Employee Retention, Engagement, and Careers
Chapter 9 offers some good advice and tools for managing careers. We will discuss building effective communications through fair treatment programs and employee discipline. In addition we will discuss proper handling of dismissals and separations, including retirement.

In recent years, many employees from the “baby boom” generation have taken early retirement. However, experts believe the next generation will have to work longer than they would wish in order to fund those who are retiring now.

The Social Security Administration has increased the age at which future generations will be eligible for benefits.

Management will need to find ways to stimulate career interests of older employees to keep them motivated and productive.

Firms also will need to find ways to ease labor shortages by attracting those to return who already have retired. Let’s discuss these and other issues.

Learning Objectives
By the time we have finished this chapter you will be able to: 1. Describe a comprehensive approach to retaining employees. 2. Explain why employee engagement is important, and how to foster such engagement. 3. Discuss what employers and supervisors can do to support employees’ career development needs. 4. List and discuss the four steps in effectively coaching an employee. 5. List the main decisions employers should address in reaching promotion decisions. 6. Explain the factors you would consider when dismissing an employee.

Managing Employee Turnover and Retention * Costs of turnover * Managing voluntary turnover * Retention/reducing voluntary turnover

Turnover is an expensive cost for organizations. Understanding more about the costs and causes of turnover is important.
There are tangible and intangible costs associated with turnover. Reducing turnover requires identifying and managing the reasons for both voluntary and involuntary turnover.

Voluntary turnover occurs for many reasons. Top reasons include job dissatisfaction, poor pay or health-care benefits, few promotional opportunities, and inadequate work-life balance. Any retention strategy begins with identifying the specific causes of turnover within a particular company.

Describe a comprehensive approach to retaining employees.
Experts from a top consulting company suggest building comprehensive retention programs around the steps below. * Using effective selection techniques * Offering professional growth opportunities * Providing career direction * Offering meaningful work and * Encouraging ownership of goals.
Let’s discuss these in a bit more detail.

Retaining Employees 1. Magnitude of the problem 2. Compensation 3. Selection 4. Professional growth 5. Provide career direction 6. Meaningful expectations

The logical place to start is by periodically tracking the number of employees—and particularly top performers and high potentials —who leave the company. Then, identify the issues.

The most obvious explanation for why employees quit is often also the correct one: low pay. While exit interviews may lead to the easiest answer for top performers to give (“I’m leaving for a higher paying position”) it is still valuable to gather such information. To the extent compensation can be validated as the reason for turnover of high performers, actions can be taken to address the issue. Today, compensation is the tool of choice to retain top performers.

Remember, “retention starts up front, in the selection and hiring of the right employees.” The process begins with a thorough understanding of the jobs to be filled. It includes a solid job analysis and an effective and efficient hiring process.
Professional growth is a well-thought-out training and career development program that can provide a strong incentive for staying with the company.

Providing career direction means discussing employee’s career preferences and prospects at your firm, and helping them lay out potential career plans. Furthermore, “don’t wait until performance reviews to remind top employees how valuable they are to your company.”

An important part of retaining employees is making it clear what your expectations are regarding their performance and responsibilities. This helps employees “own” their behaviors and results. A job is meaningful if the incumbent understands its relationship to the company goals and sees his or results as part of the bigger picture.

Retaining Employees 7. Recognition 8. Culture and environment 9. Work–life balance 10. Acknowledge achievements 11. High-performance work systems 12. Use analytics 13.
Other key retention elements are recognizing and rewarding performance, learning the culture and environment, promoting work-life balance, and acknowledging achievements.

We’ve seen that in addition to pay and benefits, employees need and appreciate recognition for a job well done.

With respect to culture and environment, companies that are very tense and “political” may prompt employees to leave. Companies that help employees feel comfortable increase the likelihood that top performers will stay.

Balancing work and life remains an important part of retaining valued employees. In one survey, workers identified “flexible work arrangements” and “telecommuting” as the two top benefits that would encourage them to choose one job over another.

When employees feel underappreciated, they’re more likely to leave. Surveys suggest that frequent recognition of accomplishments is an effective nonmonetary reward. Such recognition is likely to be helpful even though some recipients may state they don’t need a sincere “thank you.”

High-performance/involvement type practices seem to reduce employee retention.

Evidence-based management is important in controlling employee turnover. One company uses business analytics to sift through employee data in order to calculate, in terms of a “flight-risk model,” the likelihood that any particular employee will leave.

Retaining Employees * Talent management and employee retention * Job withdrawal * Dealing with involuntary turnover

Firms that take a talent management approach to retaining employees focus their efforts on the company’s mission-critical employees.

Involuntary turnover is inevitable. When jobs are restructured or when competitive or economic pressures necessitate reductions in the workforce an employer will let some employees go. However, dismissals due to poor performance sometimes are avoidable.

Poor performance and involuntary turnover can be managed by reviewing and improving: 1. Recruitment 2. Selection 3. Training 4. Appraisal, and 5. Compensation/incentive plans. 6.
Job withdrawal is any action which places physical or psychological distance between the employee and the organization. It’s a means of escape for someone who is dissatisfied or fearful. Managing the almost limitless reasons an employee can become dissatisfied requires a complete and effective human resource system.

Review * Magnitude of the problem * Compensation * Selection * Professional growth * Career direction * Meaningful expectations * Recognition and rewards

The logical place to start is by periodically tracking the number of employees—and particularly top performers and high potentials —who leave the company. Then, identify the issues. The most obvious explanation for why employees quit is often also the correct one: low pay.

Selection is the beginning of an effective career development process. Ensuring each employee has an opportunity for growth and an understanding of possible professional directions provides a sense of security and empowerment. Working with employees in establishing goals for meaningful work with understandable goals helps ensure a sense of ownership. A reward and recognition system that supports goals will be meaningful both to the employer and the employee.

Review * Culture and environment * Work–life balance * Involuntary turnover * Achievements * Work systems

Establishing a culture and reinforcing the firm’s environment will maintain a well-functioning system so all will know “how we get things done around here.”
Balancing work with other aspects of life remains an important element to retaining employees.

Involuntary turnover is inevitable but can be managed to reduce negative impact on the organization.

In terms of achievements, when employees feel underappreciated, they’re more likely to leave.

High-performance/involvement type practices seem to reduce employee retention.

Review * Analytics * Talent management and employee retention * Job withdrawal

When employees feel underappreciated, they’re more likely to leave.
High-performance/involvement type practices seem to reduce employee retention.

Analytics: Evidence-based management is important in controlling employee turnover.

Finally, job withdrawal is usually a result of employees becoming fearful or dissatisfied.

Why employee engagement is important, and fostering such engagement.
Engagement refers to being psychologically involved in, connected to, and committed to getting one’s jobs done.

Poor attendance, voluntary turnover, and psychological withdrawal often reflect diminished employee engagement.
Let’s discuss.

Employee Engagement * Importance * Fostering * Monitoring
Employee engagement is an important topic. Many employee behaviors, including turnover, reflect the degree to which employees are “engaged.” One survey concluded that companies with highly engaged employees have 26% higher revenue per employee.
Actions that help ensure engagement include making sure employees understand how their departments contribute to the company’s success. In addition, employees should see how their own efforts contribute to achieving the company’s goals. Finally, employees should get a sense of accomplishment from working at the firm.

Monitoring employee engagement needn’t be complicated. A simple survey may do the job. One survey indicated 83% of employees reported they are determined to accomplish their work goals. Further, they were confident they could meet their goals.

Discuss what employers and supervisors can do tosupport employees’ career development needs.
While each individual employee may have different interests and career aspirations, employers and managers should provide career development support and training. Let’s discuss these important concepts in more detail.

Career Management * Career terminology * Careers today * Psychological contract * The employee’s role * The employer’s role

We may define a career as the “occupational positions a person has had over many years.”
Recessions, mergers, outsourcing, consolidations, and seemingly continuous downsizing have changed the ground rules. More often employees find themselves having to reinvent themselves to remain productive in the workforce.

What the employer and employee expect of each other is part of what psychologists call a psychological contract. The psychological contract identifies each party's mutual expectations.

As in other parts of life, an individual must accept responsibility for his/her own career. He or she should assess his/her own interests, skill, and values. Finally, the employee must take the steps required to ensure a happy and fulfilling career. One of these steps is finding a mentor who can be a sounding board. Mentoring programs can be informal or formal.

For the employee, career planning means matching individual strengths and weaknesses with occupational opportunities and threats. In other words, the person wants to pursue occupations, jobs, and a career that capitalize on his or her interests, aptitudes, values, and skills.

The employer’s career development tasks depend partly on how long the employee has been with the firm. For example, before hiring, realistic job interviews can help prospective employees more accurately gauge whether the job is a good fit for them.

Career Management Options * Career Management Systems * Career centers and workshops * Lifelong learning * Career coaches * Online programs * Career-oriented appraisals * Gender Issues * The Manager’s Role

Employers can support career development efforts in many ways. The means for helping to further an employee’s career depend on the length of time the employee has been with the firm.

Career development systems needn’t be complicated. Receiving performance feedback and individual development plans can make an enormous difference in employee performance. In addition, having access to nontechnical skills training will contribute to satisfaction and engagement. However, a large portion of companies do not provide such services.

Women report greater barriers (such as being excluded from informal networks) than do men. They also have more difficulty getting developmental assignments and geographic mobility opportunities. Many call this combination of subtle and not-so-subtle barriers to women’s progress the glass ceiling. Organizations need to be aware of it and try to eliminate it.

The manager can do several things to support his or her subordinates’ career development needs including scheduling a regular performance appraisal. Managers must also make expectations clear. Finally, managers must focus on the extent to which the employee’s current skills and performance match career aspirations.

Review * Employee engagement * Careers * Psychological contract * The employee * The employer

As far as employee engagement is concerned, many employee behaviors, including turnover, reflect the degree to which employees are “engaged.”

Monitoring employee engagement needn’t be complicated. A simple survey may do the job.
We can define a career as the “occupational positions a person has had over many years.” Today, employees often find themselves having to reinvent themselves.

A psychological contract is what the employer and employee expect of each other.
Finally, as in other parts of life, an individual must accept responsibility for his/her own career.

Review * Career management systems * Gender issues * The manager’s role

Career management systems do not need to be complicated. Using employee-accessible career centers, providing workshops and offering lifelong learning opportunities are among the ways employees can be helped. Using career coaches, online programs and career-focused appraisals will help.

While much progress has been achieved with respect to gender-role issues, much more needs to be done.

Finally, the manager should provide timely performance appraisals and help the employee focus on the long-term career aspects of his or her job.

List and discuss the four steps in effectively coaching an employee.
As in most activities that must be organized, having a systematic plan will produce effective results in a coaching engagement. Let’s discuss.

Improving Coaching Skills * Building your coaching skills * Preparation * Planning * Active coaching * Follow-up

Coaching and the closely related mentoring are key managerial skills. Coaching means educating, instructing, and training subordinates. Mentoring means advising, counseling, and guiding. Coaching focuses on teaching shorter-term job-related skills. Mentoring focuses on helping employees navigate longer-term career hazards.

Coaching and mentoring require both analytical and interpersonal skills. They require analysis because you must know what the problem is. They require interpersonal skills because it’s futile to know the problem if you can’t get the person to listen or change.

We can best think of coaching in terms of a four-step process: preparation, planning, active coaching, and follow-up.

Preparation means understanding the problem, the employee, and the employee’s skills.

Planning the solution is next. In practice, you’ll lay out a change plan in the form of steps to take, measures of success, and completion dates.

With agreement on a plan, you can start the actual coaching. In this situation, you are, in essence, the teacher. Your toolkit will include what you learned about on-the-job training in Chapter 8.

Finally, bad habits sometimes reemerge. It’s therefore necessary to follow-up and re-observe the person’s progress periodically.

* Building your mentoring skills * Mentoring caveats * The effective mentor * The protégé’s responsibilities

Mentoring traditionally means having experienced senior people advising, counseling, and guiding employees’ longer-term career development. Mentoring focuses on relatively hard-to-reverse longer-term issues. It often touches on the person’s psychology (motives, needs, aptitudes, and how one gets along with others, for instance). Because the supervisor is usually not a psychologist or trained career advisor, he or she must be extra cautious in the mentoring advice he or she gives.

Effective mentors set high standards and are willing to invest the time and effort the mentoring relationship requires. Mentors actively steer protégés into important projects, teams, and jobs. Effective mentoring requires trust. Trust is built, in part, by a willingness to be vulnerable and open. The level of trust reflects the mentor’s professional competence, consistency, ability to communicate, and readiness to share control.

As a protégé, remember effective mentoring is a two-way street. You must choose an appropriate potential mentor. But, don’t be surprised if you’re turned down. Make it easier for a potential mentor to agree to your request. Do so by making it clear ahead of time what you expect in terms of time and advice. This also is good to practice with your professors. Finally, respect the mentor’s time. Be on time (or early) for meetings and don’t run over the time to which you both agreed. If necessary, reschedule the meeting.

Talent Management and Career/Succession Plans * 360º feedback * Career development * Compensation * Career progression * Learning management * Performance management * Recruiting & hiring

360º Feedback – Competency reviews by peers, supervisors, and subordinates (if any) are inputs into succession gap analysis;
Career development – As employees map out their career progress, plans can be established that address competency, skill, and behavior gaps;

Compensation management – financial plans can be tied to future succession plans so that their financial impact can be modeled;

Career progression. Historical information regarding past positions and career progress can be used to guide future succession decisions;

Learning management – Learning paths and courses can be set for projected future positions;
Performance management – Performance reviews can identify consistent high performers and top talent in the organization; and

Recruiting & hiring – the Sum-Total system compares current job profiles with succession plans; external candidates can then be recruited as needed.

Review * Building your coaching skills * Building your mentoring skills

Effective coaching means being prepared, having a plan, conducting the coaching and following-up. Because mentoring involves a practical knowledge of psychology and extensive experience, it is usually performed by more senior people. They set high standards, help steer and motivate protégés and build trust. Finally, as a protégé, remember effective mentoring is a two-way street requiring work by both individuals.

List the main decisions employers should address in reaching promotion decisions.
Promotions usually provide opportunities to reward the exceptional performance of tested and loyal employees. However, unfairness, arbitrariness, or secrecy can diminish the effectiveness of the promotion process for all concerned. Let’s discuss.

Making Promotion Decisions 1. Is seniority or competence the rule? 2. How should we measure competence? 3. Is the process formal or informal? 4. Vertical, horizontal, or other?

Four important rules impact the effectiveness of promotion decisions.
Decision 1: Is Seniority or Competence the Rule? Today’s focus on competitiveness favors competence. However, union agreements and civil service regulations often emphasize seniority.

Decision 2: How Should We Measure Competence? Start by defining the job, setting standards, and using one or more appraisal tools to record the employee’s performance. Then, use a valid procedure for predicting a candidate’s potential for future performance.

Decision 3: Is the Process Formal or Informal? Each firm will determine whether the promotional process will be formal or informal.

Decision 4: Vertical, Horizontal, or Other? Promotions can be vertical (within the same functional area) or horizontal (in different functional areas).

Making Promotion Decisions * Practical considerations * Sources of bias * Promotions and the law * Managing transfers * Managing retirements

There are several practice steps that should be taken by employers and managers: 1. Establish eligibility requirements 2. Review the job description 3. Review candidates’ performance and history, and 4. Hire only those who meet the requirements. 5.
Women and people of color still experience relatively less career progress in organizations, often called the glass ceiling. Bias and more subtle barriers (e.g., organizational culture and history) are often the cause.

Employer promotions must comply with all anti-discrimination and Equal Employment Opportunity laws.
Transfers are moves from one job to another, usually with no change in salary or grade. Frequent relocation of transferred employees has been assumed to have a damaging effect on transferees’ family life. Transfers are also financially costly.

Some employers are instituting formal pre-retirement counseling aimed at easing the passage of their employees into retirement. As you might suspect, a large majority of employees have said they expect to continue to work beyond the normal retirement age. For some, part-time employment is an alternative to outright retirement. Finally, employers can benefit from retirement planning by becoming able to anticipate or plan for future labor shortages.

Review * Promotion decisions * Measurement * Formal vs. informal * Vertical, horizontal * Practical issues * Bias * The law * Transfers * Retirement

The rules for promotion decisions include issues of seniority or competence, how to measure, and whether the process is formal or informal. In addition, consideration is given to whether the promotion is vertical or horizontal and who is eligible. Practical issues include bias such as the glass ceiling, legal compliance, and managing transfers and formal pre-retirement counseling.

Explain the factors you would consider when dismissing an employee.
Managing Dismissals * Termination at will * Grounds for dismissal * Wrongful discharge suits * Supervisor liability

Termination at will – The idea, based in law, that the employment relationship can be terminated at will by either the employer or the employee for any reason.

Termination-at-will Exceptions – Three main protections against wrongful discharge eroded the termination-at-will doctrine—statutory exceptions, common law exceptions, and public policy exceptions.

Grounds for Dismissal – There are four bases for dismissal: unsatisfactory performance, misconduct, lack of qualifications for the job, and changed requirements of (or elimination of) the job. Insubordination, a form of misconduct, is sometimes the grounds for dismissal.

Avoiding Wrongful Discharge Suits – Wrongful discharge occurs when an employee’s dismissal does not comply with the law or with the contractual arrangement stated or implied by the firm via its employment application forms, employee manuals, or other promises.

Protecting against wrongful discharge suits requires two things: following procedural steps, and fairness safeguards. First lay the groundwork to help avoid such suits. The procedural steps includes fairness safeguards. Terminated employees are less likely to sue if they believe you treated them fairly.

Supervisor Liability – Courts sometimes hold managers personally liable for their supervisory actions.
Managing Dismissals * The exit process and termination interview * Layoffs and plant closing law * Downsizing and mergers

The Exit Process and Termination Interview – To ensure the interview occurs in a structured way: * Plan the interview carefully. * Get to the point. * Describe the situation. * Listen. * Review the severance package. * Identify the next steps.
A layoff, in which the employer sends workers home for a time for lack of work, is usually not a permanent dismissal (although it may turn out to be).

Adjusting to Downsizings and Mergers – Downsizing means reducing, usually dramatically, the number of people employed by a firm. The basic idea is to cut costs and raise profitability.