When is employee turnover good

Disengaged workers sap the workplace of enthusiasm, energy and productivity. When employees who are performing at marginal levels leave the organization, it inspires remaining workers and returns the workplace to a team-oriented work environment where everyone is focused, driven and interested in doing a good job.

The strain placed on an organization by managing employees whose presence affects the entire workforce is lifted when those employees are separated from the company. When long-term employees leave, the company is no longer in debt for high wages tenured employees earn.

Employers can reconfigure their compensation practices and set new starting salaries for less experienced workers. The cost to maintain long-term employees is also expensive where benefits are concerned.

Companies that raise their retirement savings contributions for tenured employees start over fresh at lower employer contribution rates. Insurers base their premiums on age. He feels he is responsible for his own success and is constantly on the lookout for new opportunities. A good boss for this employee understands the politics of getting the job done, knows how to bargain, and is firm but fair. A job which allows for the development of friendly relationships with supervisors and others in the work group appeals to this employee.

Working with people toward a common goal is more important than getting caught up in a materialistic rat race. He likes a boss who gets people working in close harmony by being more a friendly person than a boss. This employee likes a job where the goals and problems are more important than the money, prestige, or how it should be done.

He prefers work of his own choosing that offers continuing challenge and requires imagination and initiative. To him, a good boss is one who gives him access to the information he needs and lets him do the job in his own way. Exhibit IV tabulates the top ten reasons employees stay, based on their psychological level.

It shows a startling dichotomy. Employees possessing relatively high tribalistic or egocentric values stay mainly because of environmental reasons, whereas employees with relatively high manipulative or existential values stay primarily for inside-the-company reasons, many of which are motivational. We also found that the tribalistic or egocentric employees are located primarily in the low-skill manufacturing functions and that manipulative or existential employees are located primarily in management, research, or professional positions.

Exhibit IV. Although not all the implications are clear at this point, it seems apparent that corporate managers, in deciding on policies and philosophy, in reality have been talking to themselves about themselves. That is, they tend to adopt policies and theories of human motivation that appeal to their own individual value systems, under the assumption that all employees have similar values.

For example, many a manipulative manager presumes that money and large, status-laden offices motivate other people in the same way they drove him to his present level of success. He may have climbed the corporate ladder, but as our results clearly show, for many employees the ladder does not even exist.

This is not meant as a criticism of managerial value systems, but as a description of reality. One can expect leaders, whatever their values, to adopt policies which most appeal to their own value system. An individual makes a decision based on what he thinks is right.

What is right depends on his values. However, since values of people are not the same, what is right to the manager is often wrong for the employee.

We further explored job retention and values by linking data on values and reasons for staying. This enabled us to determine the values of those people who stay because they like their jobs and those who said that their jobs were not reasons for staying.

We found that employees who stay because they like their jobs tend to be relatively manipulative and existential; and those who continue for reasons not directly associated with their jobs tend to be tribalistic and egocentric. We also found that the tribalistic and especially egocentric workers were relatively more dissatisfied with motivation factors than were employees with other value systems. The least dissatisfied employees had existential values, followed by the manipulative and conformist employees.

This is not too surprising, considering the fact that the free enterprise system tends to reward conformist and manipulative values, and existential people stay only as long as they are happy. Exhibit V demonstrates again the hidden power of environmental factors. It presents the percentage responses of employees scoring the highest ninetieth percentile or greater in each value system—that is, the employees who fit most clearly into each value system. The data show a dichotomy between employees with relatively high manipulative or existential values Levels 5 and 7 and other employees, especially those with relatively high tribalistic or egocentric values Levels 2 and 3.

Almost without exception, people of Levels 5 and 7 place less emphasis on external environmental reasons for staying than do people with other values.

Thus whereas age, length of service, type of work and skill level, race, and education describe who stays, and for what reason, the underlying value system explains why. But can we, as managers, really use these facts to improve employee retention?

Is there a positive approach to keeping people that is more effective than focusing on the negative element of turnover? Because managers have habitually concerned themselves with turnover, it will be hard to break the habit. Nonetheless, managers must stop the rituals of finding out why people leave and start investing resources in the positive management of retention. If managers reinforce the right reasons for employees staying and avoid reinforcing the wrong reasons, they cannot only improve traditional turnover statistics but set goals for retention.

However, they must begin to understand and respect employees as individuals with values that differ from their own. As a prerequisite to the development of a program to manage retention, certain difficult questions must be answered:.

We have obtained some quantitative insight into the first three questions, but the last two may not have a quantitative solution. For these we offer our value judgments. Ideally, it seems that the goal of managing retention would be to create conditions compatible to the turn-ons-plus—that is, some balance between job satisfaction and environmental reasons. This raises some questions. To begin with, managers might make pensions highly portable, a measure that would tend to reduce inertia but raise costs.

To balance this, it would then be necessary to improve the conditions for satisfaction so that people stay because they want to, not because they must. Another influence on inertia is the location of a company. For example, a corporation that locates a new factory, offices, or laboratories in towns that are not highly attractive or requires the relocation of many employees has weakened inertia; thus employees are more likely to leave when they become dissatisfied with their work.

Some compensatory maneuver may be called for. Again, corporations which locate plants in small towns, and draw primarily from the people who were born and reared in those communities, are building in inertia that tends to increase retention and decrease turnover—perhaps too much so. For another aspect, consider corporations with headquarters in New York City.

They may find their employees have very low inertia because it is easy for people to simply get off the subway at a different stop, or even get off the elevator at a different floor, and find themselves in a different corporation.

That is, they can change jobs without changing their outside environment. In this case, inertia to stay with the present employer may be very weak, but there might be strong inertia to stay in the same general locale. Will an employee leave when the level is —5? Theoretically, perhaps, he will; but realistically, the answer depends on the strength of inertia.

Help with coaching. And identify multi-skilled team players who have the ability to transfer from one department to another instead of hiring from outside. Christina is an experienced leader with a passion for improving the employee experience, employee engagement and workplace culture.

Few things excite her as much as an opportunity to try something unfamiliar be that a project, development opportunity, travel destination, food, drink or otherwise , though digging in to a research project is a close second.

Subscribe to Insights. Thank you! Follow Us. The pace of technology brings new opportunities, challenges, and demands upon a workforce. Some companies have effectively implemented a culture where employees continually improve or leave.

While critics deem the policy as cruel, proponents argue that it is essential to effectively compete in a modern world. Whatever your conclusion, one thing is certain: GE has long been recognized for its industry and innovation leadership. According to Thomas F.

And according to Dick Grote, president of Grote Consulting and author of Forced Ranking: Making Performance Management Work, 60 percent of Fortune companies have engaged in some form of forced or stacked ranking, including Microsoft, Dell and Accenture.

The process, managed by HR Departments, requires that managers rank their employees according to one of three categories:. Complacency is the enemy of every organization, fostering an environment of group-think and an aversion to risk-taking.

As a result, the company was forced to file for bankruptcy in and is now merely an administrative shell. The growth of bureaucracy is an ever-present danger in any organization.

It replaces innovation and initiative with stagnant hierarchies, defensive managers and formalized rules and procedures, all of which are intended to protect the status quo. All organizations, even those lauded for their enlightened personnel policies, such as Apple and The Container Store, evaluate individual employee performance in order to identify those worthy of promotion and salary increases and those in need improvement.

Using a ranking system with a performance appraisal component adds rigor to the process by forcing reluctant managers to address performance issues.