Managing Outflow Talent Flow and Retention. Hiring and Retention: Flip Sides of the Same Coin Better hiring lower turnover Lower turnover better hiring.

Managing Outflow

Talent Flow and Retention

Hiring and Retention: Flip Sides of the Same Coin

• Better hiring lower turnover

• Lower turnover better hiring

• Both are critical to firm performance

• Both should be based on performance

• Difference: retention is less “formulaic”

Talent Flow: The Google Story

• The Google Success Story• Zero turnover

Talent Pool Depends on Flows:• Relative rate of inflow of

good vs poor performers• Rates of outflow of:

– Good performers– Poor performers

• Rates of change from:– Good -> poor

performance– Poor -> good performance

Hiring

RetentionTermination/

Turnover

Adaptation &Development

Issue 1:Why Performance Turns Negative

• Gradual– Skill obsolescence– Stress/burnout– Dissatisfaction -> negative adaptation

• Sudden– Emotional reaction to events

Work Adaptation Process

Job Satisfaction Stable Behavior

Dissatisfaction

Problem-Solving

Avoidance

Retaliation

Exit

Capitulation

Problem Behavior

Turnover

Adaptation: Problem-Solving

• Talking with supervisor• Making informal changes in job• Seeking outside help

Trying to solve the problem

Adaptation: Avoidance

• Being absent or late• Goofing off at work• Not working as hard as you could• Letting things slide that won’t be

noticed

Taking a “who cares” approach

Adaptation: Retaliation

• Towards the firm– theft, sabotage, bad-mouthing

• Towards coworkers– gossip, being uncooperative, violence

• Towards customers– poor service, theft, violence

Trying to “even the score”

Adaptation: Exit

• Physical Withdrawal– Quitting– Transfer

• Psychological Withdrawal– Alcohol/drug abuse

Avoiding source of dissatisfaction

Adaptation: Capitulation

• Perseverance• Lowering expectations• Disengagement• Health consequences

Giving Up

So What Do People Really Do?

• Asked employees to think of a time when they were dissatisfied

• What did you do?• If that didn’t help, what did you do

next?

Rosse & Saturay (2004)

Responses to Dissatisfaction

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

ProblemSolving

Planned Exit Avoidance Equity Retal Loyalty AdjustExpect

Disengage ImpulsiveExit

CatharticRetal

Initial

Followup

Source: Rosse & Saturay, 2003

NONSTUDENT Responses to Dissatisfaction

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

ProblemSolving

Planned Exit Avoidance Equity Retal Loyalty AdjustExpect

Disengage Impulsive Exit CatharticRetal

Initial

Follow up

STUDENT Responses to Dissatisfaction

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

ProblemSolving

Planned Exit Avoidance Equity Retal Loyalty AdjustExpect

Disengage Impulsive Exit CatharticRetal

Initial

Followup

Source: Rosse & Saturay, 2003

Implications of Adaptation

• • •

•

What Can You Do to Maximize Positive Forms of Adaptation?

• Create a High-Satisfaction, High-Performance work culture

• Encourage dissatisfied employees to choose Problem-Solving– – –

• Encourage collaborative approaches to conflict management

Issue 2:Why Do Employees Quit?

• Because they want to– Dissatisfied with current job (“push”)– A more attractive alternative exists (“pull”)

• Because they can– Turnover (and absence) are much higher

during periods of low unemployment– “Golden handcuffs”; family responsibilities;

age/mobility constraints

• Because they “have to” (?)

The Turnover Triangle (or “Pie”)

Workplace

Individual

Environmental

Individual Factors

• Turnover profile??– Low Conscientiousness and Emotional

Stability– High Openness to Experience

• Building self-efficacy and sense of control

• Accommodating differences in values

Environment Factors

• Economy/Labor Market

Environment Factors

• Economy/Labor Market—WHY?• Unavailability of jobs – people can’t

find jobs, or don’t want to risk looking for a job

• “Frame of Reference” effect on job satisfaction

• People with jobs are more satisfied during periods of high unemployment

Environment Factors

• Economy/Labor Market• Socio-Demographic Changes• Can’t control—how do you cope?

Workplace Factors

• Hiring the right people• Job Satisfaction

12/3/2006 MercuryNews article:

• “Employers with unhappy workers, take heed: The tables might be turning.”– “We have a little bit of a leading indicator going

on here. We know that employees are getting less satisfied with their jobs. So turnover may increase.''

• “The biggest reason for the expected worker exodus? Worker dissatisfaction.”

2005 Conference Board study: Trends

• Half of Americans are satisfied with their jobs; down from nearly 60% in 1995 – 1/4 of the American workforce is simply

“showing up to collect a paycheck.”

• Drop in job satisfaction was largest (61% to 49%) for workers aged 35 -44, and smallest for oldest workers

2005 Conference Board study:Sources of satisfaction

• Least satisfied with bonus plans, promotion policies, health plans, pensions

• Less than 1/3 of supervisors and managers are perceived to be strong leaders

• Only 1/3 are satisfied with pay• Two out of every three workers do

not identify with or feel motivated to drive their employer's business goals and objectives.

12/3/2006 MercuryNews article:• “The main lure is not better pay

elsewhere”• Least satisfied with career and affiliation,

“a strong indication that workers were disengaged with their companies.”

Survey of ~1300 workers by Sibson Consulting

Key Sources of Dissatisfaction (Rosse & Saturay, 2003)

• The Boss– Incompetence– The “Jerk Factor”

• Coworkers– Hard to live with– Not doing their jobs

• Company Policies and Practices– Esp dealing with work load and pay

• Work Challenge

Job Characteristics Model

Job Characteristics

Critical Psychological States

Outcomes

Skill Variety

Significance

Task Identity

Autonomy

Feedback

MeaningfulnessIntrinsic

Satisfaction

Responsibility

Knowledge ofResults

Retention

Quality Work

Common Job Satisfaction Factors?

• Maybe:– Adequate/fair rewards

• Financial (pay, benefits)• Intrinsic (challenge, meaning)

– Supportive work environment• Boss, coworkers, customers

– Connection with company • Values, goals, purpose

• But you need to figure out specifics

Assessing Workplace Factors

• Climate/Satisfaction Surveys

What Do Surveys Measure?Job Description Index

• Work (intrinsic factors)• Coworkers• Supervision• Pay• Promotion Opportunities• Overall

What Do Surveys Measure?Minnesota Satisfaction Questionnaire• Ability Utilization• Achievement• Activity• Advancement• Authority• Policies & Practices• Compensation• Co-workers• Creativity• Independence• Moral Values

• Recognition• Responsibility• Security• Social Service• Social Status• Supervision

– Human Relations– Technical

• Variety• Working Conditions

Assessing Workplace Factors

• Climate/Satisfaction Surveys• Exit interviews/Surveys

Assessing Workplace Factors

• Climate/Satisfaction Surveys• Exit interviews/Surveys• MBWA (Mgmt by Walking Around)• Watching for behavior that might

be caused by dissatisfaction

Bottom Line• NO MAGIC BULLETS• Turnover is inevitable• Turnover (talent flow) needs to be

managed, not reduced• Dissatisfaction is key driver of turnover

and other performance problems• Use Turnover Triangle for diagnosis• Work to (1) reduce dissatisfaction and

(2) encourage positive forms of adapting