This document discusses strategies for increasing job retention through employee empowerment and communication. It finds that empowering employees by giving them training, clearly defining their roles, and reducing bureaucracy can increase retention. Effective communication includes being mindful in phrasing, addressing millennial preferences for visual information, and promoting in-person interactions. Case studies of companies like Wegmans, Patagonia, and Google show that emphasizing employee satisfaction through empowerment and communication strategies can significantly reduce turnover compared to industry standards. However, many companies fail to implement such strategies despite the clear financial benefits of retaining employees.
8 WAYS TO CREATE WORKFORCE EXPERIENCES THAT REALLY DRIVE PRODUCTIVITY
Increasing Job Retention through Empowerment & Communication
1. INCREASING JOB RETENTION THROUGH
EMPOWERMENT & COMMUNICATION
EMILY ABSALOM 3 DECEMBER 2016
MBA 592 DR. JENNIFER EDMONDS
2. OUTLINE
Reason for Study—Current Statistics
Empowerment
Communication
Case Studies
Wegmans
Patagonia
Google
Analysis
Conclusion
3. CURRENT STATISTICS
In 2015, people aged 18-34 became largest workforce in the United States
Over 3 million Americans quit their job in December 2015, the highest number since 2006
Millennial turnover costs the United States economy $30.5B annually
Cost of replacing . . .
Entry-level employee: 30-50% of annual salary
Mid-level employee: 150% of annual salary
High-level/highly specialized employee: 400% of annual salary
40% of companies citing loss of personnel as top concern
Main factor in workplace discontentment is not wages, benefits, or hours—it’s the boss
28% of employees would rather have a better boss than a $5,000 raise
4. JOB RETENTION AS MEASURE OF SUCCESS
WHY DOES JOB RETENTION MATTER?
It’s costly
It affects business performance
Can become increasingly difficult to manage
Customer retention rates are 18% higher when
employees are highly engaged
IS LOW JOB RETENTION BAD?
Not always . . .
Some turnover is involuntary (e.g. back to school,
following a spouse who has been transferred,
came into money)
Jack Welch’s “Rank and Yank” – Eliminating
bottom 10% of company
Dependent upon industry
Hospitality
Banking & Finance
Healthcare
Insurance
5. EMPOWERMENT
Definition: to give power to; to enable; to promote the self-actualization of
Originally used as a tool for helping minorities
Adopted by academics in 1989 as management tool
A motivational construct used to increase feelings of self-efficacy
Self-efficacy: An individual’s belief in his or her capability to execute behaviors necessary to produce specific
performance attainments
“Empowerment is not a question of enlightening or infusing employees with some empowering formula, but
is rather a question of breaking down the barriers that stop employees from taking charge” -- The
International Journal of Human Resource Management
6. HINDRANCES TO EMPOWERMENT: LACK OF TRAINING
People get involved in activities and behave assuredly when they judge themselves capable of handling
situations that would otherwise be intimidating
Importance of providing employees with tools & training
High emotional arousal (anxiety) can lead to defensive behaviors & avoidance tactics
Not engaged!
How to Remedy:
Clearly define employees’ roles ; let employees know they’re trusted
Reduce information overload
Offer technical assistance to accomplish job tasks
7. HINDRANCES TO EMPOWERMENT: BUREAUCRATIC
ENVIRONMENTS
When control systems become increasingly formal and impersonal in an organization, employees’ sense
of autonomy and responsibility are diminished
33% of employees at organizations with 100+ employees are currently looking for a job at another
organization
“I believe that for the best communication and to avoid bureaucracy, you should ideally have no more than
a hundred people working in one location” – Yvon Chouinard, Patagonia founder
8. COMMUNICATION
Defined as: a process by which information is exchanged between individuals through a common
system of symbols, signs, or behaviors
Types of communication:
Verbal: Content, structure, sequencing
Nonverbal: Paralinguistic cues, gestures, facial expressions, body movements, pheromones
9. COMMUNICATION: MINDFULNESS
MindFULness: An active state of mind in which the person communicating deliberately phrases syntax
to elicit a certain response or to send a specific message
MindLESSness: A passive, often automated or thoughtless method, of sending a message
Assumptions
Repetition (despite receiver’s clear lack of understanding)
10. COMMUNICATION: MILLENNIALS + TECHNOLOGY
Unconscious mind can process 11 million bits of information per second
As much as 10 million of those bps can be connected to processing visual/multimodal sensory information
Conscious minds can only handle ~40bps
Meetings, conferences, & events provide stimulation, re-engagement, and emotional interest
The water cooler effect
“In this information age it’s tempting for managers to manage from their desks, staring at their computer
screens and sending out instructions, instead of managing by walking about and talking to people” – Yvon
Chouinard
11. CASE STUDY: WEGMANS
Regional supermarket chain
Headquartered in Rochester, NY
88 stores
46 in NY
17 in PA
7 in NJ
7 in VA
4 in MA
Over 45,000 employees
$7.9B in annual sales in 2015
13. WEGMANS’ EMPLOYEE FIRST MODEL
Jobs characterized by low complexity, repetition, or minimal training, relatively low wages and high rates
of turnover
In an industry where extensive training and education is viewed as nonessential, Wegmans views
training an intrinsic part of its success as a corporation
“Our employees come first, and we mean it” – Bob Wegman, former CEO & Chairman
Deliberate approach to incredible customer service
14. WEGMANS—JOB RETENTION
Wegmans enjoys an amazingly low employee turnover rate of 8 percent in an industry that averages 50
percent
The smiles you receive from Wegmans employees are not the vacuous, rehearsed grins you get at big-box
retailers. They are educated smiles, with vast stores of knowledge behind them, cultivated perhaps through
company-sponsored trips to Napa Valley's Trinchero winery. After all, what good is it to offer 500 types of
specialty cheeses if you can't explain the origin of each, what type of cracker to serve them on, even what
wines they should be paired with? ‘If we don't show our customers what to do with our products, they won't
buy them," says Danny Wegman. ‘It's our knowledge that can help the customer. So the first pump we have
to prime is our own people’
15. CASE STUDY: PATAGONIA
Privately-held outdoor clothing company
Headquartered in Ventura, California
Founded by Yvon Chouinard
2,000 employees
71% women
$540M in annual revenue
Patagonia’s turnover is 7%, when other apparel
retailers commonly see turnover of over 100%
annually
One employee quit in June 2016
16. PATAGONIA’S HIRING PRACTICES
Receives 900 applications for each job opening
Hires from within to keep company culture strong
Offers comprehensive health insurance, even for part-time employees, to attract the most serious
athletes to the retail stores
“We seek out ‘dirtbags’ who feel more at home in a base camp or on the river than they do in the office.
All the better if they have excellent qualifications for whatever job we hire them for, but we’ll often take
the risk in an itinerant rock climber that we wouldn’t on a run-of-the-mill MBA. Finding a dyed-in-the-wool
businessperson to take up climbing or river running is a lot more difficult than teaching a person with a
ready passion for the outdoors how to do a job” – Yvon Chouinard
17. GREAT PACIFIC CHILD DEVELOPMENT CENTER, INC.
Houses over 100 children, 8 weeks through 9
years old
Run by teachers
Bilingual
Trained in child development
Field trips to beach, horse rescue, library
Can play in “kitchen” and in backyard
“When kids are in the same place and have the ability to trust the
adults around them to love them and care for them, they have the
energy to do what they need to do in all areas of development.
They become more articulate and tend to have higher self-esteem”
– Anita Furlow
18. CASE STUDY: GOOGLE
Publicly traded American multinational
technology company
Headquartered in Mountain View, California
62,000 employees
$74.5B in revenue
19. GOOGLE’S PERKS
Free gourmet cafeterias
Massage rooms
Nap pods
Haircuts
On-site doctors
Billiards, rock climbing wall, company pool
Free laundry; dry cleaning available
20. GOOGLE’S LOW RETENTION
Employee remains at Google a median 1.1
years
Average employee age is 29
Admittedly, a difficult industry—high churn
#1 on Fortune’s 100 Best Companies to Work
For
7th time in 10 years
As of Feb, 2016, 1,000 job openings
2.7 million applicants
21. FORMER EMPLOYEES SPEAK OUT
EMPOWERMENT-- "I'd say the relentless daily mediocre thinking of middle management types who are
completely focused on metrics to the exclusion of all other factors. They don’t want to rock the boat, they
don't know how to inspire their workforce, and they rely far too much on the Google name and
reputation to do that for them.”
“I worked at Google for three years and it was very difficult to leave, but there was one major factor that
helped me make my decision – the impact I could ever have on the business as an individual was
minimal”
COMMUNICATION--"It is really hard to discuss any issue unless it is your friend you are talking to," said
a former employee. "Objective discussions are pretty rare, since everybody's territorial, and not
interested in opinions of other people unless those people are Important Gods."
22. IF THESE CONCEPTS ARE SO SIMPLISTIC, WHY AREN’T MORE
COMPANIES DOING IT?
Companies are not looking at data
Unaware of financial gain
People analytics
Deterred from implementing company-wide
policies due to barrier to entry
High capital investment
23. Questions?
“I've learned that people will forget what you said, people will forget what you did, but people will never
forget how you made them feel.” ― Maya Angelou
Editor's Notes
Will focus somewhat on millennials, as they are now the largest workforce, but is a problem spans beyond generational issues
Teams led by manager who focuses on weaknesses are 26% less likely to be engaged
Employees who believe their managers can name their strengths are 71% more likely to feel engaged and be energized
Higher workplace engagment leads to 37% lower absenteeism, 41% fewer safety incidents, & 41% fewer quality defects
Is turnover bad????
Lengthen tenure of very best people
Disruption to team productivity
Reducing turnover rates has been shown to improve sales growth and workforce morale
Employees should be expected to take charge on behalf of their organization.
Enactive attainment, or “an individual’s authentic mastery experience directly related to the job” can test their self-efficacy through moderate increments in task complexity.
Hiring practices, so employees can emulate successful, resilient peers
Often times, managers underestimate the power of words of encouragement, verbal feedback, and social persuasion as an empowerment technique.
Open door policy
Organizations should aggressively seek to identify and remove barriers that prevent individuals from using their expertise. Solving the customer’s problems in innovative, value-creating ways—not navigating organizational impediments—should be the challenging part of one’s job.
Oftentimes, leaders have difficulty relinquishing control; employees are less productive when a manager is watching over them
Yet another common counterforce to empowerment is the concept of proportion of an employee’s salary in relation to the number of sales. This structure creates a short-term and individual network oriented attitude. Instead, managers should look to change the salary structure of the organization to reduce or eliminate this myopic and short-sighted mindset. Bonuses for short-term goals produce short-term goals. Management must look at the growth strategy of the organization and incorporate those goals into their corporate and salary structures. Management must also inform employees of its long term plans to increase employee “buy in” and productivity, and change the institutional programs or vehicles to complete these goals. Empowerment changes often fail because the changes asked of employees are not supported and rewarded throughout the organization
Mindless communication does not always fall on the message sender; oftentimes, those persons receiving messages automatically process messages a certain way—failing to consider alternatives. Thus, it is important for managers to know their employees on a personal level to understand how best to communicate effectively with their employees.
Left inferior frontal cortex and inferior parietal cortex have been known to be closely related to action understanding and imitation; inferior frontal cortex particularly associated with empathy and social cognition; increase in changes in activity when participants sat facing each other—none when back-to-back
Technology not developing verbal skills or emotional intelligence; can re-write a child’s brain pathways; their neural pathways change and different ones are created. It affects concentration, self-esteem, and in many cases they don’t have as deeply personal relationships. They lose empathy. We’ve seen kids like this that don’t develop the sympathetic and empathetic skills they need.
Wegmans has appeared on Fortune’s annual “100 Best Companies to Work For” list since it first appeared in 1998, and has ranked among the Top 10 for eight consecutive years. Consumer Reports ranked it the top large U.S. grocery chain in 2012 & 2014.
When the “quality of service and individual craft skills contribute to success, managers and supervisors are instrumental in creating a work environment where employees perform at their best” (Risher, 2013 p.1). Wegmans’ extensive training programs and hands-on management style increases both employee and customer satisfaction.
The trickle-down effect of placing employees first is then that the customers are naturally taken care of, which helps the bottom line.
Its emphasis on developing persons has paid huge dividends, for employee satisfaction, customer loyalty, and repeat business.
Wegmans’ policy is not to open a store until employees are developed—a cost of fifty million dollars per store. “The brand is the people; it takes time to develop people,” Hallagan stated.
The employees’ vested interest in the production of gear ultimately benefits the corporation—not only by having the best ideas presented for equipment, but also because enthusiastic employees will remain with the company, creating lower turnover and ultimately helping the bottom line.
Over 30 years later, Patagonia moms now enjoy 16 weeks paid maternity leave; fathers and adoptive mothers are allowed 12 weeks leave, fully paid. Patagonia pays for any nanny or partner to travel with an employee for work. And “if a partner can’t come, one of the teachers can”
“They are being raised by the whole village, with lots of stimulation and learning experiences”
Mothers and fathers can have lunch with their children in the cafeteria, moms can nurse their babies, and can have access to the on-site child-care center any time throughout the day. “A mother nursing her child during a meeting, commonplace in Ventura, is a regular reminder that career versus child choices so many of us make in fact need not be choices: (Chouinard, 2006, p. 173). For school-aged children, Patagonia buses the kids after school to the child-care center “allowing parents to connect with them after school over chocolate milk” (Anderson, 2016, p. 2). The child-care centers—one in Ventura, CA, and one in Reno, NV—are not free. Tuition is based on market rates, and a parent can expect to pay an average of $1,275 per month at the Ventura site (Anderson, 2016). Because of the funding from subsidies, however, Patagonia can afford to charge less than comparable daycare centers.
While the on-site child-care facility may sound like a utopia, and too costly for other American corporations to implement, Patagonia’s child-care center is profit-making. The federal government grants qualified child-care programs an annual $150,000. Thirty-five percent of unrecovered costs are tax deductible, totaling $500,000 in recouped tax costs. Because of the nurturing environment of Patagonia, many moms choose to return to work after maternity leave, saving Patagonia 30% of their costs in employee retention. Parents who work as employees at Patagonia have a 25% lower turnover rate than the general Patagonia employee population (Gillett, 2016). An additional 11% is recouped due to employee engagement; when employees feel supported at work, they commit wholeheartedly, increasing Patagonia’s business and financial performance. Current CEO Rose Marcario encourages other businesses to adopt onsite child-care facilities, not just because she considers it “the right thing to do,” but also because it has proven lucrative for the company.
Data shows not great at hiring
Business Insider
Employees don’t possess intellectual humility; don’t know how to fail
Look at emotional intelligence!!!
Psychological contract
