Category Archives: retention

What Happens When Executives Leave

executive exitThat’s what a pair of University of Kansas School of Business professors wanted to find out when they undertook a recent study on turnover at the highest levels of management.

James Guthrie and Jay Lee, professors of human resource management at the school, sought to see how companies perform following the exit of top executives, using data from 367 firms representing 134 industries. According to a UK statement, the researchers’ analyses “examined the relationship between top management team turnover and firm performance, taking into account a number of industry and firm characteristics, including a company’s own performance history.”

Guthrie and Lee found that, “as rates of top management turnover increase, firm performance tends to suffer.”

This may seem intuitive enough, but the researchers maintain that companies can sometimes be too “trigger-happy” in removing corporate leaders, and actually overestimate the positive effects of turnover at the top.

“There is this idea out there that top management teams get too complacent, too committed to the status quo, and therefore shaking things up will improve performance,” according to Guthrie. “And there is a certain extent to which that is true.”

But what firms don’t always count on losing in the process, he adds, is the departing executive’s tacit knowledge—social connections, industry relationships or organizational knowledge, for example.

The implication, says Guthrie, “is that turnover not only erodes performance by depleting organizational skill banks but, perhaps more dramatically, by altering the social structure and fabric of an organization.”

While acknowledging that change at the top is necessary when an executive isn’t performing well enough, “I think a lot of firms take this too far,” he continues, noting that companies can tend to overlook executives’ firm-specific experience and fall into a mindset that change is always a good thing.

Ultimately, Guthrie and Lee concluded that the effects of turnover at the highest levels of management are comparable to those found in studies of turnover at the lower levels of the organization—increased turnover equates to decreased productivity and insecurity in other parts of the firm.

“It’s basically a cautionary tale,” says Guthrie. “Don’t necessarily think that if you’re in a volatile industry, changing people at the top will improve things.”

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Increasing Pay, Increasing Challenges

Not sure how you’ll read this, whether you’re the full-glass or half-glass sort, but this latest survey from Mercer shows pay raises are growing steadily … albeit in .1-percent increments.

180274674 -- pay raiseAccording to the New York-based global consulting firm’s 2014/2015 U.S. Compensation Planning Survey, the average raise in base pay is expected to be 3 percent in 2015, up slightly from 2.9 percent in 2014, 2.8 percent in 2013 and 2.7 percent in 2012.

No leaps and bounds, certainly, but indicative — we’d all have to agree — of a steadily improving economy and job market, no?

Granted, .1-percent increments may not give your employees the wow factors they’re looking for as they mull whether to stick around or try out greener-looking pastures. And this can be especially worrisome when you consider what it will take to keep your highest-performing workers on board and happy.

Which leads me to another survey finding: that the range between increases to high-performing employees and those given to lower-performing employees continues to widen. Specifically, the survey shows, the former received average base-pay increases of 4.8 percent in 2014, compared to 2.6 percent for average performers and 0.1 percent for the lower performers.

“Differentiating salary increases based on performance has become the norm,” says Rebecca Adractas, principal in Mercer’s rewards consulting business. “Investing in those employees [who] are driving organizational performance has become a necessity.”

So has making sure the good ones have more than one reason — pay — to stay.

Mary Ann Sardone, partner in the firm’s talent practice and regional leader of its rewards segment, says employers are also “continuing to provide rewards beyond compensation, in the form of training and career development.”

“Employee engagement and retention continue to be a top priority,” she says.

So, on the glass-half-empty end, if you’re not doing everything you can to figure out who your top performers are, what they want and how you can provide it, you will inevitably be caught with your proverbial pants down.

On the glass-half-full side, at least things are looking up … ever-so slowly but surely.

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‘The 27 Challenges Managers Face’

Bruce Tulgan

Bruce Tulgan

I just came across an advance copy of a book due on shelves Sept. 15 that takes a pretty interesting stab at itemizing and enumerating every key challenge a manager will face in his or her profession. I’m sharing it here — “The 27 Challenges Managers Face” — because I’ve found the author, Bruce Tulgan, CEO and founder of New Haven, Conn.-based management consultancy RainmakerThinking Inc., to be pretty authoritative and sound over the years when it comes to manager-employee relationships.

HRE clearly concurs, as it will be featuring Tulgan in a webinar on Aug. 13, titled “Building a Better Boss: Engaging Managers to Inspire and Engage Workers.” In the webinar, he’ll discuss his latest research that finds “The Under-Management Epidemic,” first revealed in his company’s 2004 study, rages on 10 years later. According to the study, nine out of 10 leaders and managers are not providing their direct reports with sufficient guidance, support and coaching today. 

In his latest book, already listed on Amazon, Tulgan reiterates and underscores that fact, bringing together what he says are the 27 — not 26 or 28, mind you — challenges he’s heard repeatedly from managers over his 20 years of research. During that time, he says, he’s asked “hundreds of thousands of managers in organizations of all shapes and sizes, ‘What are the most difficult challenges you face when it comes to managing people?’ ” His finding:

Regardless of industry or job title, managers cite the same core issues — more than 90 percent of responses over the years refer to the same 27 challenges. The same cases come up over and over again — maybe it’s the superstar [who] the manager is afraid of losing, the slacker [who] the manager cannot figure out how to motivate or the two employees who cannot get along.”

As Tulgan says in a Q&A at the end of this link about the book, including excerpts:

It turns out that when things are going wrong in a management relationship, almost always, the common denominator is unstructured, low-substance, hit-or-miss communication. … Almost always, the ad-hoc manner in which most managers talk to their direct reports every day actually makes inevitable the most difficult employee situations that tend to vex managers. What is the key to avoiding most of these problems and the key to solving them quickly and with relative ease as soon as they appear? High-structure high-substance one-on-one dialogues with every direct report.”

For what it’s worth, I have talked to numerous experts over the years who have corroborated this need for more effective and authentic one-on-one business leadership, including folks at Bridgeville, Pa.-based Development Dimensions International, whose recent study finds a sorry lack of interactive-conversational skills among business leaders and managers worldwide. (I wrote about that study in this recent news analysis.)

As it is, and as Tulgan’s book lays them out — grouped in chapters according to stages of one’s management career and types of problems — here they are, all 27 of them:

1, when going from peer to leader; 2, when coming from the outside to take over leadership of an existing team; 3, when bringing together an entirely new team; 4, when you are welcoming a new member to your existing team; 5, when employees have a hard time managing time; 6, when an employee needs help with interpersonal communication; 7, when an employee needs to get organized; 8, when an employee needs to get better at problem-solving; 9, when you have an employee who needs to increase productivity; 10, when you have an employee who needs to improve quality; 11, when you need an employee to start “going the extra mile”; 12, when your employees are doing “creative” work; 13, when the employee you are managing knows more about the work than you do (I, Kris Frasch, suspect that might be something managers are experiencing more frequently these days, given our demographic shifts in the workplace); 14, when an employee needs an attitude adjustment; 15, when there is conflict between and among individuals on your team …

Breath …

16, when an employee has personal issues at home; 17, when there is a superstar you need to keep engaged; 18, when you have a superstar you really want to retain; 19, when you have a superstar you are going to lose for sure: how to lose that superstar very well; 20, when you need to move a superstar to the next level to develop as a new leader; 21, when managing in an environment of constant change and uncertainty; 22, when managing under resource constraints; 23, when managing through interdependency management challenges; 24, when managing around logistical hurdles; 25, when managing across differences in language and culture; 26, when you need to renew your management relationship with a disengaged employee; and 27, when you need to renew your own commitment to being a strong, highly engaged manager.

As Rainmaker puts it in one promotional, “The 27 Challenges are enumerated not in order of frequency or difficulty, but rather according to the bigger-picture human capital issues in which [they] fall. Like a guidebook through the real life of a manager — from the ‘new-manager’ challenges, through performance management, retention, and all the way to the latter career stage when so many managers face the challenges of ‘renewal.’ ”

Tulgan says he hopes readers will use this book like reference material, referring to the specific challenge one is encountering and his solution for overcoming it, maybe reading others to prepare a little, but then shelving it until it’s needed again.

Personally, I can’t imagine many other challenges than the ones listed above, but Tulgan assures me there are hundreds more. Solve these ones, he says, and you’ll have a pretty good handle on how to apply “the fundamentals of management to gain control of any situation.” People managing managers, he adds, should keep it on hand, too.

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Millennial Meltdown

stressed womanBy definition, employee burnout occurs when someone begins to feel emotionally and physically spent after doing a difficult and demanding job for a long time.

With that in mind, it seems to make sense that older employees—baby boomers bearing down on retirement age, Gen Xers now hitting their 40s and 50s—would be the most likely to feel worn down from work.

Doesn’t it?

Not necessarily, according to a recent Monster.com survey, which actually finds millennial-age workers to be the most burned out of the bunch.

In a Monster poll of nearly 1,100 employed or unemployed job seekers, 81 percent of workers said they feel some sense of burnout in their jobs. Eighty-six percent of millennials report experiencing some level of burnout, compared to 76 percent of more experienced workers saying the same.

Of course, with some of their more seasoned colleagues moving into different positions or getting ready to settle into retirement, many Gen Y workers may find themselves bearing a larger load than ever before in their relatively young careers.

Looking through that lens, maybe it’s not so surprising that more members of Gen Y are feeling fried, according to Jeffrey Quinn, vice president of Monster’s global insights.

“It’s probable that millennials are expected to take on larger roles than their more experienced predecessors, and thus are feeling the pressure,” said Quinn, in a statement.

“That said, millennials are proving to be more open-minded than the more experienced workers when it comes to job locations and roles,” he said. “This flexibility will be advantageous to the millennial generation, allowing them to cast a wider net and find better success and satisfaction in their careers.”

HR and managers can play a part in helping Gen Y get a handle on their increased responsibilities, but should bear in mind that “millennials have a very different mindset from the older generations in the workforce,” says Jay Meschke, president of Leawood, Kan.-based CBIZ Human Capital Services.

“For example, millennials are eager to please, but they tend to require more feedback than other generations,” says Meschke. “Executives should communicate and provide [frequent] feedback that is timely and specific, and addresses performance issues, not intergenerational differences.

“It’s also important to create an emotional connection,” he adds, “through simple acts like highlighting internal promotions.”

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Prayer Rooms as a Perk?

prayerTech companies have long set the standard for unique on-site amenities, from free haircuts and laundry service to regular massage days and rock-climbing walls.

Could prayer rooms be the next perquisite that employers in Silicon Valley and beyond put in place to help recruit and keep top-notch talent?

They just might be, if a recent article appearing in Crain’s Chicago Business is any indication.

Earlier this week, Crain’s highlighted a few tech firms adding spaces dedicated to prayer and meditation, meaning that “religious employees no longer have to use conference rooms or other shared spaces—sometimes uncomfortably—for daily prayers.”

The rooms, the article notes, “can be a tool for attracting and retaining talent, proof that the boss welcomes Muslims and other people of faith,” not to mention “another way that tech companies disrupt the traditional office, like informal dress and flexible hours.”

Gogo Inc., for example, will provide employees at the in-flight Internet service provider’s new Chicago headquarters with two rooms set aside specifically for prayer and meditation. At its current Itasca, Ill.-based office, employees have typically reserved conference rooms for such purposes, but “it wasn’t a great solution,” Debbie Fangman, Gogo facilities manager, told Crain’s.

Online travel company Orbitz Worldwide Inc. had a similar room built when it moved into its new Chicago digs last year, after managers had noticed employees slipping into stairwells to pray at the company’s old offices.

“[The prayer room] is No. 1 for me, ahead of the soft drinks, the coffee machines or the game room,” Zaki Sharabash, senior director in business intelligence at Orbitz, told the paper.

“When you’re a minority, you don’t feel comfortable enough to ask for something like [a prayer room],” added Sana Mohammed, an Orbitz project manager who uses the room daily. “It’s welcoming. As an employee, you feel respected, that there’s a place for you.”

Those few minutes spent praying also provide an energy and productivity boost, according to Mohammed.

“I come back refreshed and focused. I’m able to put more toward my work.”

A growing number of tech companies seem to be realizing as much, with more of them asking to build prayer rooms into their floor plans, according to Theresa Williams, a design director with interior design and architecture firm Nelson & Associates.

“It started in the past year or two,” Williams told Crain’s. “It’s something you ask about now.”

While tech firms may be on the leading edge of the trend—as they often are—making space for prayer at work “is a fantastically good thing” regardless of industry, said Jeff Carlson, professor of theology at Dominican University in River Forest, Ill., in the Crain’s piece.

“It honors the fact that religion or spirituality is real, and is to be honored and respected,” said Carlson. “Diversity is a fact. It’s how [employers] react to it that matters.”

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Giving Workers a Reason to Quit at Amazon

Years ago, we reported on Zappos’ decision to offer employees a $1,500 bonus to quit during its intensive, four-week training period. The thinking being, if they’re not happy in their jobs 480491805at that point, why prolong the inevitable and suffer the consequences in the process.

Well, in case  you haven’t already heard, earlier this week, Amazon CEO Jeff Bezos reported in his letter to shareholders that the online retailing behemoth has established a program called “Pay to Quit” that pays warehouse employees up to $5,000 to leave.

Bezos spells out “Pay to Quit” this way in his letter to shareholders

It was invented by the clever people at Zappos, and the Amazon fulfillment centers have been iterating on it. Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is ‘Please Don’t Take This Offer.’  We hope they don’t take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”

In a story in The Tennessean, an Amazon spokeswoman says only workers in the fulfillment centers, where customer orders are packed and shipped, are eligible for the program and that only a small percentage of employees take the company up on the offer. (Back in 2008, when we first wrote about the Zappos program, we were told only 2 percent of the trainees took the online shoe-and-clothing retailer up on its offer.)

Hearing about Amazon’s decision to follow in Zappos’ footsteps (excuse the pun), I tried to find other attempts at this, at decent-size organizations anyway, but came up empty handed. (If you’re aware of any, let us know.)

But with Amazon’s program getting the press attention it has, could that change?

I asked that question this afternoon to Joel Garfinkle, founder of Garfinkle Executive Coaching in Oakland, Calif., and author of Getting Ahead: Three Steps to Take Your Career to the Next Level.

That’s certainly possible, Garfinkle told me. “ We live in a copycat world” and “a lot of people look to Jeff [Bezos] as the new Steve Jobs — someone who leads from the front and is willing to take risks,” he said.

Garfinkle believes the approach might have some merit. “If you’re neutral or positive about your job, you’re not going to take [the offer to leave],” he says. “But if you’re really on the fence or negative, it might be enough that you just might take it.”

Much still needs to be measured, he adds, but at the end of the day it could very well lead to higher overall productivity.

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Looking for the Exit Signs

Looking for signs some of your top talent is about to head out the door for good?

According to a recent study conducted by researchers at Utah State University that recently crossed my desk, the signals are often more subtle than 77870591blatant. Generally speaking, says Utah State Associate Professor Tim Gardner (one of the study’s authors), the one thing most employees had in common before they left was that they began to “disengage” in the workplace. How so? Gardner’s research found those who were about to leave …

  • Offered fewer constructive contributions in meetings;
  • Were more reluctant to commit to long-term projects;
  • Became more reserved and quiet;
  • Became less interested in advancing in the organization;
  • Were less interested in pleasing their boss than before;
  • Avoided social interactions with their boss and other members of management; and
  • Began doing the minimum amount of work needed and no longer went beyond the call of duty.

In other words, their lack of engagement began to show up in here and there in their performance a few months before they actually quit. (Gardner, who did the study with Utah State Professor Steve Hanks and Florida State University Professor Chad H. Van Iddekinge, says the statistical formula they used could predict with 80 percent accuracy that employees demonstrating at least six of these behaviors were about to leave.)

It’s no surprise, of course, that signs like those listed above would make the researchers’ list. Those looking to exit are inevitably going to mentally check out some time before they actually give their notice. But what was somewhat surprising about the findings, Gardner points out, is that things like taking more vacation time, punching out at 5 p.m. every day and looking at outside openings on company time were not on the list.

“You might think that someone who starts showing up to work late, failing to return phone calls and emails, and taking lots of sick days might be about to leave, but those weren’t unique behaviors that applied only to the quitters,” he says.

Plus, just maybe, these latter individuals are savvy enough to avoid the obvious.

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Disabled Americans Want Jobs, Not Benefits

Linking a Jan. 8 release with Jan. 7 news that the Social Security disability system may have been bilked out of hundreds of millions of dollars by 9/11 responders and others 183174586 -- disabled at workfaking disabilities, RespectAbilityUSA made a special plea to employers to turn some numbers around and get more disabled Americans into the workforce.

In the release, RespectAbility — a Washington-based nonprofit focused on empowering people with disabilities — included results from its latest poll showing three out of four people with disabilities surveyed value a job and independence over government benefits. (Here is a link to the final poll announcement made on Friday, with slides.)

“Too many people with disabilities are prevented from having a real job at a real wage because of employer misconceptions and because the structure of the benefit system prevents people from working more,” says Jennifer Laszlo Mizrahi, the company’s president. “Republican, Democrat, Independent — what comes across clearly in the poll is that people with disabilities want to work, pay taxes and be full members of our society.”

Addressing the 9/11 scandal — involving New York cops and firefighters allegedly making fraudulent claims of depression and anxiety to their doctors for lucrative awards — Mizrahi says her organization is “disgusted by the actions of individuals [that make] the rest of us with real disabilities and those who care about them look guilty, and it makes it more difficult to have important conversations about our hopes, aspirations and dreams of entering the workforce and being active, contributing members of society.”

The release cites findings that 70 percent of working-age Americans with disabilities are outside the workforce, compared to 28 percent of people with disabilities. It also includes data showing the disability community gives President Obama, Congress and their governors failing grades in how much they trust them to increase their employment opportunities.

This certainly isn’t the first time we at HRE have covered the merits of attracting, hiring and retaining people with disabilities. Three of my recent favorites are this recent blog post by Senior Editor Andrew R. McIlvaine about a disability summit co-hosted by the U.S. Chamber of Commerce highlighting companies that are doing those things right, our December benefits column by Carol Harnett about disability’s power to instruct and how she learned early on that everyone deserves a fair chance, and this November feature by Julie Cook Ramirez about a company — Innotrac — going the distance to give disabled workers just such a chance.

I like the numbers RespectAbility provides though, even though they sadly underscore a huge discrepancy between what disabled Americans want and what they’re currently getting.

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Boasting About Benefits

boasting about benefitsHere are a few statistics to digest as you think about how to attract and hang on to top talent in 2014.

In its six-part State of Employee Benefits in the Workplace survey of 440 randomly selected HR professionals, the Alexandria, Va.-based Society for Human Resource Management asked respondents about how (or if) they use their workplace benefits programs to help recruit employees. Only 25 percent of organizations indicated they use their workplace benefits to help recruit employees.

In addition, just 30 percent said they’re leveraging their benefits programs specifically to recruit in-demand workers, despite half of the participants in SHRM’s poll reporting difficulty in recruiting highly-skilled employees. Even fewer employers—less than one in five—report touting the value of their benefits programs to retain current employees.

Among those that do promote their benefits packages as part of their recruitment and retention strategies, healthcare and retirement savings are the most talked-about benefits, followed by leave benefits and professional- and career-development benefits.

Employers may be wise to spend a bit more time talking up these types of benefits, especially at a time when companies can’t necessarily offer top-dollar salaries as a way to reel in and retain top-dollar talent, says Joseph Coombs, SHRM’s senior analyst for workforce trends.

“Considering that wage growth has been very weak in the post-recession economy, HR professionals frequently cannot use higher salaries as a draw for attracting and keeping talent,” said Coombs, in a statement. “Many recruiters now advocate using a ‘total rewards’ approach to recruitment and retention, leveraging an employer’s benefit package as part of that strategy.”

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Yahoo Cracks the List of Top 25 Companies for Work/Life Balance

worklifeYahoo CEO Marissa Mayer took plenty of heat for her decision earlier this year to revoke that company’s telecommuting policy. So it must be sweet justice indeed for her that Yahoo has just made its first-ever appearance on Glassdoor’s Top 25 Companies for Work-Life Balance 2013. Ranked at #16 on this year’s list, employees commended Yahoo for “great for work/life balance,” “flexible working hours” and “free food that’s better than Google’s!” (Mayer joined Yahoo from Google, where she’d been the 20th person hired, its first female engineer and helped create the firm’s search service and its famous white-background home page, among other things.) Yahoo’s work-life balance rating was a 4.0 out of a possible 5, with 5 being the best and 1 .0 “very dissatisfied.” Other companies making their first appearance on the list were MasterCard and NetApp.

No. 1 on the list is Cary, N.C.-based SAS Institute (with a 4.5 rating), a software firm that’s been winning kudos for its employee-friendly policies since well before “work/life balance” became the buzzword it is today. SAS was followed on the list by National Instruments, Slalom Consulting, MITRE and Orbitz Worldwide. Seven companies have made the last for the past three years, including SAS, MITRE and Agilent Technologies. In order to qualify for the list, companies must have at least 50 work-life balance ratings on Glassdoor within the past year and at least 10 the year prior.

The survey also suggests that, for employees, maintaining a good work/life balance is becoming increasingly difficult: the average work-life balance rating has dropped over the years, from a 3.5 in 2009 to 3.2 so far this year. That’s not good news for HR, considering that a survey earlier this year found that employees who perceive their companies aren’t interested in helping them balance work and family are more likely to jump ship.

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