Retention Strategy: Meaningful Motivation

Retaining and developing existing talent can be more important to an organization and less expensive than acquiring new talent.

Unfortunately, even if an organization already is focused on retention, chances are good it is following a misguided and expensive compensation approach. "Misguided" may seem like strong criticism, but while extrinsic rewards of money and benefits may cause a short-term burst of productivity, they often don't motivate. Further, they also contain the seed for demotivation long term because, once compensation is awarded, it becomes expected. So when revenues dictate that bonuses are smaller, people aren't just unmotivated, they are actually demotivated, making them less satisfied overall with their jobs and, subsequently, the organization.

This finding is at the heart of the work of Frederick Herzberg, who is known in organizational development circles as the father of modern motivation. Herzberg didn't say appropriate compensation isn't necessary. It is. In fact, Herzberg found that while the presence of certain basics such as good working conditions and an appropriate salary didn't motivate or increase job satisfaction, their absence contributed significantly to job dissatisfaction.

Herzberg's research makes it clear that monetary rewards don't motivate and don't compensate for ineffective management. Real motivation comes from work in the form of achievement, recognition, meaningful work, responsibility, advancement and growth.

Managers can't always change the work itself, but there are practical and simple steps they can take to provide a more motivating workplace and manage in a way that changes the relationships employees have with their work, their managers and their organizations.

Leverage the Power of Human Nature

Humans are natural problem solvers. We like to figure things out and determine how things should be done, especially when we're the ones doing them.

This is why when talent managers give people the opportunity to express their opinions and provide input into work processes, they enhance buy-in and ownership, effectively using human drive to an organization's advantage. People who feel ownership of their work are likely to find that work more meaningful than people who have no say in how things are done.

For example: The next time a talent leader assigns a project, make sure that leader knows that people clearly understand the desired end result and the parameters for the work and also provides the latitude for them to determine how they are going to achieve it. Recognizing this natural human drive to be a part of the solution is a critical first step to motivating people to do their best and enjoy doing it.

Manage Performance and Mentor People

Talent leaders also must recognize this human drive to problem solve in themselves, and then curb it. If a manager is focused on his group's performance, he or she will feel the need to provide answers and solve problems, making employees feel less necessary in the process.

The talent manager's most effective role is to empower and mentor. In this role, the leader will motivate people to do more, and performance will take care of itself. Plus, helping people realize they can perform job tasks with less help enables them grow personally and professionally while making the managers' job that much easier.

When a talent leader is compelled to provide answers, he or she should ask questions instead. Asking good questions is a great way to help people learn to problem solve and make good decisions. It gives people the opportunity to discover the answers for themselves, which gives their work meaning and provides the right environment for sustainable learning, adding to their personal skill set and growth, which also is great for the organization.

Focus on the Person, Not the Job

When talent managers make people feel like they care more about the work than the employees, it can promote feelings of insignificance. Conversely, an employee who feels his manager's concern for his well-being is more likely to experience the trust characteristic of high-performing teams and organizations.

Talent leaders should take time to get to know their employees. This will not only help to build trust, it will provide invaluable insight into what motivates them. Different things motivate different people. One person might be thrilled about new responsibilities as a project manager, while another might experience a greater sense of achievement when allowed to actually produce the desired end product.

In addition to being sensitive to individual role preferences, it pays to note the varying degrees of structure individuals need to be happy in those work roles. Some people need and prefer more direction and clarification than others. This is especially true in ambiguous or uncertain situations.

To assess individual need for structure, ask people to write down questions they have about their jobs. Someone with lots of questions probably needs more structure, while the person who has few questions almost certainly needs less.

Show Up When Things Are Going Well

Being the human problem solvers we are, it's natural for a manager to intervene more often when something is not working than when things are going smoothly. Unfortunately, in this type of environment, employees soon begin to fear every conversation with managers, viewing them as people who show up only when there's a problem.

Brain chemistry research shows this fear of criticism actually triggers the fight-or-flight response, bathing the brain in fear hormones that increase defensive behavior and actually inhibit learning. Talent managers that only talk to employees when something's wrong end up with defensive and withholding employees, and fewer opportunities to uncover the information they need to know about workers and their performance.

To avoid this common scenario, talent leaders should intentionally make time to recognize employees for what is working. Schedule regular meetings where people are invited to report their successes. This structured recognition date will prompt employees to look forward to seeing the talent manager, motivating them to share everything necessary about their performance, as well as how to mentor them and help them achieve even more.

Plus, in the process of learning what's working, the manager also will learn what's not working. But the interaction starts with attention on what the person is doing right, which creates an atmosphere in which people are more open to suggestion and learning can take place.

Publicly Recognize Great Performance

In addition to making time to let employees tout their own achievements in private, public recognition helps to reinforce a sense of accomplishment and accountability. When people are publicly recognized for a job well done, they experience that sense of achievement all over again, which makes them eager to get back to work and tackle the next problem even more skillfully.

When a manager sees good problem solving and decision making, he or she should acknowledge the success privately and in front of others. Timing is important, so don't wait for the annual awards banquet. Making public recognition spontaneous and frequent will motivate everyone, create an environment that supports and encourages ongoing learning, achievement and accountability for all. This motivational culture is good for the employee, the manager and the organization.

But when attempting to recognize and motivate employees to do better work, talent managers should ask: Will my actions contribute to the person's sense of achievement or recognition? Do they fit their individual preferences? Will my actions enable him or her to grow and be prepared to take on more responsibility? Do they make the work more meaningful?

If the answers to any of these questions is no, talent leaders should recognize that while they may make the person feel rewarded for a job well done, they probably won't achieve the long-term motivation they're looking for.


[About the Author: Chris Musselwhile, Ed.D., is president and CEO of Discovery Learning Inc. and author of Dangerous Opportunity: Making Change Work.]

Rewards & Recognition: Time to Pay Up...And Fast

Given today's economic and demographic challenges, HR practitioners will be narrowing the focus of recognition while expanding the scope.The nation is in an economic downturn that experts believe will be with us for the next few years, if not longer. No matter the industry or the region of the country, more and more companies are being forced to do more with less.

Consumers are buying fewer products and services and putting off nonessential purchases. Capital expenditures by businesses are being reined in and, in some cases, cut altogether. Every expense is being scrutinized, because savings go right to the bottom line.

Organizations are changing their business strategies to align with the new marketplace realities. In the "old days," when customers requested "better, cheaper, and faster," companies would respond with "pick two." Today, it's a business requirement for these same companies to accomplish all three.

There has been an unexpected positive consequence of this new reality: A greater number of business leaders outside human resources better understand that customers buy products from companies, but form relationships with people.

And it's these same people -- the employees -- who have the ability to create and enhance the kind of customer loyalty and retention required for survival in today's rocky economic times. Most CEOs understand how the Pareto Principal relates to their bottom line -- 80 percent of sales come from 20 percent of the customers.

More of these same senior leaders realize a new truth; that 80 percent of business outcomes can be directly traced to the efforts of 20 percent of the employees. These "A & B players" and "high performers" are being counted on more than ever to meet and exceed customer expectation.

Narrowing the Focus

The ultimate goal of reward-and-recognition approaches is to find, keep and motivate employees through a variety of organizational interventions. These can include tangible and intangible rewards, cash compensation, benefits, recognition approaches and employee-involvement and motivation strategies. But when it comes to allocating resources to fund these rewards programs in 2009, companies will need to narrow the focus while, at the same time, expand the scope of recognition.

All employees want to be rewarded for their performance, no matter how much, or how little, they actually contribute to the success of their organization. But "C" players (who can make up as much as 75 percent of the employee base) often do acceptable -- or minimally expectable -- work and are often happy to have and keep their job, let alone receive additional rewards.

Pay-for-performance requires companies to differentiate between their superstars and their under-performers. And based on recent national research on employee satisfaction, engagement and retention, most companies have a long way to go.

According to the 2008-09 Employee Hold'em National Workforce Engagement Benchmark, 50 percent of self-identified "superstar" employees are fully engaged with their organizations. These hard-working employees are ready, willing and able to go above and beyond customer requirements and plan to stay with the company if they're offered a little more money to go somewhere else.

Why? Because they are more likely to believe they are fairly rewarded and recognized for their contributions to the company's success, feel that excellent performance gets rewarded in their organization and believe their manager ensures the best employees receive the greatest rewards. Another study recently conducted by Leadership IQ indicated that 47 percent of high performers are actively looking for new jobs by posting and submitting their resumes and even going on job interviews. Companies need to "pay up" with alternative forms of rewards and recognition.

Finding Alternatives

Employers cannot afford to lose their best workers, who get the job done on time, on target and on budget. The best workers are given the toughest assignments because they have shown an ability to get the job done. They work on the hardest accounts due to their abilities in handling difficult clients. And they're often asked to "learn on the job" due to their ability to swim while others sink.

How do most companies reward these vital resources, these assets with feet? By giving them a performance increase that is only 2 percent or 3 percent bigger than the marginal employee sitting in the cubicle next to them received. Seniority pay, merit pay, incentive pay, team-based pay, skill-based pay and outcomes-oriented pay just don't cut it, especially when companies can barely afford their cost-of-living increases.

That's why more and more companies are going to be looking at alternatives to compensation and spot bonuses to reward their best and most dependable workers. Providing training and development, work/life balance and opportunities for advancement are three of the effective rewards for today's and tomorrow's hardest-working employees.

Going forward, consider this: You should be training the best employees so they can leave, or else they'll leave. That's right. Train them so they can leave, or else they'll leave. They're going to leave anyway. The average employee has 13 to 15 jobs over the course of his or her career, seven by the time they are 30 years of age.

However, when companies provide training and development opportunities on a consistent basis, these superstars will stay longer, work harder and recommend the organization as a great place to work. And aren't those exactly the kinds of behaviors that a pay-for-performance system is supposed to elicit from top employees?

Whether it's a result of the expectations of their managers or the demands they put on themselves, high performers in an organization know through experience that they won't be working only 40 hours in a week. They show up when they are needed, and stay until the job is completed. They're willing to give up some personal time in order to satisfy the needs of the job. But they expect payback as well.

Managers who want to keep their top performers retained and engaged will need to recognize the importance of their personal and family life and be flexible when the pendulum swings to the family side of the question. Managers will need to ensure that top performers are given the freedom to balance work and family responsibilities without hindering their career progression. And they'll need to be sensitive to the needs and problems of these employees when they arise.

Employees will continue to want the ability to move up and move over or they're going to move out. Many front-line supervisors and managers are reticent to let their best employees transfer to another division or department. The reason is understandable; the supervisor's performance review (and pay) is often based on the productivity or throughput of their direct reports.

More and more companies will be training their supervisors to be "engagement agents" for these top performers, providing career mentors throughout their employment. In the past, companies have pigeon-holed their best employees into the jobs they were "hired to do." When half of these workers are open to job offers from other companies, or are actively looking for them, this practice has to end. It's time to pay up. And fast.

Expanding the Scope

And finally, a few words about expanding the scope of recognition. Believe it or not, many companies still think about recognition in terms of the anniversary card hand-signed and delivered by the senior executive, the "five-year pin" given out at the annual awards luncheon or the gift catalogue the 10-year employee chooses from as acknowledgment of his or her continued tenure. Granted, these are worthwhile endeavors that all employees share in, even the three-quarters who are "C" players in the typical organization.

So, how are the best companies taking this one step further? They're doing it by recognizing the importance of daily satisfaction and ethics, diversity and safety. Companies that understand employees quit a boss and not a company are working hard to ensure that employees have a good relationship with their immediate supervisor. They're attracting talent by making certain there is a good fit between the applicant's skills and interests, and their job. And they are making sure that each job provides a feeling of personal accomplishment.

Today, companies better understand the critical nature of ensuring an ethical environment for their workers. Employees are less willing to cut ethical corners for short-term profits or modest improvements in a company's stock price. They are less willing to look the other way regarding issues of favoritism or unfair treatment of employees.

And today, providing a safe and secure workplace is no longer a "nice to have," but is more like a standard table stake in poker. Employees understand that, although compliance and ethics may lead you to the same place, compliance is based on things you have to do, while ethics are things you want to do. The difference in one verb makes all the difference in the world.

The year 2009 is going to be a difficult one for an increasing number of businesses. Decreasing revenues, shrinking profits, pressure from shareholders and competition from new and emerging markets are going to test the mettle of even the most solid companies.

Companies must continue to narrow the focus of their rewards programs to target the employees they count on most while expanding them beyond the typical merit-pay and spot-bonus programs many used to rely on. And by recognizing the importance of daily satisfaction and ethics to all employees, companies can improve the performance of all employees.

It's the old Fram Oil Filter commercial, with a twist: "Pay me now or pay up later."You make the choice ... or your employees will make it for you.

Ref: Marc Drizin
[About the Author: Marc Drizin is founder and chief instigator of Noblesville, Ind.-based Employee Hold'em, which provides talent-retention solutions and corporate training services. He is the author of Workforce Engagement: Strategies to Attract, Motivate, and Retain Talent, and a second book, Employee Engagement Fundamentals: A Guide for Managers and Supervisors. ]

Salary vs. Compensation - HR practices

Salary is not the whole, but only a part of the greater compensation package. Here's how managers can tout the compensation package to attract talent...

Key learnings:

• The whole compensation package is a better recruitment tool than the lone salary component
• With tools like "rewards on board", both recruiters and recruits can ascertain the real value of the benefits on offer.

Economy may not be riding the high tide exactly, but it holds promise for recruiters as well as the worker population. While organisations are opting for lay-offs and job cuts, experts and industry observers say the effect will not be lasting. Every job position that has been cut is sure to be filled up at a later stage. This is reason enough to encourage recruiting managers to plan their strategies well. When it is time to recruit again, managers are likely to be surrounded by a talent pool that has never looked as promising ever before. A positive aspect of the lay-offs and job cuts is an assurance of better talent availability in future. While this may sound a little farfetched, recruitment managers must brace up for the occasion nevertheless.

Attracting talent in these economically gloomy times is a tough act for recruitment managers. While the demand for talent is more now, resources have become limited. Therefore, recruitment managers need to plan their strategies to counter the mismatch between demand and means to meet the demand.

Better positioning

Positioning is not a term restricted to marketing. Its relevance in the human resources function, particularly recruiting, cannot be undermined. Thus, the need to position jobs in order to attract the right talent is important to ensure that managers get to choose from the best.

Positioning in the context of recruitment is about the way managers project the employment contract they have chalked out for a given position. Typically, managers have flaunted only the salary component in the name of employment package. However, experts and industry observers feel that it worked well in the heyday when the worker population was placed comfortably and had little to worry about since every job offer looked equally good, if not better. But today, when the sheen has worn off and the scene is not as promising as it was before, recruitment managers have to bolster their salary figures with the complete compensation package. Attracting talent by projecting just the salary seems less effective with employees seeking better overall bargain and salary figures capped owing to strained corporate budgets. In addition, compensation packages seem to be the only differentiating factor between employers as there is no room left either to lower or raise the existing salary levels.

The whole, not part

Recruiters have a major role to play in these tough economic times. The responsibility of convincing the recruit about the value of the benefits that an organisation is offering lies entirely with the recruiter. Incorporating benefits such as health programmes, stock options, and telecommuting and flexi-time choices can help recruiters create a wholesome compensation package that may lead to better talent.

Aon Consulting, a Chicago-based HR and risk management consulting firm, has developed a tool called "rewards on board" that enables both recruiters and potential recruits to calculate the value of the benefits offered. It is a web-based tool which helps ascertain the real worth of benefits. However, the downside is that it fails to account for intangible benefits like flexi-time, strong corporate culture, organisational climate and quality of workplace relationships. The onus of projecting these alongside other traditional benefits lies with recruitment managers. If managers underplay the intangible benefits, they risk depreciating the overall worth of the compensation package. Hence, they need to plan their job positioning strategy skilfully.

With worker profile changing and baby boomer population retiring, the "rewards on board" initiative gains greater relevance. The new generation of employees is more drawn to jobs that offer them enough time to pursue hobbies or be with friends and family. Thus, recruitment managers have to be sensitive to the changing needs of staff and offer them a workplace that can enhance productivity and get the best out of them.

Feeling the pulse of the worker population is critical to ensuring better staff productivity. Organisations have to emphasise the strategic nature of recruitment as a function, and keep their recruiter force active and inspired to use the best tools for attracting and retaining the right talent.

Ref: TheManageMentor.

How to Retain Talent in India

Over the years, researchers have proven that when it comes to retaining employees, money does not buy happiness. Most human resources professionals know that while workers welcome pay raises, the boost in satisfaction that comes with extra money typically does not last, nor do raises alone keep employees loyal. So it is too with recruitment: Competitors can lure employees away from other companies by offering better compensation, but the glow of more money wears off quickly without other rewards. Yet if research shows that attention to pay and benefits is necessary but not sufficient to retain talent, why do many corporate leaders continue to use compensation as their primary retention tool? And what should they really do to keep their best people?

This is a particularly urgent question in emerging markets such as India, where both local and global employers are clawing for talent. In 2007, a team of researchers from Villanova School of Business and from Right Management, a human resources consulting subsidiary of Manpower Inc. that is based in Philadelphia, Pennsylvania, embarked on a project to learn more about the nonpecuniary rewards that drive employees to stay with a company or to flee. They chose the booming Indian labor market and examined the talent management practices of 28 companies operating in India; the researchers surveyed 4,811 of those companies' employees about their attitudes toward their employers, including their intentions to stay or leave. Jonathan P. Doh, Stephen A. Stumpf and Walter Tymon of the Villanova School of Business, along with Michael Haid, a global center of excellence leader at Right Management, describe the team's findings in a July 2008 working paper, How to Manage Talent in Fast-Moving Labor Markets: Some Findings From India. At Villanova, Doh is the Herbert G. Rammrath Endowed Chair in International Business and an associate professor of management and operations, Stumpf is the Fred J. Springer Chair in Business Leadership and a professor of management and operations and Tymon is an associate professor of management and operations.

In India, despite salary increases averaging more than 15% annually in some industries, annual turnover rates among young professionals are averaging 15% to 30% and go as high as 50%. The explosive combination of ballooning salaries and rising attrition signals a tight market for talent that could constrain India's growth in the future. Many factors that affect turnover rates are beyond an employer's control — unfavorable demographics and the larger global economy, for instance. But of the factors that an employer can control, four emerged as most important: performance management practices, professional development practices, the quality of supervision and the company's socially responsible posture. In turn, the researchers discovered that these four factors drive two key employee attitudes — an employee's satisfaction with and pride in the organization. When satisfaction and pride are at high levels, employees are likely to stay.

The best companies drive employee satisfaction and pride by providing management support, training and professional opportunities early on, says Doh, who is director of the Center for Global Leadership at Villanova. Just how early? In the high-velocity Indian marketplace, the new employee honeymoon is so short that employers should start an employee's professional development plan on his or her first day, the authors advise. "Our findings suggest that even six months from the start date is probably too late," Doh says. "[At that point] the employee is already making decisions about whether to stay around or not.

"Those early years — from two to five — are the most difficult ones in which to keep employees and the most expensive in which to lose them. If employees don't get management support and professional opportunities during these early months, Doh says, "they begin looking around for other organizations that can provide [them]."

The study also showed that employers should target high-potential employees extremely early in their tenure and create accelerated development plans for them. "Our research suggests that … at an earlier point than people expect, it's too late," Stumpf adds.

Employee development plans alone are insufficient, however. Young, high-potential employees demand active management support. First-line managers are often not equipped to provide the kind of support that the research indicates is critical to employees' decisions to stay or go. The authors recommend that companies simultaneously invest in training front-line managers so that new employees get the kinds of managers who can help them thrive. Indeed, the research showed that management support is pivotal in an employee's decision to stay or not, Stumpf underscores.

Management support, performance management and professional development — each of which are targeted at an employee's personal contributions — contribute to both employee satisfaction and pride. A fourth variable — the company's socially responsible position and reputation — also shapes employee pride and satisfaction.

While the research is clearly pertinent for companies operating in India, Doh says managers in companies everywhere should apply the findings, regardless of whether they're operating in a high-turnover environment or not. "We're in a global war for talent," he says. "Any company interested in accessing the labor force in India or another developing country needs to pay attention to these findings." What's less obvious is that employers operating in slower markets, such as the current U.S. economy, should also heed the research. "No matter what the environment, employees care about nonpecuniary rewards — pride, satisfaction, the support of the management team," Doh says. "In slow times, it's a mistake to cut back on those aspects."

Ref: A brief synopsis of How to Manage Talent in Fast-Moving Labor Markets: Some Findings From India (working paper, July 2008) by Jonathan P. Doh, Stephen A. Stumpf, Walter Tymon and Michael Haid