Retaining Star Performers in Trying Times - Management Essentials - HarvardBusiness.org
Harvard Business Publishing *
Voices » Management Essentials » Retaining Star Performers in Trying Times *
Retaining Star Performers in Trying Times ***
12:35 PM Wednesday December 9, 2009 **
by Amy Gallo *
Tags:Employee retention, Giving feedback, Managing people *
When the economy is slow and unemployment rates are high, it's easy to think your employees will happily stay put in their current jobs. But that's a dangerous assumption. Research shows that voluntary turnover rates increase as consumer confidence builds. This means, as a manager, you need to figure out ways to retain your top performers, even if your company is still in a slump. *
There is no doubt that as a manager the pressure is on. As Jay Conger, the Henry Kravis Research Professor of Leadership Studies at Claremont McKenna College and author of The Practice of Leadership: Developing the Next Generation of Leaders, points out, "The largest predictor of whether someone will stay with a company is their satisfaction with their immediate boss." Your employees are likely looking to you for inspiration and guidance during these tough times, and you may have little, or nothing, to offer them in terms of advancement or compensation. Many companies have reduced or stopped giving bonuses or merit increases until the economy shows greater signs of recovery. Fortunately, as a manager, you have many other levers available to you that can motivate your stars and keep them happy. Relying on those other levers may cost you and your company nothing, but often they have huge value to your stars. *
What the Experts Say ***
As a manager, your role is to figure out which of those benefits matter most to your people. As Conger points out, "A lot of managers don't realize what they have at hand." Making use of low-cost levers is a great way to show your stars that you appreciate them, value their work, and are invested in their careers. Boris Groysberg, an Associate Professor in the Organizational Behavior unit at the Harvard Business School and co-author of "Employee Motivation: A Powerful New Model" suggests you "find the levers where the value to the individual is greater than the cost to the company." Here are some of the tools you might rely on when budgets are tight. *
1. Praise for good work.*** This is one of the most inexpensive, and unfortunately, underused levers available to managers. Conger says, "There is a praise deficit in almost all companies." Yet praise can go a long way in demonstrating to your top performers how much you value them. Be sure to express gratitude for work that is above and beyond normal standards. Be specific and be sure that your praise is tied to a legitimate accomplishment.*
2. Challenging projects and assignments. *** To keep your top performer engaged, provide her with the opportunity to work on a new project or assignment that builds her skills and gives her a chance to shine. This might be a team project that brings your star together with other stars from different departments or functions; or this might be a solo project that demonstrates your confidence in her ability.*
When thinking of projects that you might assign, ask yourself which of your projects are most interesting and engaging to you and think about how you might delegate some of them. Select a tangible project that you know your star can succeed with. Particularly good projects are those that involve interaction with important clients or exposure to the senior most people in the organization, such as C-level executives or board members. Consider a project that relates to the current company situation. For example, you could ask your star to identify new revenue sources or explore how your company can compete is a less expensive product market. *
Be careful when assigning these projects. No one wants to hear that in lieu of a bonus they are receiving more work. Ensure she understands that the assignment is a vote of confidence and an opportunity for her to build additional skills, not a way to overburden her. *
3. Development opportunities. *** Many managers neglect to use this lever because learning and development budgets are being cut. However, there are many inexpensive or free ways to develop skills. The challenging assignment discussed above is one of them; you can even choose an assignment with a particular development opportunity in mind. You can also find your star a mentor that is more senior in the organization and perhaps shares her career interests or a similar background. If your company retains coaches for senior executives, consider offering your star a few coaching sessions. *
You can also contribute to the development of others by asking your star to teach a skill that she is particularly good at. If she is known for closing tough deals with top clients, ask her to design and lead a negotiation session for other sales people. This will allow her to serve as a role model while deepening her expertise in the area. *
4. Non-monetary perks. *** There are also a whole host of perks that cost little or nothing for you to provide, such as flexibility, better work/life balance, or more autonomy. "Companies tend to become more controlling in tough times," says Conger, and "it's important to counter that tendency." Ask your stars what matters most to them. If your star has a young family, find ways to let her work from home. If she wants to take a class at a local college, give her time off to do so. More often than not Groysberg says providing "these perks leads to the right set of behaviors." *
Manage Anxieties and Frustration ***When bonuses are cut or salaries frozen, it is inevitable that some top performers will become frustrated and anxious over their future with your organization. Your role as a manager is to respond to these frustrations. When faced with a discouraged star, Conger suggests using yourself as a model. "Ask yourself why you're staying with the company," he says and share your reasons with your star. If possible, create more of those types of opportunities for your star. *
Over-Communicate ***Open communication with your stars is critical. In fact, in tough times, managers should over-communicate to help alleviate fear and anxiety. Be transparent about the company situation and outlook for the future. Groysberg says, "The more you share information, the more buy-in you have." But be careful not to make promises you can't keep. As Conger says, "People have very durable memories." Be specific and explicit about why the star is needed at the organization. "Describe the pathway to the future in a realistic way and be candid about the challenges ahead," says Conger. *
Culture Matters More than Ever *** A strong culture is instrumental in retaining stars. Groysberg says that companies should focus on "building a strong culture versus a free agent nation" so that top performers are compelled to stay especially when the company is struggling. SAS Institute, a privately-held software company headquartered in Cary, North Caroline, has long had a commitment to retention and employee motivation. As Jenn Mann, Vice President of Human Resources at SAS Insitute says, "It's core to who we are in good times and bad times." The company provides benefits and programs that reduce stress and engage employees to focus on work. These include everything from an onsite medical facility with little to no wait times, to a 58,000 square-foot fitness center, to ensuring that work content is interesting and challenging. SAS Institute's senior executives set the example in this culture, and they communicate openly with all employees. This helps "eliminate the fear factor," according to Mann. Earlier this year, the CEO explained that this would undoubtedly be a year of uncharted territory — 40% of company revenues was from the financial services industry — but that the company was committed to not doing layoffs. A commitment they have been able to see through. Mann credits this culture of retention and communication with the company's very low voluntary turnover rate — it has remained at under 5% even when SAS wasn't able to provide merit increases this year. *
As a manager, you can't control a company culture, especially at a large company. However, your actions and interactions with your top performers contribute to that culture. Make suggestions to upper management about new policies that will contribute to retention and will make your job of keeping stars easier.
Principles to Remember ***
Do: ***
- Find out what benefits matter most to your employees
- Communicate more than you think you need to
- Be realistic about people's anxieties and frustrations *
Don't: ***
- Forget that satisfaction with an immediate boss factors heavily into people's decisions to stay with a company
- Assume that a bad economy guarantees that your star employees won't leave
- Think that money is your only tool to motivate your employees
Case Study #1: Using Flexibility to Retain Your Stars ***
Kyle Ewalt, the New York Office Manager at the management consulting firm, Katzenbach Partners, was a star employee. According to Shanti Nayak, Katzenbach's Director of People, Kyle outperformed anyone who had filled his role previously. He was hard-working, detail-oriented and had a unique ability to creatively solve problems. When Katzenbach was acquired by Booz & Company in the spring of 2009, it was clear most of the redundancies would come from the functional side. Kyle's job was in jeopardy, especially because there was not a similar role at Booz & Company that he could easily transition to. Yet, the leadership team at Katzenbach, including Shanti, CFO Amrita Bhandari and Managing Partner Niko Canner, knew they didn't want to lose Kyle. They sat Kyle down and asked, "What matters most to you right now?" He said that he loved his job but that at this point in his life, he wanted more flexibility to work on his music career. With this information in hand, Amrita worked with the New York office manager at Booz & Company to look critically at the role Kyle was playing and what was needed in the New York office. They were able to shape a flexible role that could be filled in three days a week and involved event planning, culture building, community advocacy, and onboarding. This was a winning situation for everyone involved: Kyle was happy with his new role and his increased flexibility while Booz & Company was able to retain a star performer and realize the cost savings from Kyle going part-time. *
Case Study #2: Employing Your Stars to Teach Others ***
Geoff Bartakovics, the Founding CEO of Tasting Table — a free daily email that offers the inside scoop on restaurants, bars, and all things food — knows well the challenge of rewarding stars without traditional financial incentives. As a start-up (Geoff started the company in October of 2008), the company doesn't have the same financial rewards as larger companies and Geoff has had to rely on other types of rewards to attract and retain talent. One of the key rewards is the opportunity to do exciting work and be part of a fast-growing company. "It's easy for everyone here to see how their daily efforts are contributing to creating a successful organization," Geoff said. The company doesn't have an HR department (that would be Geoff) or a formal review process. Instead, Geoff does rolling reviews based on the hire date of his 12 employees. He ends each review by asking two questions: *
- What are you going to do to get Tasting Table to the next level? **- How can Tasting Table contribute to your skill set and career plans? *
For Geoff, the best moments are when the answers to those questions overlap. Heather, Tasting Table's Chicago editor, joined the start-up from an industry publication. Soon after she joined, the company was on a team call. Geoff was discussing their need to better understand search engine optimization (SEO), something that will be extremely useful to the company, particularly as it scales. Heather mentioned that she had expertise in the area. Geoff asked Heather to take ownership over the company's approach to SEO. He asked her to hone her skills and knowledge so that she will be in a position to train others within Tasting Table. In 2010, the company is expanding their free daily email to 5 more cities. Heather will be responsible for on-boarding the 5 new editors and providing them with SEO training. *
Access Original Post: * http://blogs.harvardbusiness.org/hmu/2009/12/retaining-star-performers-in-t.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
No comments:
Post a Comment