It’s relatively easy and cheap to solve most retention problems. Most workers really don’t leave for money. Managers like to hear that “it’s the money” because that shifts the “blame” for losing employees away from managers to the compensation department! Employees often do say, “it’s the money” because that preserves their positive “references”.
If you look at the “real” causes of turnover (through delayed exit interviews and by comparing the “actual” difference in salaries) what you find that people usually don’t leave because of money and that managers control over 75% of the reasons why people leave their jobs! I call these manager controlled reasons for leaving – the “big six”.
When salary offers do have an impact you find what actually happened is that bad management practices caused their employees to look for another job and only after looking, do they then realize they can get more money (and also get treated better) if they leave. The solution to management-related turnover is relatively simple. Raise the workers expectations of how they should be treated by their managers and help managers understand and improve their delivery of the “big 6”!
What are managers’ “people responsibilities” and how to cut your turnover rate in half.
Most managers don’t really know how they are expected to treat their workers? Honest…they don’t. To find out for sure, do a quick survey with 10 20 of your managers and be prepared for a huge variation in what different managers think their “people responsibilities” are. Then compare their perceptions with HR’s expectations. Expect to be “unpleasantly” surprised! Managers are generally not measured or rewarded for excellent people management or for keeping their turnover low. As a result managers are not motivated to find out that “they” might be part of the problem.
What should workers expect from their managers?
A second related “truth” is that employees don’t know what to expect from their managers. They are seldom told specifically that managers should provide them. And except for an occasional 360 degree feedback opportunity no one ever asks them if their expectations of their manager are being met. In order to find out, do a survey (like the one you did for managers) of a small sample of your employees. You will invariably get an even wider range of answers than in your manager’s survey. If workers don’t get the things they need from your managers they will begin looking for it somewhere else!
Getting your managers top own retention
If your people are leaving for a “better job” then HR needs to clear up any confusion and make it a condition of employment for your managers to provide their employees with the things that will make their current job a “better” job!
Start by following these simple steps.
- Step 1 – Tell your managers that excellence in management is a condition of their employment and part of that responsibility is that their employees are satisfied that they are receiving the “big 6”. (Action item Develop a “bad management identification program and transfer the poor performing managers (10%) out of managerial jobs).
- Step 2 – Have HR develop a reward and periodic measurement system (a 360 degree feedback mechanism can also work) to see if managers are delivering on the “big 6”. (Action item–Make at least 10% of a managers’ pay based on the delivery of the big 6 and the retention of top performers. Do random interviews with employees to check if they are satisfied with the “big 6”).
- Step 3 – Have HR develop tools to teach managers how to improve their delivery of the “big 6”. (Action item Develop peer-manager coaches that assist managers that need help and on-line Intranet management training).
- Step 4 – Educate your workers to expect the “big 6”, no exceptions, no excuses. (Action item put the big 6 on the back of their employee ID cards and add it to their assessment of their managers).
- Step 5 – Watch your turnover rate drop like a rock!
The “Big 6”
Tell your workers they can expect
each of the following things:
- Honest, frequent two way communication, including rapid, constructive confrontation of issues (Min. standards Monthly “how am I doing meetings, proactive confrontation and resolution of issues).
- Challenging and exciting work (Min. standards Every employee has a challenge plan and is periodically asked to rate their degree of job excitement).
- Continual opportunities to grow and learn (Min. standards Individual learning plans and managers are rewarded for developing their employees).
- Being recognized and rewarded for my performance (Min. standards Every employee has at least ___% of their pay tied to output. Monthly more of/ less of meetings with managers. Forced ranking of all employees so all know where they stand. Escalation option for those that feel they are unfairly treated).
- Some degree of control over my job / life (Min. standards ___hours a month of flexible time, Opportunity for dropping undesirable duties, one day a week “job rotation, dream job list jointly developed with manager).
- Knowing their work makes a difference (Min. standards Cross functional opportunities to meet with the “up and downstream” coworkers/ customers. Periodic reports on the impact of their (their team’s) work)
- The “big 7”? – An excellent argument can be made that the manager can also significantly influence compensation in many firms. It is also certainly true that compensation is so interrelated with recognition and the other big 6 issues that taking compensation out of manager’s hands weakens their ability to retain talent.
By telling employees up-front that managers have control over compensation you force them to discuss pay on a one on one basis (one of the toughest topics to confront) with their workers. After managers overcome the” my hands are tied” compensation hurdle (excuse), other individual communication on the “big 6” issues is much easier!
© October, 1998
As seen on Gately Consulting