Sunday, January 11, 2009

A Different Paradigm for an Employer Crisis

Here's a guest post by Don and Sheryl Grimme:

There is a crisis in America today. The one we’re talking about to has nothing to do with telemarketing, as annoying as that is … or even the dismal economy. Rather, we’re referring to the diminishing ability of organizations in every sector of our society to attract, retain and motivate talented employees, that is: to survive.

It is especially employee retention that has emerged as the workplace issue of the decade, For example, in 2006, SHRM’s Workplace Forecast predicted that the #1 employment trend most likely to have a major impact on the workplace is: a greater emphasis on retention strategies. Our long-held assumptions of an ever-expanding talent pool have been shattered, notwithstanding the recent rising unemployment rate. You see, more than a shortage of bodies, this is a crisis is of abilities – the talent in ‘talent pool.’

Fortunately, every crisis contains not only danger, but also opportunity … if you know how to tap into it.

Employers are groping at ways to attack the problem. A 2005 SHRM survey found the techniques being used are: salary adjustments, job promotions, bonuses, more attractive benefits and retirement packages, and stock options. All of which are expensive and not very effective. The reason, as you will see, is that they are misdirected.

Rather than leaping to implement techniques, we maintain that it is important to begin with an understanding of what really does energize and instill loyalty in employees. Otherwise, you won’t know whether any technique is effective; and you won’t be that effective in implementing it.


To provide this understanding, we propose a 3-Factor Theory of employee motivation, which consolidates a few other theories (e.g., Maslow’s Hierarchy, Hertzberg’s 2-Factor, and the Kano Model of Customer Satisfaction) – from an employer’s perspective:

Employers satisfy Maslow’s fundamental survival, safety and security needs primarily through a pay check and benefits plan, i.e., “Earnings & Benefits.” That’s how employees buy groceries, put a roof over their heads and ensure against life’s contingencies.

1. In the workplace, our highest-level need of self-actualization and much of our self-esteem are met through the work itself, i.e., “Job Quality.”

2. Employers can address Maslow’s center rung of social and belonging needs, as well as self-esteem, with “Workplace Support,” e.g., supervision, teamwork and recognition.

Each of these 3 factors is different in nature and effect:

1. As Hertzberg maintained, the absence of Earnings & Benefits is demotivating. These are what Kano calls basic needs. If a job’s pay and benefits are inadequate to pay our bills, we won’t even start work. And if we feel unfairly compensated, we'll gripe and complain. But we're not really motivated by overpay or lavish benefits. Not saying we won’t enjoy them, but they’re not truly energizing.

2. In contrast, the very presence of Job Quality is motivating – Kano’s excitement needs. The greater our sense of achievement and the more involved we are in our work, the more energized and excited we will be. This really turns us on!

3. We maintain that Workplace Support factors are both demotivators and motivators – Kano’s performance needs. A lousy supervisor, coworker frictions and lack of appreciation will drain our energies. But the better our supervisor is, the more cohesive our team and the more appreciated we feel – the more energized we will be.

Put another way: We will go to work for a paycheck and a benefits plan. But we won’t really do work (or, at least, our best work) unless something else is present. It is the quality of the work itself and of our relationships with others at work, which draws us to the best organizations and keeps us there – energized and performing at peak effectiveness.

So what!

That is, what use does this theory have to you as a workplace leader? Well…

These concepts can become your mental model or paradigm – guiding you as you interact with your employees on a day-to-day and minute-by-minute basis. It’s a very different paradigm from the carrot & stick approach typically used; and is much more effective in getting the bottom-line results you want.

You can think about your own behaviors and your organization’s current policies, practices and programs from what may be a different perspective. Are they working for you? Are they consistent with these principles? What changes can you begin making?

And you can anticipate the efficacy of new initiatives under consideration. For example, to reduce turnover, does it now make sense to rely on salary increases, promotions, bonuses, benefits, retirement packages and stock options?

We think it make more sense to:

1. Pay them fairly.
2.Treat them GREAT!

As for how to treat them great, see: Top Ten Tips to Motivate & Retain Talented Employees.
OR As for how to treat them great, see the ten tips shown on our Employee Retention HQ website.


The Grimmes are nationwide trainers and speakers … and authors of the groundbreaking new book on managing people in today’s workplace, The New Manager’s Tool Kit (AMACOM, 2008).

Top Ten Tips to Motivate & Retain Talented Employees
By Don and Sheryl Grimme

#1: Pay employees fairly and well … then get them to forget about money.

#2: Treat each and every employee with respect.
Show them that you care about them as persons, not just as workers.

#3: Praise accomplishments … and attempts.

#4: Clearly communicate goals, responsibilities and expectations.
NEVER criticize in public – redirect in private.

#5: Recognize performance appropriately and consistently.

#6: Involve employees in plans and decisions, especially those that affect them.
Solicit their ideas and opinions. Encourage initiative.

#7: Create opportunities for employees to learn & grow.
Link the goals of the organization with the goals of each individual in it.

#8: Actively listen to employees’ concerns – both work-related and personal.

#9: Share information – promptly, openly, and clearly.
Tell the truth … with compassion.

#10: Celebrate successes and milestones reached – both organizational and personal.
Create an organizational culture that is open, trusting and fun.

[The Grimmes acknowledge Bob Nelson, author of 1001 Ways to Reward Employees, for his initial formulation of a similar "Top 10 Ways to Motivate Today's Employees"]


CherryPie said...

There are some good tips there.

Anonymous said...

Perhaps a true paradigm shift is to embrace employee turnover as just part of organizational evolution.

While it is certainly important to "attract, retain and motivate talented employees", we submit that it is equally, if not more, important to continuously develop talent in organizations.

In today's highly globalized business environment, the most talented individuals will continue to be tapped on the shoulder and offered new challenges elsewhere. We submit that talented individuals, by their nature, will always be excited by fresh challenges; and while they may be perfectly happy where they are and with what they are doing, they will never dismiss other opportunities when these are presented to them.

It is up to organizations to make sure that proper succession plans are in place, not only as a means to replace talent when they leave, but to develop and promote talent at every opportunity.

Dan McCarthy said...

A Friend -
Thanks, that makes sense. However, I think there's good turnover (leaving for a better, different opportunity) and bad turnover (leaving because you're being mistreated). I think we accept, even embrace as you say the good, and try to prevent the bad (it's costly!).

The Back Rub Company said...

We have seen many of our corporate clients use services like on-site chair massage, fitness classes, wellness workshops, etc. as incentives to retain employees. It seems small but it makes a huge impact on the employees and it's very cost-effective.