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Posts Tagged ‘retention’

What does your attrition rate tell you?

Posted by Anadi Upadhyaya on July 18, 2012

Do you believe that you are doing great job just because your attrition rate is as per industry benchmark or lower than your competitors?

If you reward your entire workforce in almost same fashion, who do you think will stay with you between your performers and non-performers? If you don’t want your workplace to be a resting place for non-performers, you not only need to investigate reasons behind your employee’s decision to leave you but also to stay with you. You need to ensure that workforce holidaying at work is not the main reason for your lower attrition rate.

Knowing performer’s contribution to your attrition rate helps you to understand this number better and helps you to make required changes in your efforts towards addressing employee turnover. One-size-fits-all solution seldom works. You have to diagnose your people’s concerns in-depth before arriving on corrective actions. You need to verify early and verify often that your diagnosis is not only correct but also relevant.

It will be disastrous to depend only on the reasons recorded during exit feedback as truth may never prevail from there. It’s a mistake to expect correct feedback on your exit door at the time when “Do-not-burn-the-bridges” is the main mantra.

Neither the problem of employee turnover is new nor do the various claims to address it. Same age-old tactics to solve employee turnover problem will not give you new results. You should not dream to stop employee turnover altogether nevertheless you must try hard to save you performers. You need to understand why your performers are (or will be) leaving you. And try to address their concerns keeping in mind that:

  • No magic pill exists; you need to understand the problem before searching for a solution.
  • Conversation is the key; keep all forms of communication open.
  • Acting on employee’s feedback-data on time will save time and money for you.
  • Copying solutions blindly is a stale idea instead work on a solution tailored or designed for your need.
  • You must develop a culture of trust; nothing will ever work without it.

Posted in leadership, management | Tagged: , , , , | 1 Comment »

The Corporate Death of the Synergistic Team?

Posted by Louise Barnfield on June 27, 2008

Row Henson, in her session at our Fusion Strategy Council, and in her keynote presentation at OHUG this week, presented various research and statistics that have been common knowledge in the talent management arena for some time. However, one in particular made me ponder the reasons why…“only 20% of employees do what they do best at work” (Buckingham).

Hmm, so companies are consumed by the hot topics of employee engagement and retention; they strive to tie employee goals and performance to corporate goals; they pre-screen to ensure they get the best-fit new hires with less likelihood of quick turnover; and yet, the vast majority of employees are not enabled to do what they are best at doing! What’s that all about?

I have my theories – Subjective? Admittedly! Biased? Maybe! Argumentative? Most definitely! Valid? You tell me!

Firstly, I admit I pondered this only from the perspective of individual contributors, and with a particular bias on large corporations as opposed to, say, start-ups. So, yes, it’s a subjective, biased opinion but, hey, this is a blog not a thesis.

As an enterprise grows and automates its processes, employees seem to be increasingly pigeon-holed into strictly defined roles and responsibilities, with little or no allowance for personal preferences or abilities.

Is that because it’s easier to hire to a formula? …because it’s easier to interpret measurements and analysis if you have a large pool of comparisons? …or simply that resources have been so severely stripped that this simplistic approach takes less thought and effort?

When employees are straight-jacketed into formulaic roles that don’t take sufficient advantage of individual strengths and weaknesses, or likes and dislikes, is it any surprise that their abilities are not used effectively? Some of their strengths may be under-utilized, while they struggle to perform other tasks for which a peer may be better suited.

What if managers have the freedom to build a team in which each member takes on a heavier percentage of tasks that are most suited to their individual characteristics? What if the combination of the individual roles and personalities together can fulfill the needs of the team? A synergistic team – a mutually advantageous conjunction where the whole is greater than the sum of the parts!

On the flip-side, if job roles are too rigidly defined and applied to multiple individuals, each team member is forced to perform the same tasks in parallel with their peers. In this model, employees are silo’d vertically. Each may have their own subject area of responsibility but, to do their job, they all learn the same tools, attend the same meetings, follow the same processes, and even experience the same errors or problems (instead of benefiting from others’ experiences).

The cynic in me believes this is all about making life easier for senior execs, in a corporate environment where size precludes them having any personal knowledge of the individuals (or caring that they don’t!) – but at what hidden cost? Sure, it simplifies metrics, objective setting, and measuring performance at the highest level of the corporation – it’s so much easier to compare apples to apples – but how much untapped ability is being wasted, and how much effort is being duplicated?

In How to Build a High Engagement Workplace, Marcus Buckingham recommends that managers find ways for people to do what they do best. Of course, we have to be realistic about this, but at least this warrants serious consideration. As Buckingham acknowledges: “it may not be possible for everyone to be in a role which uses their strengths all the time“, although he continues “but managers can get better at identifying these talents, and providing opportunities for people to exercise these talents and to grow in them.” However, IMHO, I believe that in large corporations this responsibility goes beyond the managers, who are often hampered by corporate job descriptions and policies that effectively hand-cuff them from adopting a more flexible approach to their individual teams.

Am I an old cynic?…or are we witnessing the corporate death of the synergistic team?

…and what about the detrimental effect on employee engagement and employee retention? I throw those in because it’s always easier to get attention when you relate the issue back to a hot topic or two!

Posted in engagement, management, teams | Tagged: , , | 5 Comments »

How to calculate risk of loss

Posted by Justin Field on May 27, 2008

How to calculate risk of loss

Last month I wrote about the job satisfaction model for employee retention. Now I have used the model to develop a model that allows you to calculate the probability of losing an employee, based on their personal retention and turnover factors.

In my mind the risk of loss is really the probability of the loss event occurring, i.e. a decimal number between 0 and 1. So the model really is an exercise in statistics, to work out what that overall probability is. For each of the factors in the job satisfaction model, we can use the data stored in any good HRMS system to give us more information.

Poor Pay — Leads To Dissatisfaction
We could compare the employee’s rate of pay with the market rate (using their compa-ratio). A low compa-ration means they are paid under the market rate; a high compa-ratio means they are paid higher than the market rate. Therefore if the employee’s compa-ratio is 1, this would be a factor for a neutral stance.
Also, since most compensation models allow for increase of pay over time, we could look at both compa-ratio and length of time in job code. Low compa-ratio combined with long service in job code would imply dissatisfaction; low compa-ratio/short service in job code implies neutral; high compa-ratio/long service in job code implies neutral (but also implies that the worker should be ready for promotion too, and if they’re missing out on promotion then they’ll be dissatisfied — see the paragraph below); high compa-ratio/short service in job code implies neutral.

Poor Compensation — Leads To Dissatisfaction
We could look at the average bonus versus the employee’s bonus. If they are under the average then they could be dissatisfied; if they are over the average then they would be expected to be neutral.

Lack Of Promotions — Leads To Dissatisfaction
We could look at the time since last promotion. Long time period implies dissatisfaction; short time period implies neutral.

Lack Of Job Security — Leads To Dissatisfaction
We could look at the number of voluntary terminations and involuntary terminations for the employee’s job code or job family, for the last 12 months. High number of terminations implies dissatisfaction; low number of terminations implies neutral. Higher proportions of voluntary terminations imply that current/recent employees are choosing to leave the organisation, so could imply job insecurity and hence dissatisfaction; higher proportions of involuntary terminations imply that the organisation is downsizing, so could again imply job insecurity and hence dissatisfaction.

Good Leadership Practices — Increase Satisfaction
We could use the employee’s rating of manager performance in 360 reviews. Scores in the top quartile or above a certain threshold indicate satisfaction; scores in lower quartiles or below a certain threshold indicate neutral.
This could also be used to assess the manager relationship (though it’s imprecise).

Recognition — Increase Satisfaction
We could use the data around awards given to the employee to capture if the employee has received awards/recognition in the last 12 months. If yes, indicates satisfaction; if no, indicates neutral.

Feedback And Support — Increase Satisfaction
We could use the existence of completed performance reviews to measure this one. If yes, indicates satisfaction; if no, indicates neutral.
Also we could measure the difference between the employee rating and the manager rating within the performance document. If they are the same, this implies neutral. If employee is higher than manager, implies dissatisfaction or neutral. If employee is lower than manager, implies neutral or satisfaction.

Clear Direction and Objectives — Increase Satisfaction
We could use the existence of worker goals, or goal plans, and/or existence of individual development plan. If they exist, implies satisfaction; if they do not exist, implies neutral.

Weighting
The metric for each factor can be weighted, since some factors will naturally be considered more important than others, depending on the organisation and their business goals.

Risk of Loss
The risk of loss will therefore be the weighted average of all the factors that influence loss of an employee.

Using this model should help HR departments and line managers gain a better understanding of the multitude of factors that influence an employee’s decision to leave. With the risk of loss to hand, line managers can act decisively to intervene in an employee’s decision to leave and be pro-active in making changes that will retain highly-valued employees.

Posted in engagement, performance | Tagged: , , , , , | Leave a Comment »

Job Satisfaction Model for retention

Posted by Justin Field on April 11, 2008

I’ve been studying turnover and retention recently and it led me to wonder about the real reasons for turnover.  Everybody understands that some turnover is functional (or beneficial to the organisation) and some turnover is dysfunctional (bad for the organisation).  And we all understand that some turnover is necessary, otherwise organisations would stagnate. 

So, the fundamental reason that employees leave organisations is that they are not satisfied.  Their dissatisfaction could occur on many levels.  Much published research on turnover indicates that money is often NOT the most important reason.  Employees leave for other reasons such as career growth and development, or a change in life circumstances, or factors like that.

It’s handy to think of the reasons for dissatisfaction in terms of push factors (things that make employees more dissatisfied) and pull factors (things that make employees more satisfied).  Here’s a diagram.

Job Satisfaction Model for Employee Retention
 

The factors that are going to make some MORE dissatisfied are things like:

  • poor pay
  • poor compensation
  • poor work conditions
  • lack of promotions
  • poor benefits offering
  • lack of job security

Curiously enough, if you were to fix all these factors, you’d still not get a satisfied employee.  If you fixed everything above, you’d have an employee sitting somewhere in the middle of the satisfaction scale, so they would be neither satisfied nor dissatisfied.

The factors that make an employee MORE satisfied are things like:

  • good leadership in the organisation
  • good relationship with their manager
  • recognition for their achievements (not necessarily monetary recognition)
  • advancement in their careers
  • personal growth and development
  • feedback and support (meaningful feedback, not just naked criticism)
  • clear direction and objectives

So there is a lot that can be done on the positive side to increase satisfaction.  Naturally, there are of course many opportunities on this side of the house where a good talent management solution can helps things along.

Posted in engagement | Tagged: , , | 11 Comments »

 
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