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works. The result was a list of “key drivers of retention success” that included:
Balance a culture of caring with a tradition of excellence.
Resolve conflict with a “stair-stepping process” that allows employ- ees to bypass their immediate supervisor.
Take stock of the turnover rate, then take action.
Focus on the star performers.
View people management as a strategic business issue.
Pursue improvement relentlessly.29
Probably the best place to start paying attention to retention is to find out why people leave their jobs in your organization. Some of the top reasons across all industries include lack of job satisfaction, lack of challenge and interest in the work, dissatisfaction with their leadership or with the organization’s image and overall position, and incompatibility with the work group.30 Professional employees have additional reasons to add, such as lack of talent development, apparent lack of trust by supervisors, lack of genuine involvement, perceived lack of objectivity and fairness in the organization, higher management’s disregard of or disinterest in human relations, and disproportionately low compensation.
Most important, according to the Society for Human Resource Man- agement (SHRM), is to remember that retention comes from building emotional bonds between the workers and the employer. These emotional bonds are strengthened when managers pay attention to issues that are important to their employees.
Orientation
Day one is a good time to start building those emotional bonds. For an employee to get off on the right foot and feel comfortable in his or her job, a thorough orientation must be conducted. New employees who feel lost, ignored, or inadequately prepared tend to bail out quickly. And employees who were hard to find in the first place have many available alternatives and they will leave if they feel uncomfortable.31
The orientation should be done as though the new employees will be staying for 20 years. Frequently, because of short staffing, new employees are hustled onto the project unprepared. Ideally, an experienced staff person should be their mentor, but only if they want to do so. Employees who are forced to orient new employees but do not want this responsibility will do a poor job. Nothing makes new employees feel more welcome than to have a mentor take an interest in them.
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Make sure there is congruence between the orientation and the actual work setting. A new employee should not come in expecting the greatest job in the world, only to find the actual job far different than the one described. If the orientation’s aim is only to get the employee working as quickly as possible, then this recruitment effort will be a failure. It is rare for employees who have not been properly oriented to develop a sense of loyalty toward the organization.32
Part of orientation should be to introduce new staff to the corporate mission statement and strategies and help them internalize the meaning behind the words. Set up times when mixed groups of new and old employees meet and review the mission and strategies, and offer the opportunity to ask questions or provide feedback. By bringing together the new and old employees to discuss the main goals and values of the organization, you will ensure that everyone understands them and also build a sense of camaraderie. Such dialogue leads to a refreshed enthu- siasm for fulfilling the organization’s mission.33
Many companies skimp on retention activities because they are afraid that, once you start to develop good project managers, those managers will sell their new skills to a new employer at a higher price. Obviously this does happen, but it can be addressed through attention to the terms of the employee “contract.” Companies that wish to retain project managers must pay the market price to do so — including costs of r etention programs. If they wish to ensure that employees stay until the end of a project, they can write suitable incentives into project managers’ contracts.
The true challenge is to recognize the economic value of project managers and to change contracts of employment accordingly.34
To discover what those contracts should include, we can look at three areas crucial to retention — rewards, benefits, and organizational culture
— starting with the least important and working up to the most important.
Rewards
Financial compensation alone, the factor that is easiest for employers to adjust, may have the least effect unless the problem is severe. People will tolerate a slight perception of being underpaid more than they will a bad job — even a bad job in a great company.
Probably the biggest surprise in human resources research over the past decade or so has been the consistency with which compensation comes in last as an important consideration in how people feel about their jobs. Technical workers especially are less likely than those in other fields to be lured away by more money. Competitive compensation may be of importance initially, but it comes in third behind career growth and training and development where retention is concerned.35
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Money is the most common extrinsic reward but it does not make people passionate about their jobs. Intrinsic rewards, however, can gen- erate the kind of passion required to make them achieve high levels of performance. Although knowledge workers can be motivated with extrin- sic rewards, the evidence suggests that intrinsic rewards are more effective motivators. These include technical challenge, opportunity to pursue research interests, flexible career paths, the challenge of project work, and the sense of entrepreneurship.
But reward systems also need to motivate performance with extrinsic rewards. Because high performers can make substantial financial contri- butions to the company, reward systems must be flexible enough to reward them commensurately with their contributions. Many companies ar e replacing the traditional narrow salary ranges with broad salary bands.
They also reward cross-functional and team performance, create pay-for- skills plans, and provide bonuses based on company profitability.
Fairness is also important to high performers, so internal pay equity should be carefully managed. Rewards to technical staff should be attached to performance targets rather than activity cycles, and these targets should include team performance.36
Unfortunately, organizations have not figured out how to effectively reward teams and team members. Project managers would love it if there were a correlation between the performance of project teams and the rewards those teams receive, but such correlations do not usually exist.
A study of 87 project teams showed that the current method of rewarding teams and team members is primarily a qualitative assessment of how well the team is meeting the traditional cost, schedule, and performance goals. And in the absence of adequate project performance metrics — a problem in many companies — this means that rewards are based on the
“gut feel” of a manager about how the project is progressing. This is a self-reinforcing cycle because when project managers responsible for teams are not being rewarded for their team-building efforts, there is a decrease in their motivation to make team building and teamwork a priority.37
The most radical — yet most obvious — change is to base all perfor- mance appraisals and review systems on the team, and make the team accountable for team results. For true teamwork to occur, people need common purposes, measurable goals, and a common fate. Thus, moving toward a project-oriented organization means creating a team-oriented appraisal and reward system. Because the team is in the best position to control the task, the team should be the primary focus of any performance measurement. Functional expertise is very much a prerequisite to team participation but it is appraising performance based on the team’s results that encourages people to wear two hats.
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Glenn M. Parker of human resource consulting and research giant Watson Wyatt recommends reward structures that foster collaboration, in which individuals are acknowledged, but primarily for being strong team players — those who “help the crowd stand out, rather than standing out from the crowd.”38
Benefits
Benefits have typically been viewed as a necessary evil, but it is time that companies make friends with them because, even more than direct com- pensation, benefits express how a company cares for its employees. The credibility of the organization is, in part, measured by how well benefits promises are delivered. Some benefits are more powerful than others in saying that “the company cares about you.” Topping SHRM’s list of effective retention practices are health benefits, competitive vacation and time-off programs, retirement plans, flexible work schedules, and training and development.
To address the issue of retention, employers are offering what have been traditionally viewed as management perks to rank-and-file employ- ees. These perks focus on quality-of-life issues faced by today’s workforce:
flexible work schedules, educational reimbursement, elder care benefits, and a host of employee conveniences such as on-premise laundry and dry cleaning services or fitness centers. While these popular benefits are typically of little cost to the employer, they provide employees with options that can simplify the pressures faced by today’s working families and are thus deeply appreciated.39
How can companies determine what to offer? Too often, benefits packages are based on what the competition is doing, leading to a “me- too” approach that does not necessarily reflect the needs of the employees.
Few organizations actively survey their population to deter mine whether the programs address employees’ needs. Less than one third of high-tech companies reported conducting a benefits-related attitude survey in the past two years. This is unfortunate because retention practices work best when tailored to the needs of each type of worker. Companies should develop flexible packages of benefits that fit the employee demographics (age, gender, marital status, and number of dependents, etc.). When deciding among benefits of equal cost, employers that look at the value of the benefit in action can maximize the payback. If, for example, a high percentage of the workforce includes working mothers of school-age children, a comprehensive child-care assistance program may be more valued than tuition reimbursement. Because no single perk will retain professional employees, develop a total package that appeals to a wide
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variety of people. Then communicate it effectively to everyone. Eliminate benefits that are no longer used or valued.40,41