Employee Retention in Tight Times
Murakami, Patricia H., Journal of Property Management
In a market when unemployment was at a record low of 4.2 percent this March, the last thing a manager wants to do is look for good help. It's difficult enough to find anyone to interview, let alone a qualified professional to hire. To avoid the problem, many industries, including property management firms, are examining their compensation and benefits programs to make certain that they are competitive-and maybe even to find out if enhancing benefits might be the key to lock-in the relationship with a valued employee.
In the old days, a traditional merit package that included some form of health insurance and vacation pay was all an employee could-or did-ask for. But times have changed and the pressure has picked up. Employees are asking for, and receiving, inventive packages that fit individual needs and wants. The traditional merit increase, by all industry signs and predictions, may be all but dead in a few years.
In the Chicago Tribune, Sandra O'Neal, a principal at benefits consultants Towers Perrin, noted that we are on the precipice of a very major change" in pay practices. She estimated that in the past two years about 45 large and medium-sized employers in the U.S. have replaced some staffers' standard raises with variable-pay programs.
"Regular merit increases aren't dead. But they are losing their credibility and their effectiveness,' says Jerry McAdams, a national practice leader at consultants Watson Wyatt Worldwide in the same Tribune article. If the merit increase, once viewed as the traditional motivational tool that kept employees striving, is no longer working, what can you do instead?
That depends on whom you talk to and what you read. The greatest struggle appears to be in the chasm that runs between the Fortune 500 company and the rest of us. The former does exhaustive research, searching for trends and patterns while the latter appears to try BandAids like summer hours and bagels on Friday to go with gourmet office coffee in an effort to stave off abandonment. Is there a road in the middle?
The answer is "yes"-but the road is tempered with inventiveness and a willingness to consider the less traditional. The key is to take the research large companies are paying for and make it your own. Still, you can't just steal their ideas and practices, expecting them to work. You need to do your own research with regard to your own management and staff. Start off by asking some basic questions:
What are we really trying to accomplish? (i.e. reduced exit percentages, improved employee morale, increased employee referrals etc.)
What are we willing to give to make this (increased retention and employee involvement, decreased employee dissatisfaction) happen?
What resources (people, dollars, practices) can be counted on to make the change reality?
Without honestly answering these questions, your process cannot move forward. The need to understand where you are willing to bend and what areas are off limits is critical. This understanding will help you begin to think about the options you can potentially offer to employees. Why even consider telecommuting or job sharing or cafeteria benefit plans if it is corp rately verboten or impossible due to the method of work distribution.
There are as wide a variety of options to offer within your programs as there are business types. The key is to offer those that interest your employees. Some points to consider when trying to narrow the offerings:
What are the age groups of your employees? Are they all young and college educated? Are they primarily over 50? If there is a pattern, use it as a factor when considering options.
Are your employees primarily exempt or non-exempt, full-time, or part-time? Hourly or salaried? Current compensation practices will play into the preferred options.
Are there any forms of bonus, incentive, or "exceptional" pay practices currently in place? What has been the feedback on the current program? How old is it? This will impact survey results, particularly if the past program has been in place a short period of time and is viewed unpopularly. Older programs are often seen as immutable. A newer program that has been executed poorly or badly designed can create a sense of dread for any program that will follow it.
If you suddenly see your list of options dwindling after this examination, the bigger question to ask may be, "Are you really willing to look at a non-merit pay method?" In order to change, you must be willing to sacrifice some of the traditional control methods corporations have taken comfort in over the years.
After examining where your company is willing to give, the next step is to research where your employees are willing and wanting to gainand at what price. At this point, the staff survey needs to be constructed. Use questions that both offer a selection of answers and those that allow employees to share their opinions and thoughts about the proposed changes. Make sure to begin by gathering information and opinions about the current offerings.
The questions that offer selections can be used to track preferences and rankings of offerings. Don't construct questions in an all or nothing manner, but rather utilize wording that allows the employee to share all preferences as well as non-preferences. For example, give employees a list of options and ask them to prioritize them from one through six. This method allows the management team to fully understand which answers are viewed positively and which negatively. You do not wish your program to end up selecting the "best of the worst." The employees must be allowed to voice their opinions, even if it means that they truly don't like any of the selections or they truly like all of the options.
Developing and administering employee questionnaires is a point at which many companies get an outsider involved. The key to employee polls and surveys is that the opinions expressed must remain unchanged by management interference or the survey becomes invalid. Having an outsider conduct the survey can greatly increase its validity and help ensure employee anonymity.
A second choice is the blind comment survey, conducted by your human resources professional. In either case, the third-party intervention between managers and employees is critical in understanding what employees already enjoy about their benefits, what they would like to see added, and other interesting facts about your benefits programs. If you choose to use your HR manager or another staff manager, they must be seen as trustworthy by both sides of the process or your results will be colored by the staff members' feelings for the intervening manager.
Don't be surprised if you receive a full range of results. While some will be satisfied by the current program and offer few comments, others will write mini epics full of scenarios that are wild beyond the scope of options being considered by your company. Keep in mind that many employees feel that this is their chance to tell management what excites them, what they hate, and why. While some might be excessive, other employees may offer suggestions that were not considered initially, but should definitely be included during future conversations. This is one of the great hidden pay-offs to a well-constructed survey program. Often the solutions that are most requested were too easy to see, but overlooked because you tried too hard.
Compile the information that you gather from your survey and compare it apples to apples, wage suggestion to wage reality. Honestly look to see what changes employees are suggesting and what impact they carry.
Next, try comparing a plan utilizing their suggestions to the plan currently in effect. What are the differences? Where are the largest adjustments, the least? Get a feeling for the preferences your staff members are showing through their suggestions and comments. Is there a particular area of the program that they appear to be dissatisfied with or are their comments covering a wide variety of areas? It may take a second or third set of questionnaires to narrow the list of ideas from the wild to the realistic, from the "ask for everything" mind set to the actual list of needs.
Now it's time to roll up your sleeves and get to work. You'll need to refer back to the list that your management team made initially-what you are willing to offer and where are you willing to give? Are there intersecting points between these two lists, or are they worlds apart?
Some of the most successful midsized company compensation programs are combinations of options and preferences. Some of the areas that are considered in these programs include:
Tie rewards to a company strategy. Link a portion of an employee's compensation to a finite, measurable goal. What we promise now is to reward those that hit their goals making rewards more immediate. Whether your company is promising world-class customer service or faster turnaround times, reward those that live up to the program.
Equalize rewards across divisions or departments. You cannot reward the same activity differently in two areas; employees talk. Consistency in the way rewards and bonuses are metered out is as important as the bonus itself.
Use non-cash recognition programs if cash is not (or cannot be) the answer. Celebrate an employee's achievements involving certain business programs or models. Recognize a goal that was met and exceeded, but tie the recognition to a finite, measurable goal. Don't recognize someone "because they do a good job." Tell employees what the good job is, and tell them what they are receiving. It can be a jacket or shirt, airline tickets, a spa day, or restaurant certificates. Or let them pick their prize from a selection, so that favoritism is not an issue. Make sure the gifts are valued by the employees and not some hand-offs that management didn't want or won at a golf tournament.
Offer your benefits using the newer cafeteria plan. This technique allows employees to pay for the benefits of their choice with pre-tax dollars. If your company is too small to offer this type of a program, find out what benefits your employees might be willing to partially pay for if they were offered. Vision, eyecare, dental and orthodontics, day-care subsidies, generic drug programs, and counseling are just a few of the specialized offerings where partial contributions can make a major quality-of-life change for employees.
There also are newer concepts of buying or selling extra vacation days, as well as the ability to take time off during the day to attend a child's school function or conference and make up the time later on in the day or week. Flexibility that permits job sharing or telecommuting one or two days per week are accepted options in today's employment market. You may be thinking, "I let my employees leave when they need to or I've given extra vacation days on occasion. What's the big deal?" The big deal is that the employees are able to recognize these options while they are making their plans. That sense of control and power makes them feel empowered and realize the benefit.
Finally, Share It
Whatever you decide, don't keep it a secret. Make sure that the program is made known and understood. Hold "town meetings" to share the information and to allow a time for questions. Get employees excited and work hard to ensure that they see your new program as a positive change. Manage and administer the program fairly and evenly. Everyone should be able to see how their benefits have changed for the better, helping them to work toward the corporate goal.
As you can tell, there are no right or wrong answers to the new puzzle of using benefits and compensation to keep employees happy and working. The key is to find a middle ground between what employees want and what your management team is willing to offer. If you give nothing, you will get nothing. But by using creative thinking and planning, by tinkering with what you currently have to see what is possible, the benefits you can offer may amaze you. And the cost may be less than you would ever think.
What Makes a Great Job
Does the job reflect your passion?
Will you have a great mentor?
Will you learn a lot fast?
Does the job encourage rapid change?
Is the company an employer of choice or a fun place to work?
Source: Fast Company, October 1998
A 1998 survey found that in 1998 the average employee had been in his or her current job for 3.6 years, down from 3.8 years in 1996. Older workers have job tenure twice as long as those under 34. Managers and professionals have the highest median turnover of any occupational group.
Source: Bureau of Labor Statistics
About 40 percent of U.S workers say that workloads are excessive and that they are bothered by excessive pressure on the job.
Source: A survey by International Survey Research, as quoted in the Wall Street Journal, March 10, 1999.
How to Make Rewards Effective
Match the reward to the person
Match the reward to the achievement
Be timely and specific
Reflect the company's goals
Make the program public
Source: 1001 Ways to Reward Employees, by Bob Nelson
Patricia H. Murakami is president of Precepta, Inc., a Chicago consulting firm specializing in hiring and training employees for a variety of industries.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Employee Retention in Tight Times. Contributors: Murakami, Patricia H. - Author. Magazine title: Journal of Property Management. Volume: 64. Issue: 4 Publication date: July/August 1999. Page number: 38+. © 1999 National Association of Realtors. Provided by ProQuest LLC. All Rights Reserved.