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TTI People Energizing People Newsletter August 17, 2010

In case you haven’t noticed, a lot of what we used to know even two years ago isn’t necessarily true in today’s changed business climate. How many outdated ideas do you have about the employment world? Read each question in bold to decide if you think it’s true or false before reading the answer below.

1. Employees always leave managers, not jobs. Wrong. Employees leave jobs even when they like and respect their manager because the fit between their talents, interests and skills isn’t good enough to give them quality of life on the job. In fact, struggling in a job where you spend Sunday night dreading going to work on Monday morning is a dead giveaway of a poor job fit. All jobs have a unique profile of distinct skills, attitudes and behaviors that are required for best performance, just as people have their own unique profile, too. When a person is matched to a job that requires the combination of behaviors, skills and attitudes that come naturally to them, achieving superior performance isn’t a struggle, it’s a challenge they can win.

2. Our superior performing employees may secretly be waiting for the economy to open up more jobs, so they can find another job with more money and opportunity than we can offer them right now. In the present economy with budgets so tight that raises and incentives have been cut almost across the board, employee surveys show that this is absolutely true. But it doesn’t  mean you can’t deepen your superior performers’ bond to your company. Savvy employers are investing in professional development that helps them develop talent from within. By doing this, they help current employees improve their performance now, while preparing them for upcoming leadership roles. People understand that budgets are tight right now, but when they see their company’s willingness to develop their skills, they recognize it as a vote of confidence in their potential and their value to the organization. Nothing says “We’ll give you a raise when we can” like investing in an employee’s career development now.

3. If my company asks me to take an assessment, it must mean they think I’m not good enough to do my job and they want an excuse to fire me. If you said that nothing could be further from the truth, you’re right. Just as employees are slow to leave a good job right now, employers are realizing that it’s much more cost effective to mine the talent they already have rather than to start from scratch with someone new. Using assessment reports is a strategy that smart companies are using to build bench strength so they are ready when business picks up. If your employer has asked you to take an assessment, congratulations! You’ve been identified as an employee with high potential to become a superior performer or next-generation manager.

4. Behavioral and values assessments are NOT like personality tests. If you agree with this statement, you’re right. Behavior and values assessments are statistically validated ways to see what a person’s natural style is for communicating on the job, how they like to manage their workflow, how they respond to a changing work environment, and what aspects of the job can make it deeply satisfying beyond the paycheck. Using assessment reports to identify a person’s strengths is a great way to make sure the company is deploying an employee in the right job to play to their strengths and develop more.

5. Managing other people to achieve peak performance is only possible if you’re a really accomplished, experienced manager with a long track record of success, or a manager with too much time on your hands. If you recognized this thought as so outdated that it’s last millennium, you’re right. In the age of research validated job benchmarks and assessments, it’s possible to pinpoint exactly what a person’s workplace strengths and weaknesses are. Smart companies are using the latest technology, available online, to not only generate an assessment they can review with the employee, but to ‘prescribe’ professional development modules that the employee can use anywhere they have access to the internet. Managers can review performance goals and contribute suggestions online, too, without having to micromanage either performance or professional development.

“Reprinted with permission from  Ira Wolfe  and Success Performance Solutions. Copyright 2010 Ira S Wolfe.”– The Total View Newsletter 7/14/2010

The assumption that NBA superstar LeBron James would demonstrate blind loyalty to his hometown Cleveland Cavaliers should have surprised no one if they had been paying attention to the world views of different generations.

While Baby Boomer and Veteran workers placed a high value on undying loyalty to the organization, Generation Y (born 1980-2000) are looking for opportunity, mobility, and work-life balance. One survey, released in 2004 by Harris Interactive, found that only 47% of those 18 to 34 years old “really care about the fate” of the enterprise for which they work. That compares with 64% of those 55 and older. In other words, younger workers don’t see themselves sticking around in any one place too long.

Ironically they don’t see themselves as disloyal. Loyalty for Generation Y, sometimes called Millennials, feel loyalty is as much as spiritual thing as it is physical.

A recent analysis by Princeton economist Henry Farber shows that the percentage of private-sector male workers who’ve been with the same employer for at least 10 years fell from 50% in 1973 to just 35% in 2006, and the proportion of those with 20-year tenures dropped from 35% to 20% over the same period.

The erosion in loyalty is not the fault of Generation Y alone. Greedy corporations, widespread outsourcing, and wholesale layoffs have soured almost every generation toward blind loyalty to the business enterprise.

In his book, “The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace,” Ron Alsop cites a study in which two-thirds of 18- to 28-year-olds said they plan to “surf” from one job to the next. And 44%, he reports, go so far as to say that they’d renege after having accepted a job if a better offer came along.

The over-hyped LeBron James saga is over but how it played out should serve as a wake-up for every executive and business owner. Throwing buckets of money and lavish benefits may still work when acquiring top talent but it’s no longer enough to retain high-potential and high-performing young workers.

“Reprinted with permission from Ira S Wolfe and Success Performance Solutions. Copyright 2010 Ira S Wolfe.” –The Total View Newsletter 7/7/2010

Employee turnover is inevitable. But it’s stupid decisions leading to employee turnover that is eating up the profits of businesses.

A glaring example of management drinking its own Kool-Aid is something I call “industry-average syndrome,” where managers accept turnover as normal because it’s near or slightly under the industry average. My mother used to reprimand me when I got in trouble with friends by asking, “if your friends jumped off a bridge, would you follow?” Apparently many employers heard that same message too. Unfortunately, rather doing a little critical thinking, they are literally jumping off the bridge when it comes to managing employee turnover.

It’s a sure thing that workers will come and go for reasons ranging from unpredictable life choices to avoidable stupid hiring decisions. There will always be turnover. But using the industry average as your standard is a copout and a very bad practice. That thinking might have worked when margins were high and it was easy to raise prices, but it’s unacceptable if you want to stay in business today.

Employee turnover should be treated like a cancer, not the common cold. The cost of turnover is staggering. The effort and sales needed to recoup these costs can be devastating.

Management has no one to blame but itself in many cases.

Research studies have consistently shown that turnover in North America ranges between 25-30% on average. With estimates for the true cost of turnover ranging from 25% for entry level jobs to 250% or more of annual salary for senior management, it’s not rocket science to realize that this can’t continue. These averages deceive management and suck time away from projects, resources and profits to reinvest for growth and innovation.

In a recent study by the Canadian Grocery Human Resource Council (CGHRC), participants reported an overall employee turnover rate of 38.7%, with an average voluntary turnover rate of 31.7%. The study concluded that turnover should be defined as “an expense without an invoice.”

Additional research by the Canadian Food Industry Council (CFIC) found that the cost of turnover; finding, interviewing, training and equipping a new hire; is at minimum $1,500 per frontline employee.

Now $1,500 may not really sound like a lot of money until you factor in that nearly four out of every 10 new employees leave for whatever reason. To put that $1,500 figure into perspective, consider what it takes for one store to recover that cost: If a store’s net margin is 1.5-3%, the store has to sell $60,000 worth of groceries to recover the cost of losing a single employee!

If that doesn’t give management pause for thought, what will?

The first step in reining in runaway labor costs is to calculate what your cost of turnover is in the first place. In other words, for every employee you need to replace, what does it cost you to recruit, hire and train a replacement? I’d then take it one step further: how many sales does it take to recover those costs?

Take a few minutes to figure out what it costs you every time an employee goes home and doesn’t return…and how hard you have to work to recover this expense without an invoice.

“Reprinted with permission from Ira S Wolfe and Success Performance Solutions. Copyright 2010 Ira S Wolfe.” – The Total View Newsletter 6/23/10 (Source: Workforce Trends)

Which is better: employee retention or loyalty? The answer isn’t as obvious as one might think.

Over the past two weeks I’ve overheard the following remarks from disgruntled, long-term employees:

1.  “All the owners care about is the money.”
2. “They’ll never pay me what I deserve anyway.”
3. “No one understands how miserable my life is except the people I work with.”
4. “I’d walk out right now, but I need the health benefits. Besides I only have 12 more years until retirement.”

How would like to have these employee interacting with your customers on a daily basis? It happens every day and many employers don’t do a thing about it. Why? Because often these are the same employees who show up day-after-day, month-after-month, year-after-year. They are rewarded and recognized for perfect attendance and dependability and yet hate their jobs. I’ve even heard them described as “loyal.” That’s a big mistake. Employee negativity is such a downer.

Several years ago, I was introduced to the Quality of Motivation Theory. It turned out to be one of the most valuable tools I have in assessing individuals and company cultures. The Theory explains the positive and counterproductive motivational skills that people use every day.

Essentially, positive skills help you gain long-term benefit and satisfaction while counter-productive motivational skills provide short-term outcomes and long-term negative consequences. When applied to the workplace, counterproductive motivational skills expose the overlooked chasm between long-term employee retention and loyalty. The specific counterproductive skill that holds the key to why dissatisfied people who hate their jobs keep coming back is self-martyrance.

The emotion driving the self-martyr is hopelessness. The effect that the self-martyr has on personal and company morale is devastating. Understanding counter-productive behavior sheds a whole new light on how rewarding the wrong employee for loyalty can have a damaging impact on the retention of top performer employees.

Self martyring employees believe every employer is out to take advantage of them. They ask, “why should I bother looking elsewhere? Every company, job, and boss is the same.” They stay put not because they are good loyal employees but because they blame their unhappy existence on everyone else. They lack the ambition to change and yet are recognized for their loyalty. What effect do you think this has on other motivated, ambitious employees? If you’ve ever had to work with people like this who felt “stuck,” you’ll recognize what I’m talking about.  How long did you last?

Ironically, self martyrs who hate their jobs often belong to a clique of employees just like them. They all feel the same about work and life in general. These friends support their notions that life is a bitch and everyone is out to get them. Unfortunately if they quit, they would have to break into a clique or train their new co-workers why the little guy gets the short stick every time. Starting all over in a new job in a new place is just too difficult. These self-martyring employees are likely to stay until he or she wins the lottery or receives a one-way invitation to the unemployment lines.

Self-martyrance is also like an aphrodisiac. It has a powerful pull. Even the motivated and engaged employee during difficult times succumbs to the peer pressure: “Maybe they’re right. Who am I to think I can make a difference. Look, these employees have been here a long time and look how they’re treated.” Many of us have been sucked into this sinkhole of hopelessness only to one day wake up and extract ourselves from the pit.

That’s exactly what happens when a company mistakes self-martyrance for loyalty: martyrs stay and top performers leave. The loss of key productive employees may be the result of your retention policies and recognition programs. Ironically, your most loyal employee may be the one who just walked out the door.