Support and engagement is the key to retention
Retention of top talent is an important concern in both good times and bad. While a soft labor market may have depressed turnover rates in many organizations, retention issues can be expected to surface once labor markets strengthen. Even in the present environment, options are still available to top performers.
Savvy organizational leaders recognize that their best people work for their organizations because they want to, not because they have to, and treat them like 'volunteers' regardless of market conditions.
"Dissatisfaction with pay is not what leads employees to begin exploring alternatives."
While compensation is often a factor for employees when they consider new employment, it is seldom the precipitating factor. Nonetheless, retention strategies commonly focus on compensation, for example, retention bonuses, stock options.
The downturn has made it more difficult to rely on pay to keep key people committed, so how should companies react?
Organizations must focus on two key concerns to retain and motivate their talent: increasing employee engagement and developing systems that provide better support for the success of their employees.
To foster high levels of engagement, companies must make greater use of non-monetary rewards such as career growth opportunities, meaningful job designs, training, and recognition programs. For these measures to be effective, there must be a clear link between performance and rewards in the minds of employees. The best way to do this is to make sure there is clear differentiation in performance ratings between employees. Those differences in performance should be reflected in meaningful differences in pay and advancement prospects.
Hay Group Insight's research shows that high employee engagement alone does not guarantee an organization's effectiveness.
"A good many companies enjoy high levels of engagement, yet still struggle in terms of performance."
What's missing is real employee enablement to position motivated employees to succeed. In fact, our findings suggest that while organizations in the top quartile on engagement demonstrate revenue growth 2.5 times that of organizations in the bottom quartile, companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater. But how do you ensure that you're doing the best possible job of enabling your employees?
"High employee engagement alone does not guarantee an organization's effectiveness, you also need real employee enablement."
The first step is to make sure you're putting the right people in the right jobs, as employees in the wrong role can quickly become disillusioned and unproductive.
In deploying talent, leaders must consider both the requirements of the job and the employee's ability to meet them. They also have to think about the extent to which the job will draw upon the employee's distinctive competencies and make the most of them. It's also crucial to root out bad business practices, such as unnecessary or duplicated work, to ensure that work environments are supportive of high levels of productivity.
Create the right climate
Finally, organizations have to understand and manage the work climate. The benefit of a positive work climate is often underestimated, but our research shows that business results can vary by as much as 30 per cent purely due to differences in the work climate created by a manager. To create a positive work climate, leaders must have the right competencies to engage and enable employees. They have to understand how to give employees the authority to get on with their jobs so they feel empowered to act where decisions are best made at a local level. If organizations succeed in putting these measures in place they will reap the rewards of highly engaged employees willing to go the extra mile to make the organization a success. And harnessing this 'discretionary' effort through enabling work environments will provide companies with a competitive edge that will prove invaluable in helping them to ride out the stormy economic conditions created by the global downturn. It will also ensure that they are well positioned when the upturn eventually arrives.
Six steps to better engagement and motivation
In order to succeed in engaging and motivating employees organizations should:
ensure that there is a clearly communicated link between performance and rewards within the organization
ensure that there is proper differentiation in performance ratings between employees
root out bad business practices, such as unnecessary work and duplication, that can adversely affect employee enablement
put the right people in the right jobs by focusing on job sizing and the kind of person that best fits the role
monitor and improve the work climate within the organization by ensuring that leaders have the right competencies and management styles to motivate employees
focus on non-monetary rewards such as career growth opportunities, development, and recognition programs
Also see retention tools at http://ashusaini.blogspot.com/2010/11/employee-retention-manage-your.html
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