Not all reports are button-down

This is a story about the ``other'' annual report. Its form varies. It might be a puzzle, a poster, or a board game - a video or a calendar. Sometimes, it doesn't carry any financial data. It's the employee annual report, and companies across the United States are sending out 1986 financial reports not only to their shareholders but to employees as well.

Employee reports differ from stockholder reports in format and emphasis: Stockholder reports, usually in magazine format, stress financial data. Employee annual reports, in contrast, highlight employees.

``It's a `hey, atta boy, atta girl' kind of thing,'' says Larry Stevens, who worked on Atlanta-based Southern Bell's report. ``It gives employees a chance to toot their horns.''

``Fun'' rather than ``stodgy'' is how experts characterize the special reports. Because there isn't the pressure to compete with their slick four-color counterparts, the report is more creative:

Transamerica Corporation of San Francisco designed ``The Goal Game,'' a detachable board game in which employees win by reaching specified goals described in the report. Blue Cross Blue Shield of Maine designed one report as a calendar with pages marking employees' birthdays. At Western Savings of Phoenix, employees write their own report, in which they explain why they like working at Western Savings. And one report from Figgie International of Willoughby, Ohio, unfolds into a 22-inch-by-23-inch cartoon-style poster whimsically depicting Figgie's divisions and subsidiaries.

``Who says annual reports can't be fun?'' asks Ira Gamm, creator of the Figgie report.

But not everyone agrees that annual reports specifically designed for employees are appropriate. Their critics say explaining finances through posters and puzzles is patronizing.

``The implication is that employees don't have the intelligence that the big guys do,'' says Sid Cato, editor and publisher of the Chicago-based ``Sid Cato's Newsletter on Annual Reports.''

``Employee annual reports talk down to employees using Dick and Jane language,'' says William Dunk, managing partner of William Dunk Partners Inc. of New York. ``One-sided economic pitches to employees don't work.''

Rae Leaper, staff editor at Chevron Corporation of San Francisco, agrees: ``Many reports are more propaganda than revelation. They tend to be preachy, poorly written, or both; and too often they emphasize how little money the company is making at the same time heralding the benefits to employees.''

But those who create the reports defend them: ``It's not patronizing; it approaches things from a different angle,'' says Gary Shutler who helps edit the Chicago-based Walgreen Company's report.

``We're not going to get as deeply into the figures.'' Instead, Mr. Shutler says, the report gives a broad overview of where the company is going, how it measures up against the competition, and its future strategies.

This year, as a way of explaining finances and company policies, 36,000 Walgreen employees were asked, ``If you had a personal meeting with Walgreen's president or chairman, what would you ask?''

The 20 employees whose questions were chosen for publication in the employee annual report received $10 each. The questions included: ``Why don't we have more women store managers?'' ``Are Walgreen supervisors and managers given training in human relations personnel management?'' and ``How will the new tax laws affect our company?''

In addition to explaining the company's financial status, some companies use the reports as recruitment brochures, guides for new employees, information on the company, and yearly forums for settling misunderstandings between employees and management.

For example, one year Houston Natural Gas Corporation (now called ENRON) produced a report that tried to allay employee tension after an attempted hostile takeover.

In a year that was traumatic - a new chief executive took over and the company decided to sell three of its five businesses - the report reassured employees of the company's stability. Employees were pictured saying good things about Houston Natural Gas.

Another example comes from NCR Comten of St. Paul, Minn. President William Gotschall used the annual report to explain the company's loss because of a slump in the computer industry and what the company planned for 1987.

``The stockholder report gets readers to buy into a company. The employee annual report tries to get employees to buy into plans and strategies,'' says Craig Westoner, employee communications writer, who put together NCR Comten's report.

``The stockholder reports concentrate on numbers. The employee report tells employees how they affect those numbers.''