In this regard, companies are as bad as governments. I’m always reminded of this when I read about some antiquated local or state law that never got updated for common sense. For instance, South Carolina has a two-hundred-year-old law banning games with cards or dice -- even in your own home. So I guess the police can bust in and haul you and the kids to the pen for playing Monopoly or Go Fish!

When you have piles of rules, we believe it makes people extremely uneasy. They feel like they’re back in school -- or, worse, in prison. And the upshot is that they don’t feel as if they’re trusted. One of our sales associates shared how, at another company, she came to work one day despite having wrenched her back the previous night. She was in a fair amount of discomfort, but didn’t want to miss a day. So between customers, she sat down to ease the pain. Her supervisor spotted her, stomped over, and barked: “Get up right now. You can’t sit, because it sets a bad example. It’s the rule.”

You know the old saying “Rules are made to be broken.” Well, we find that people look on rules as meaning that you’re testing their integrity. Which translates to “I don’t trust you.” So one of the most important ways we show that we trust our people is by not having rules except those required by law.

Now, when we say that we don’t have any other rules, we don’t mean that we operate in complete anarchy -- maybe a touch of organized chaos, but not anarchy. No business could be successful if it were run that way. People don’t come and go as they please, they don’t have limitless expense accounts, they don’t come to work in bikinis.

You see, we’re a hugging culture based on values and principles, not rules and regulations.

So how do we establish parameters? Rather than rules, we have expectations. And if you have a company comprised of trustworthy people, setting examples and expectations works a lot better than rules.

What’s the difference between rules and expectations? To our mind, rules are unbending. If the rule is that you have to take lunch from noon to one o’clock and you don’t take it at that time, then you starve to death. So rules are rigid. To me, they’re cold and impersonal.

Expectations, on the other hand, are warm, and they’re flexible and freeing when they need to be. The clear understanding is that you are expected to live up to our expectations, and so you come in and leave when you are scheduled to, but you don’t need a time clock to keep you honest. Expectations are mutually agreed upon -- and they can be fulfilled in different ways by different people. No two individuals are completely alike in talent, strengths, motivation, or personality -- everyone has plenty of quirks or weaknesses -- so why should everyone have to follow rigid rules? Expectations are pliable and they may be adjusted to suit an individual and build on his or her strengths.

What, then, are some of our expectations?

There are seven key expectations that are important to me:

1. Be positive, passionate, and personal.
2. Work and play hard -- and work smarter, too.
3. Understand the power of the team. That means exhibiting mutual respect and trust. Fun and success mean we, not I (remember the old expression, “There is no ‘I’ in team”).
4. Dress appropriately (this especially applies to us since we’re in the clothing business).
5. No surprises.
6. Always, always be open and tell the truth!
7. Hug one another and hug the customers!

We also like to use the word standards a lot in place of rules. In general, we set very high standards, and we expect everyone to do their level best to live up to them. My tenth-grade civics teacher wrote in my Staples High School yearbook, “Live up to your potential,” and I obviously never forgot it and think about it often, and that’s what we want our people to do: live up to their highest potential.

That’s why effort, hard work, and education are emphasized. We like people to keep raising the bar, especially in areas where they are naturally strong. We realize that if the bar is raised appropriately with each individual in mind, then everyone will reach his or her personal and professional goals and will enjoy -- indeed love -- the journey, the process, the playing of the game of the career of life.

And so within our expectations we establish specific standards, or targets. For instance, we expect our sellers to achieve $1 million in sales their first year with us (but we don’t horsewhip them if they do $900,000). We expect tailors to be fast and accurate -- we never like pants that end six inches above the ankle -- and to work as a team. And, of course, we expect everyone to support one another in a sale, to share their skills and “secrets” on personalizing relationships with other huggers, and to store data for everyone to use in an open and honest way with respect for privacy and confidentiality.

So set expectations for your associates, but leave rules to the prison wardens.

Excerpted from the book Hug Your People: The Proven Way to Hire, Inspire, and Recognize Your Employees and Achieve Remarkable Results  by Jack Mitchell. Copyright (c) 2008. Hyperion. Available wherever books are sold. All Rights Reserved.