The Employee Retention Quandary

When I was in college, I worked in a manufacturing plant. It seemed to me at the time that the supervisor I worked for valued the products being produced more than the people producing them. His total and complete concern was parts per shift being produced and reduction of scrap. He knew how to run every machine, knew the specs for each part being produced, and he certainly knew every excuse in the book for failing to achieve the expected result.

He was very autocratic in his approach and ruled with an iron fist. A 15-minute break was a 15-minute break and the clock started ticking the moment you left your workstation. Show up a second late and you were docked fifteen minutes. Do it twice and you were written up. Do it three times and you were gone. Miss work without a doctor's note and you might as well go looking for another job. It didn't matter if there was a “legit” excuse or not. It didn't matter if a kid was sick, a spouse was ill or if a family member was on their death bed and needed your help. In fact, if you attended a funeral, it better had been for an immediate relative. If you did take time off to attend the funeral, you had better bring the funeral flyer to work with you when you returned, otherwise you could expect to be terminated.

The rules were the rules, and they were to be followed. If he needed you to stay over an hour or two, you did it or you were on his S___ list. Being on his list meant that when you needed a favor from him, you could count on a stern “No!” Get on his bad side and at every opportunity he was going to ride you and ride you hard. Humiliation in front of your peers was the norm. When there was a conversation or direction given from him it seemed to always be done in a condescending and demeaning manner.

There were no concerns for employee happiness or the development of a culture of success. It was strictly his way or the highway. His way was apparently also the company's way as well. Otherwise, the company would have stepped in and stopped him from leading in such a manner.

As a result of his leadership style, morale was very low. Employees produced what they had to produce and nothing more. Collaboration was nonexistent and loyalty to the company was not even a thought in anyone's mind. If a better offer came along, it was usually taken and in most cases without notice. Turnover was high and sudden.

What was interesting was that the company paid very well. In fact, it was not uncommon for employees to accept employment elsewhere for less money. The need to remove oneself from such a toxic and controlling environment was more of a factor than a dollar or two more per hour could justify staying. Before I left there were talks of unionization, which is always a sure sign that there is trouble in paradise.

That Was Then

That was then, which was quite a few years ago. I think everyone would agree that work conditions and organizational cultures have improved in most companies. However, and by all reports, we are hearing about employees jumping ship at rates never before seen. That poses the question, why?

It is true that conditions have changed, and many organizational leaders and managers better understand the importance of morale, culture, and employee relations. Leaders also understand that results are at their highest when employees are engaged and working together with leadership to make a better and more successful organization.

Most understand that leadership will need to make tough decisions from time-to-time that not everyone will agree with. Otherwise, things stagnate, and the organization becomes paralyzed. However, different in years past, this is not the everyday operating standard. Collaboration and shared responsibility for the organization's success is viewed as critical to the overall health and wellness of the organization. Embracing the notion that people, not products, are your most important asset is absolute.

What Gives?

Many employees spend more time at work than they do at home. Therefore, the work environment certainly needs to be safe, encouraging, and positive. It is also important that healthy, supportive, and collaborative relationships are fostered. Work needs to be a place where people want to be. The work environment also needs to be one that fosters growth and the pursuit of personal and professional goals.

People want to know that their employer cares about them not only as professionals, but also as people. These factors may have more of an impact on employee retention than pay. This is not to say that pay does not matter. People want to be paid a fair wage. However, working for an employer that cares and is willing to give them responsibility and authority for their role in an environment as described above may contribute more to employee retention than pay.

We’ve all heard stories about companies like Google, Southwest Airlines, Intuit, and Apple. Each have experienced incredible success and attribute much of it to the organizational culture that has been developed. In these companies’ employees describe their work as rewarding, fulfilling, and motivating. Employees in environments like these describe the work environment as positive, motivating, uplifting, and challenging. Frequently heard are phrases like, "we have the freedom to explore", and "they really want to help you succeed".

In organizations like these everyone knows and understands the organizational purpose, vision for the future, and the business objectives. They know they have a shared responsibility to make the vision real. Core values and fundamental beliefs are aligned across the entire organization. Everyone is accountable for living and leading them.

The Reality

A strong organizational culture has many compounding factors, such as productivity, product quality, employee satisfaction, employee retention, employee loyalty, improved creative thinking and problem solving. However, not every company has the resources available to create a Google type environment. Not every leader has the capacity to develop a culture like that at Southwest. Quite frankly, organizations and leaders shouldn't try to replicate any of these cultures. It probably wouldn't work anyway. That’s because their culture developed over time and is unique to them. There are little nuances about their cultural norms that you'll never fully understand. Trying to be Apple, Google or any of the hundreds of great examples would come across as forced and disingenuous.

You can, however, learn a little and a lot from each of these organizations and begin to implement those things that have been proven to work and fit within your organization. By doing so, you’ll gain momentum, start to implement your own ideas, and before you know it, you’ll have created a culture of success that best suits your organization. Over time you'll start to realize positive changes in the environment and how people interreact with one another. Then, you’ll see the biproduct, which is improved performance.

Develop An Enabling Environment

In this context, enabling is not entitlement and it does not mean that responsibility is removed. An enabling environment is one in which employees are given the responsibility and the authority to make decisions. Obviously, the decision-making authority is within their area of expertise and their realm of responsibility. When people are enabled to make decisions, they are more motivated to perform at a higher level and exceed expectations. Their loyalty to the organization is higher and they feel more a part of the organization because they see the vision and understand the contribution they are making to the greater good. As a result, they become more supportive of one another, and are more likely to place the needs of the organization before their own in those critical times when the organization really needs their support.

The Greater Good

As important as it is to develop an organization where people come to work and thrive, it is as important that your customers love conducting business with you. By creating a healthy organizational culture your customers will begin to see the same positive changes that you see. However, it will come through better service and higher quality products. As a result, they will be more satisfied and more likely to spread the word. We all know what happens when customers talk positively about a brand to their network. Business booms, support increases, and revenue problems become problems of meeting demand.

There are fundamental aspects of a business that are also foundational. Without a strong foundation in each of fundamental aspects of business a business cannot thrive and will never achieve its full potential. As much as operations, finance, marketing and business development are foundational, so too is culture. One could argue that culture drives the others.

Culture development has a certain compounding effect that any leader would be foolish to ignore. If you think you don’t have time to spend on culture development because you need to work on business development, ignore it and watch what happens. You may find that your time has shifted from developing the business to searching for people. Once that happens, it is just a matter of time before quality, service, and image take a hit.

Randy Stepp is a Principal with Renaissance Leadership Group. RLG is a full-service business and franchise development company whose purpose is to help business owners realize their dreams of independence and freedom.

Visit Renaissance Leadership Group at www.renaissanceleadershipgroup.com to learn more about business development and franchising