Magazine article Business Credit

Secrets to Keeping Good Employees

Magazine article Business Credit

Secrets to Keeping Good Employees

Article excerpt

Employee turnover is expensive. An employer can easily spend 100,000 in exit interviews, severance pay, hiring costs and lost productivity while training the new hire.

Estimations on the turnover expenses of salaried positions can run high: a journeyman machinist costs $102,796; an automobile company's human resource manager $133,803; and a fast-food chain-store manager $21,931. Now add on the less obvious costs that come with loss of intellectual capital, decreased morale, increased employee stress and negative reputation. The impact of these factors to a company's profitability is significant.

Intrinsic Rewards Retain Employees

Retaining and motivating valuable employees requires employers to evaluate their situation and work environment. The extrinsic rewards are the most tangible-salaries, benefits, promotions-yet these incentives alone are not enough. Employees judge the quality of their job on the intrinsic satisfaction (the personal "reward" they reap from their work), and on whether they feel their work environment is supportive. These factors are powerful predictors of job satisfaction, commitment and loyalty, and retention. According to a 1997 survey, "The National Study of the Changing Workforce," these characteristics are better predictors of productivity than salary and benefits, if the compensation package is competitive with the marketplace. In that survey, some 2,800 blue- and white-collar workers were questioned about their jobs.

Using intrinsic rewards to increase employee commitment and retention is achievable in any organization. While it is both an art and a science, it has basic components of human nature that are fundamental. When these intrinsic approaches are understood and ingrained in the company culture, productive employees remain. Four building blocks need to be cultivated:

* Awareness

* Trust

* Spirit

* Accountability

Creating Commitment

Awareness is like maturity. It is recognizing and doing whatever it takes for the common good. It is valuing opinions, and looking for ways to make a situation better. Above all, it is self-knowledge of strengths and weaknesses, and having the confidence to participate without fear of failure. Unaware people continue to do what they have always done. Yet, they expect different results.

Teaching employees awareness in business means increasing their understanding in the following areas: profits and losses; the quality of work being done; and the needs of customers or team members. Employers who practice this create a workforce that will be engaged and committed.

Rodel, Inc., an electronic industry supplier, planned for 12 percent growth and instead experienced a 50 percent increase. The strain of this growth spurt would have caused some organizations to snap. Instead, the staff remained enthusiastic and the shipping record remained almost perfect. "Our people have a deep sense of commitment and caring," CEO Bill Budinger says.

Rodel employees' commitment increased because they knew their efforts were needed and that they were making a positive difference. Retaining employees like this makes for good business.

Taking Risk

Trust is built when people are honest with themselves and with others. According to William Bridges in the book, Managing Transitions, when people have a mutual trust, they are likely to progress. …

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