchandise on a "best value" basis. The goal of a cooperative that markets products or services produced by the members is to pay fair-market value or negotiate for the highest price. 

Some cooperatives provide services to their members that are not available from other sources. 

In such cases, the objective is to provide a needed service, not necessarily to save money or 

obtain the highest price. Quality employees will understand why businesses are organized as 

cooperatives and be able to explain their uniqueness. 

WHAT co-op EMPLOYEES DO 31 
INFORMATION
 

mural Business and Cooperative Development Service (RBCDS)-Cooperative Services 

conducts research, collects statistics, develops educa tional materials and proVides onsite technical assistance to farmers and other rural residents interested in organizing 

cooperatives. Followup asslstance is proVided as needed. 

Cooperative Services develops both general and specific educational materials on cooperative organization and operation. Periodically, the staff conducts training workshops for the key 

participants in cooperatives-managers, directors, anel employees. 

Cooperative Services also publishes Farmer Cooperatives, a monthly magazine oriented to
 

the cooperative business community, plus a catalog of publications (CIR 4) that lists about 150
 

titles of reports and videos about cooperatives. Here are some particularly valuable to coopera­


tive employees.
 

Cooperative Benefits and Limitations, eIR I, Sec.3 

Cooperative Communications, CIR 1, Sec. 11
 

Cooperative Education and Training, cm I, Sec.10 

Cooperative Organization and Structure, CrR I, Sec.9 

Cooperative Principles and Legal Foundations, ClR 1, Sec. 1
 

Cooperatives in Agribusiness, CrR 5
 

Organizing and Conducting Your Cooperative's Annual Meeting, CIR 21
 

Recruiting and Training Co-op Employees, CIR 36
 

Understanding Cooperatives, CIR 6
 

Co-op EdllcatlOl1 IralDmg ~efles, l.JJ{ 4.), 1)3rt5 1-1l 

Advising People About Cooperatives, CIR 29
 

WHAT co-op EMPLOYEES DO ,13 
The United States Department of Agriculture (USDA) prohIbits discrimination in ih programs on the basi, of race, ('olor, natIonal origin, sex,
 

religion, age, disability, political beliefs and marital or familial StJlllS, (Not all prohibited bases appl)' to all programs). Persall> with dl~ahilities.
 

who require alternative mC,-tnS for communicatIOns of program information (braille, large print, audiotape, etc.),
 

shollid ~on(aCl lhe USD,A Office of Communication at (202) 720-7808 (TODL
 

To file a complaint, write the Secretary of Agricultllre, U.S, Department of Agriculture, \Vashington, I),c. 20250, or call (20Z) 72U-7327 (voice) or 

(202) 720-1127 (TDO) USDA IS an equal employment opportunity employt'r,