Keeping the People Report
LB@keepingthepeople.combullet (913) 620-4645bullet http://www.keepingthepeople.com
E-Letter Volume 9 Holiday Issue, 2006


Leigh Branham,
Founder/Principal,
Keeping the People, Inc.
     
       

In this issue:

  • Managing the Give and Receive
  • Reader Reaction on Satisfaction & Engagement
  • Wall Street Journal Column Stirs Debate
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Reciprocal Commitment: 'Tis Always the Season to Give and Receive

If there's anything Ebeneezer Scrooge from Charles Dicken's A Christmas Carol and Mr. Potter from Frank Capra's classic movie, It's a Wonderful Life have taught us, it's that penny-pinching and the pursuit of profit above all are not the way to true success.

In researching the practices of "employers-of-choice" and Fortune's Great Places to Work for the last dozen years, I have found that most of them have adopted a "give-before-getting" philosophy toward their workforces. In other words, they tend to operate on faith (and experience) that if they are generous with employees, whether by giving more training and coaching, providing more work-life benefits than expected, paying above market, providing better resources and equipment, their employees will give back - with increased effort, dedication, and commitment. Companies like Southwest Airlines, Whole Foods Market, SAS Institute, and Smuckers are built on this principle, which, it turns out, is a sound business model. Yet many companies still operate by an opposite principle - "if we give, they will just take advantage," and so they withhold giving, and employees feel deprived, and withhold effort and commitment.

Recently, I had the opportunity to engage in a dialogue with several senior executives on this very topic. When asked "what are your thoughts on the philosophy of 'give first, get second'?", most said they agreed with the concept. But there were these voices of concern:

  • "I agree with the approach, but management must also be prepared to mentor and deal with the underperformers who are only 'receiving and not giving.'"
  • "We are a much more "get first, give second' type of company...If we did a better job of selecting the right people and trusted that our employees would return our commitment to them with even more commitment to us...this could be great for us."
  • "It is perceived as a risk, that if we give these people perks, then they leave before we get the value back."
  • "We are seen as cheap, from the perspective of not spending money on the employees, our work environment, improving the tools and equipment."
  • "We are a much more "get first, give second' type of company...If we did a better job of selecting the right people and trusted that our employees would return our commitment to them with even more commitment to us...this could be great for us."
  • "In general, I don't think our employees think we give first...I think the sentiment is more the opposite-give to the company first, then see what you get in return."
  • "I don't think this matches well with our philosophy. We are very focused on the bottom line. That means we don't think of giving until we get. Even after we get, we often mark that up to additional margin and don't think about re-investing this margin in the company."
  • "My impression of today's college graduate is that they want much more now and if you are not willing to give first, get second, you aren't going to attract the people you want today."
  • "The philosophy seems to be, 'you work, we pay you.' That's balance."

    Whoever gives first is taking a risk that there will be no reciprocity, or that the receiver will only come to feel entitled to receive more and more, especially in a time when younger workers have leverage in the job market and are in a position to ask for and receive more of everything.

    Most of us would probably agree that reciprocal commitment works, not just at Christmas time, but year-round, both as a personal philosophy and as a good business practice.

    But how do we deal with the issues of greed, entitlement and excessive self-interest that can so often undermine our best intentions?

    Question for readers: What is your organization's give-get philosophy and how do you approach these challenges?


  • Reader Reaction on Satisfaction & Engagement

    In the Summer, 2006 issue of the Keeping the People Report, I commented on the SHRM job satisfaction survey released in June of this year that reported pay and benefits as the two most important factors in employee job satisfaction. I observed that asking employees to rank a list of 21 possible satisfaction factors may not really help us identify on-target strategies for motivating or retaining them.

    If all we want is "satisfied" employees, then paying more and providing more benefits may be the way to go. But I believe that most managers are more interested in what makes employees "engaged"- willing to give more than minimal energy and enthusiasm to their employer and its customers. That's why I write and speak about the root causes of employee disengagment and turnover. A key part of the mission of Keeping the People is to shine a light on the "hidden" human needs of people at work that create engagement when met and disengagement when not met.

    After asking for readers' opinions, here's a sampling of the reaction I received:

    "While fair pay is necessary to 'be in the game', it is not enough to keep employees engaged. I am disappointed with the (SHRM) survey results.

    "This was a great article and I agree with you. I think companies have used the slow economy (and resulting tree-hugging) as excuses to inadequately reward and value associates. Productivity on a nationwide basis is very high but that has come at the expense of associates who are being stretched too thin and expected to accomplish goals without the adequate time or resources.

    The backlash to that corporate strategy maybe what is now driving so many people to say that pay and benefits are important. I think associates are now looking to make up ground in salary and benefits by leaving, but not just for the money. I think it is also "pay back" for how they were treated post-2002.

    Putting the focus primarily on the tangibles takes the spotlight off leadership and management. Most leaders do not fully endorse the concept of 'looking in the mirror' and this just gives them more justification to continue in that fashion.

    "There is no doubt in my mind that you are absolutely on the right track. I have never left a job for more money; it's always been because I felt undervalued, unappreciated, and did not have the opportunity to do what I do best, or to use my gifts and skills. I also had no mentor or anyone who cared about my professional growth and development. I may have been "satisfied" in that my paycheck and benefits were adequate, and the office environment and commute were acceptable, but that is far from being truly "engaged." It astounds me that so many employers do not understand these issues and are perplexed at the unhappiness and high turnover rate among their employees.

    "I'm a headhunter.... I've got to say you've got it right. I must tell you, what I hear from candidates I recruit and what you point out in some of your writings is dead on-pay and benefits are pertinent, but it's the other intangibles that form the basis of my leverage."

    In response to the question, "Should we be measuring employee satisfaction or employee engagement, and why?" there were these responses:

    "We absolutely should be measuring engagement (if the executives can define and understand it), and not satisfaction. I support this answer with one simple truth: no one is ever satisfied, so why chase measuring it? Every employee, including the owner, is always seeking "more" - more money, more recognition, more feedback, more status, more whatever - so by definition, employees are not satisfied. To what degree they are engaged ultimately determines their contribution and value to the organization, and will ultimately determine their retention or loss to the organization. I agree 100% with you."

    "Perhaps the distinction is not actually when then leave, but when they make the decision to start looking. Dissatisfaction may lead them to start looking for another position, but pay or benefits may be the deciding factor in the decision to make the move. Therefore, they are able to justify the story they give in their exit interview.

    I currently have a job that I love, but there are some political factions that I will never be able to overcome and they have led me to the decision to look for another position. Which position I choose will be based on multiple factors, including compensation and benefits, but I have decided I will tell the truth in my exit interview in the hopes that someone else won't go through all that I have in the last year.

    I also asked, "If we know that many satisfied employees are not engaged, is it relevant and useful to measure employee satisfaction?" and received these comments:

    "While it is ok to start with this data, I would not recommend stopping there!"

    "Loved your letter and could not agree with you more...I think it is important to measure both (satisfaction and engagement). Job performance will be affected by the satisfaction and the motivational (engagement) level of the employee! Here at our company we are struggling with both!"

    "Not every employee will be engaged... Satisfied to me is the middle of the road. They may not be leaving, but they are there still performing."

    I also posed a question related to SHRM's report that 80% of respondents are satisfied in their jobs. I asked "Is this finding consistent with their 2005 report that 30% of employees were actively seeking another job and 45% were passively seeking? And how do we reconcile Gallup's finding that 75% of employees are either not engaged or actively disengaged with SHRM's finding that 80% are satisfied?"

    The responses:

    "Someone shared with me that they previously worked with an executive that taught him that everyone is always looking (for new jobs), just in varying degrees of intensity..). I argue that's true, putting the numbers in the high 90 percentile -- the only exceptions maybe being equity stakeholders in companies that have considerable operating control (and the highly unmotivated employees that don't even consciously think about these things). Those few percentages of people that have those positions probably are not looking elsewhere for employment. Beyond them: who in their right minds would not always be out looking to improve their personal rewards? VERY few people is the answer. Focus on engagement not satisfaction, yes. Why don't we? I think owners are scared of the answers...."

    "The bottom line... Pay and benefits ABSOLUTELY make a difference and do matter. If pay and benefits are marketable and satisfactory to the employee, then management style would then come into play.

    I have recently heard a speaker state, 'People hire on to companies and leave supervisors.' Managers need to realize they are part of the solution and need to take ownership."

    "I think many of us are passive job seekers and it doesn't necessarily mean we are dissatisfied with or not engaged in our jobs. I enjoy my job and the people I work with, but I still scan Monster.com on a regular basis just to see what other opportunities are available. If I have a bad day, scanning the want ads reminds me I have options and makes me feel a little more in control. I'm sure many other "passive seekers" feel the same way."

    I also asked, "What kind of employee survey does your organization use, and why?" and received these responses:

    None, and we absolutely miss the boat here. We spend all of our time asking managers and supervisors to rate employees, usually on highly subjective (i.e., lacking objective) criteria and what we are left with is a "big brother" view of the employees. Totally missing this boat...

    "We measure employee satisfaction through online surveys. The surveys are sent to all employees on an annual basis and on a quarterly basis to a sampling of employees."

    My bottom line: measuring employee satisfaction may still be relevant, but it doesn't go far enough. Employee engagement sets a higher standard, and if we are going to measure ourselves against any standard, it should be the one more difficult to reach and the one that leads to the best outcome for customers and our businesses.

    Your contributions to this ongoing dialogue are welcome! Please send your comments to LB@keeping thepeople.com.



    Wall Street Journal column generates more debate

    Several subscribers asked if I had seen a column in the November 13, 2006 Wall Street Journal entitled "Opportunity Knocks and It Pays a Lot Better," reporting on a survey released by the compensation consulting firm, Watson Wyatt Worldwide.

    The survey of 1,100 U.S. employees, which was co-sponsored by the compensation/benefits association, World at Work, found that "71 of top performers listed pay among the top three reasons they would consider leaving their employers." The report further reported that a parallel survey of 262 employers revealed that only 45% thought pay was a top 3 reason for employees leaving.

    Other quotes from the WSJ article:

    • "The survey found that employers underestimate the retention value of health-care benefits."
    • "Employers have probably gotten caught up in the myth and employees leave their manager or they leave for better opportunities."
    • "Perhaps we are being a little unrealistic about the fundamental element of rewards, which is pay."
    • "For the third consecutive year, employers are reporting increased difficulty retaining employees."
    • "Nationally, the annual rate at which workers quit jobs was the highest last year since 2001, according to the Bureau of Labor Statistics."
    • "Only 61% of companies surveyed by Hewitt Associates offered defined benefit pension plans this year, down from 73% in 2000 and 91% in 1985."

    Given the dramatic cutbacks in health insurance and pension plans, there is no doubt that many employees are more concerned than ever about pay and benefits The loss of paid health care benefits has been alarming, eroding a sense of basic security among many in the workforce. Sometimes, increasing pay and benefits is the key to reducing turnover, and I have recommended exactly that solution to clients in the past when their pay rates were below market.

    But, I disagree strongly that it is a "myth" that employees leave their managers or for better opportunities. The facts from Saratoga Institute's surveys of 19,700 workers over a five-year period reveals that 88% of employees left for exactly those reasons and others related more to culture, lack of job challenge or feeling devalued in any number of ways, while only 12% left primarily for reasons related to pay or benefits.

    Again, I believe we have a problem related to how the Watson Wyatt survey was conducted. Asking current employees why they would leave is not the same as asking departed employees why they did leave.

    Surveys can guide our decisions about what practices to implement to correct and prevent employee disengagement and turnover, so the stakes are high. That's why we should keep in mind that employees are human beings who make emotional decisions to commit to their employers or not commit to them. Let's not forget that employee's needs for career growth, challenge/interesting work, appreciation, feedback, coaching, caring/competent leaders, and most of all-trust-are the true root-cause drivers of commitment, and usually transcend pay except in situations where the employee's economic survival is at stake.

    Perhaps Watson-Wyatt's finding that "only 45% of managers thought pay was a "top three reason for employees leaving" means managers are finally starting to get the message about what employees really want. Again, please weigh in on this issue if you'd like to share your perspective.


    For more information about the following Keeping the People workshops or presentations, please contact Leigh Branham at LB@keepingthepeople.com:

    • The 7 Hidden Reasons Employees Leave
    • Engaging & Retaining All 4 Generations
    • "Engage & Retain!" Workshop for Managers
    • Leadership Training & Seminars
    • Leading Organizational Change
    • Behavior-Based Interviewing
    • Career Coaching for Managers
    • Employee Career Self-Management
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    The Seven Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It's Too Late, by Leigh Branham (AMACOM Books, 2005).

    Keeping the People Who Keep You in Business: 24 Ways to Hang On to Your Most Valuable Talent, by Leigh Branham
    (AMACOM Books, 2000).

    To order either of these books click here.

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    To send this newsletter to a friend, please click here.

    Keeping the People, Inc. helps organizations link employer-of-choice strategies with business strategies, conduct third-party post-exit interviews and surveys, conduct engagement surveys with current employees, and provides the management coaching and training needed to implement those strategies.

    For more information, contact Leigh Branham directly at (913) 620-4645, or by e-mail at LB@keepingthepeople.com. Also visit the Web site: www.keepingthepeople.com.

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    Keeping the People Report
    LB@keepingthepeople.combullet (913) 620-4645bullet http://www.keepingthepeople.com
    13488 West 126th Terrace, Overland Park, Kansas 66213

    Copyright, Keeping the People, Inc. 2005. Keeping the People Report is written and edited by Leigh Branham.