Retaining Good Employees in Tough Times Retention of valued employees is essential to maintaining liigh levels of quality service and efficiency in consideration of the tight labor supply and an increasingly competitive health care market. Health care organizations that desire to become "employers of choice" must devise strategies and innovative programs which will satisfy a spectrum of both work ;uid personal needs. Such initiatives include tangible rewards such as competitive compensation and benefits, and, more important, valued intangibles Uke quality of work life programs. In a more attractive environment, employees will make a long-term commitment. Key words: employee retention, employee retention strategies Peggy Anderson, PhD Professor of Human Resource Management College of Business and Economics University' of Wisconsin-Whitewater Whitewater, Wisconsin Marcia Pulich, PhD Professor of Human Resource Management College of Business and Economics University of Wisconsin-Whitewater Whitewater, Wisconsin INTODAY'S tightlabormarket, retentionof existing employees is now as important as recruitment of new ones. In addition to finding better ways to attract people, organi- zations also face major challenges from em- ployees who are willing to "jump ship" for various inducements offered by competitors. Attracting good people is just one side of the employment equation; retaining them once they have been hired is the other. The so-called traditional model of em- ployee behavior, in terms of expected loyalty and commitment in retum for guaranteed employment, is no longer the norm. Younger workers now entering the labor market do not have the same work priorities of those who joined the labor force in eariier years. They also have learned that lifetime job security is no longer guaranteed. This becomes evident when one looks at the myriad of mergers, consolidations, and re-engineering activi- ties, with their resulting staffing cuts, which have taken place in the past decade. The health care industry in particular has been directly involved in these restructurings. In- 50 Health Care Manager. 2000. 19(1), 50-58 ©2000 Aspen PubUshers, Inc. Retaining Good Employees in Tough Times 51 creased operational efficiencies are necessi- tated by continuing changes in government initiatives, regulations, and reimbursement policies, along with intense pressures from constituent groups such as patients, con- sumer advocates, employers, and insurance companies. As a result, more restructuring through the use of improved technologies and processes can be expected, which in turn will affect staffmg requirements and increase pressure for retaining quality employees. Health care organizations can attain the status of "employer of choice" by offering current employees a well-designed package of tangible and intangible incentives and motivators, thereby developing a competi- tive advantage in recruiting and retaining staff. This article will address wa ...

1. Retaining Good Employees in
Tough Times
Retention of valued employees is essential to maintaining liigh
levels of quality service and efficiency in
consideration of the tight labor supply and an increasingly
competitive health care market. Health care
organizations that desire to become "employers of choice" must
devise strategies and innovative programs which
will satisfy a spectrum of both work ;uid personal needs. Such
initiatives include tangible rewards such as
competitive compensation and benefits, and, more important,
valued intangibles Uke quality of work life
programs. In a more attractive environment, employees will
make a long-term commitment. Key words: employee
retention, employee retention strategies
Peggy Anderson, PhD
Professor of Human Resource
Management
College of Business and Economics
University' of Wisconsin-Whitewater
Whitewater, Wisconsin
Marcia Pulich, PhD
Professor of Human Resource
Management
College of Business and Economics
University of Wisconsin-Whitewater
Whitewater, Wisconsin

2. INTODAY'S tightlabormarket, retentionof existing employees is
now as important
as recruitment of new ones. In addition to
finding better ways to attract people, organi-
zations also face major challenges from em-
ployees who are willing to "jump ship" for
various inducements offered by competitors.
Attracting good people is just one side of the
employment equation; retaining them once
they have been hired is the other.
The so-called traditional model of em-
ployee behavior, in terms of expected loyalty
and commitment in retum for guaranteed
employment, is no longer the norm. Younger
workers now entering the labor market do not
have the same work priorities of those who
joined the labor force in eariier years. They
also have learned that lifetime job security is
no longer guaranteed. This becomes evident
when one looks at the myriad of mergers,
consolidations, and re-engineering activi-
ties, with their resulting staffing cuts, which
have taken place in the past decade. The
health care industry in particular has been
directly involved in these restructurings. In-
50
Health Care Manager. 2000. 19(1), 50-58
©2000 Aspen PubUshers, Inc.
Retaining Good Employees in Tough Times 51

3. creased operational efficiencies are necessi-
tated by continuing changes in government
initiatives, regulations, and reimbursement
policies, along with intense pressures from
constituent groups such as patients, con-
sumer advocates, employers, and insurance
companies. As a result, more restructuring
through the use of improved technologies
and processes can be expected, which in turn
will affect staffmg requirements and increase
pressure for retaining quality employees.
Health care organizations can attain the
status of "employer of choice" by offering
current employees a well-designed package
of tangible and intangible incentives and
motivators, thereby developing a competi-
tive advantage in recruiting and retaining
staff. This article will address ways in which
employers can develop strategies and pro-
grams for improving employee retention.
WHAT DO EMPLOYEES WANT
FROM THEIR JOBS?
In order to become an "employer of
choice," an organization must first determine
what people are most concemed about and
want from their jobs. This information can
then be used to develop programs and prac-
tices that assist in attracting and retaining
good employees.
Employees want compensation and benefits
comparable to what theii" peers in other organi-

4. zations receive. Tliis includes a competitive
wage or salary and a basic benefits package
such as insurance, sick leave, and retirement
plan. Further, employee expectations include
benefit options flexible enough to meet their
personal and professional needs.
Employees want to work in an environ-
ment of trust and respect where they feel they
are making a real contribution to organiza-
tional goals and objectives. Employees de-
sire to be viewed as team members and val-
ued partners in providing quality patient ser-
vices and care. They would like to be given
the necessary professional autonomy, deci-
sion-making authority, and cutting-edge re-
sources to perform theii"jobs properly, effec-
tively, and efficiently. They want to feel free
to challenge the way things are done and
offer recommendations for change. Profes-
sionals and support stciff, regardless of their
functional areas, wish to be treated as, and
work with, other professionals. In short, they
want a positive climate in which to work.
Employees also want opportunities for
professional growth and development.
These can be provided through ongoing
training, education, and mentoring pro-
grams. Furthermore, advancement opportu-
nities must be clearly delineated so that every
employee is knowledgeable about his or her
career patli alternatives and the approximate
timetable associated with each.

5. Additionally, employees want some rec-
ognition from management that family and
personal time is important. From the employ-
ees' perspective, management should dem-
onstrate respect for and support of family
responsibilities tlirough flexible work sched-
ules, job sharing, and similar options. In
organizations that claim to have family-
friendly policies, supervisors and unit man-
agers should make it easy for employees to
use these poUcies. In other words, manage-
ment "walks the talk."
Finally, employees want to have a good
working relationship with their supervisors.
Supervisors acliieve a positive relationship
with their subordinates by being approach-
able, demonstrating respect, providing sup-
port and encouragement, listening to con-
cerns, and showing genuine sensitivity.
52 THE HEALTH CARE MANAGER/SEPTEMBER 2000
Employees are more likely to experience
dissatisfaction with their supervisors and or-
ganizations when these factors are absent.
Organizations that emphasize these interper-
sonal behaviors will have more highly satis-
fied employees.
For the most part, what employees desire
from their jobs is not radically new. Most
managers have known for quite some time
what is important to employees, but they

6. have not responded. However, by addressing
to these needs, health care institutions will be
contributing to the accomplishment of orga-
nizational goals and objectives, especially
higher quality patient care. Costs also will be
lowered in both the short- and long-run due to
decreased turnover rates. Finally, sti-ess lev-
els should become lower as employees are no
longer forced to work excessive hours or
cover higher patient loads.
STRATEGIES FOR RETENTION
One of the most effective ways to mini-
mize the need for recraiting is to develop
strategies for retaining current employees.
Therefore, management's special challenge
today is first to hire people who are a good
"fit" with the organization's culture and then
create a work environment that gives these
employees every reason to stay.
Though it is the responsibility of each
organization to determine and develop its
own effective retention strategies, several
factors can be identified as universally im-
portant and applicable. These include im-
proving organizational climate, hiring right,
socializing new hires, offering competitive
compensation and valued benefits packages,
and being proactive in resolving quality of
work life issues.
Improving Organizational Climates
One of the most critical steps in developing

7. an effective retention sti'ategy is to assess the
organization's overall work climate, culture,
and atmosphere. An effective way to accom-
plish tliis is to answer tlie basic question of
"why would people want to work here." Impor-
tant inputs include employee surveys, exit in-
terviews, and retention rates by position.
Leading organizations strictly adhere to
high standards of patient care and are willing
to adopt new procedures, techniques, and
equipment to enliance quality. As much as
possible, every employee and work team is
included in some aspect of planning and
decision making. Problems are identified,
discussed openly, and resolved. Perfor-
mance is recognized and linked to valued
rewards. Professional growth and develop-
ment are actively fostered. Supervisors and
managers continually support all employees,
and work is performed in an atmosphere of
mutual trust and respect.
Typically, what is needed is not a major
organizational overhaul, but rather the iden-
tification and emphasis of those intangibles
that differentiate "employers of choice" from
those who are not. The former pay particular
attention to elements such as organizational
fairness, shared communication, and organi-
zational values. These contribute to a posi-
tive and proactive work climate.
Organizational Fairness
Wliile it is difficult to accurately measure tlie

8. degt̂ ee of fairness present in an organization,
employees are very sensitive to any action that
violates their perception of fairness. Certain
characteristics are evident where an organiza-
tion clearly is attempting to treat everyone in an
Retaining Good Employees in Tough Times 53
equitable manner. The "acid test" is how poli-
cies and procedures are implemented and ad-
ministered. Rules are enforced impartially.
Performance standards are clear and
nonambiguous, fuid those with higher ratings
are not thought of as "favorites" because of
who they know. Rewai'ds correlate with perfor-
mance. Employee input into proposals that
direcdy affect them is invited.
Perhaps no single factor will create a dis-
gruntled employee more quickly than the
perception of unfairness. Conversely, a sin-
cere effort to manifest fairness in all matters
will help create mutual trust between em-
ployees and the organization.
Shared Communication
Where there is an atmosphere of trust, there
is an opportunity for extensive, meaningful
communication across different occupa-
tional levels. While most organizations make
statements about practicing open employee
communications, many find it truly difficult
to implement the practice completely. When

9. employees believe that their opinions are
really considered in organizational decision
making, the goal of shared communication
has been achieved. Evidence of specific con-
tributory dialogue, which must be implicitly
based on mutual respect, may be found in the
following examples: the formulation and dis-
semination of overall group objectives; the
sharing of agendas; information disclosure;
opportunities for constmctive feedback; and
diversity and dissent of ideas and sugges-
tions. Consequently, bonding between indi-
viduals and the organization is optimized.
Organizational Values
All health care institutions operate within a
framework of guidelines and beliefs that de-
fine organizational standards of perfor-
mance. These guidelines and beliefs consti-
tute the real values of the entity and, when
embraced by employees, are referred to as
shared values,
A fundamental value, underlying any
organization's policies relating to die em-
ployee-patient relationship, is excellence in
patient care. Employees are committed to an
organization that expects core standards of
excellence and high skill from every caie
provider. These standards are embedded in
all policies affecting patients.
Another central value is the beUef that
employees and their intellectual capital (i.e.,

10. collective employee knowledge and skills)
really are the key assets of any health cai'e
organization. As a result, investments are
made in employee development. Employees
are treated as professionals in their respec-
tive disciplines, at all levels. They also ai"e
given support in both work and personal
issues, resulting in a higher degree of work
hfe balance.
Yet another value is cooperation in attain-
ing organizational goals. High commitment
and high performance teamwork is more
highly esteemed than individual contribu-
tions. Similarly, achieving these goals
through cross-functional coordination is as
important as accomplishing in-unit results.
A final dominant value is tlie leadership
and support provided by management.
Excellence of performance is encouraged
when management becomes meaningfully
involved. Taken one step further, manage-
ment's actions clearly model the same high
standaids that all employees are expected to
attain. Management is also receptive to ideas
that would improve health care service. A
commitment is made to provide state-of-the-
54 THE HEALTH CARE MANAGER/SEPTEMBER 2000
art technological resources. Finally, man-
agement must make every feasible effort to
hire, retain, and develop quality staff, for

11. they ti'uly ai-e the organization.
Hiring Right
People usually join an organization with
certain expectations about their job and work
environment, and these determine their
choice of one organization over another.
Unfortunately, many new employees have
unrealistic expectations about the organiza-
tion or new job. When these expectations are
not fulfilled, then the employee experiences
"reality shock" with varying degrees of dis-
satisfaction. As a result, costly turnover is
most likely to occur among newer employees
who are unable to resolve tlie differences
between their expectations and reality. The
organization frequently contributes to this
situation by failing to provide applicants
with a realistic view of the job and work
environment.
During the recmiting process, applicants
should be provided with a realistic job pre-
view (RJP). Such previews provide a bal-
anced picture of the positive and negative
aspects of a given job in that organization.
The rationale of using RJPs is to provide
applicants with the opportunity to decide if
such a job would be a good professional and
personal fit for them.
Designing and conducting RJPs can be
accomplished in various ways. Often, an
organization will collect the views of experi-
enced employees about job and work setting

12. characteristics. These may be incorporated
into booklets or video presentations for ap-
plicants. Another frequently used technique
is to provide an opportunity for applicants to
meet with current employees and discuss
matters of concern or interest about the orga-
nization. Whichever method is chosen, RJPs
can be effective in preventing turnover.
Socializing New Hires
Though RJPs may be used during the hir-
ing process, new employees may continue to
hold unrealistic expectations about the job
and the actual work environment. Thi s can be
expected, as words and testimonials cannot
always fully describe what it's like to actu-
ally perfoiTn a job in a particulai" work set-
ting. In an attempt to bridge these potential
gaps, many organizations provide orienta-
tion sessions for new employees. Such pro-
grams provide important, formal informa-
tion regarding work-related policies and
procedures, benefits packages, and enroll-
ment procedures. However, in addition to
formal orientation, new employees need to
learn about the norms, roles, and personality
styles that are characteristic of a particular
environment and have an understanding of
"how things are done around here."
Department or unit supervisors have the re-
sponsibility for developing an effective social-
ization program for new employees. Major
goals should include assisting in learning the

13. tasks of the job, providing an understanding of
tlieir role in the department and/or unit, helping
in becoming an accepted and productive
New employees need to learn about
the norms, roles, and personality
styles that are characteristic of a
particular environment and have an
understanding of "how things are
done around here."
Retaining Good Employees in Tough Times 55
member of the work group, and providing
timely feedback on perfonnance.
Often a senior member of the work group
will be assigned the responsibility of guiding
the new employee through the socialization
process. In its most basic form, this is known
as mentoring and transfers knowledge from
those professionals with greater learning and
experience to those employees who have
recently joined the organization. Mentors aie
important to career success because they
perform developmental functions including
sponsorship, coaching, and protection.
Sponsoring involves actively helping the
employee to get needed job experiences and
to obtain desirable visibility with key indi-
viduals in the organization. Coaching in-
volves offering advice and practical tips on
how to accomplish job objectives and
achieve recognition. Protection is provided

14. by alerting employees to potentially harmful
situations or experiences in the workplace
that could prove damaging to career progres-
sion. Mentors often provide valuable assis-
tance, .such as role modeling, in which the
employee is provided with a pattern of values
and behaviors to emulate, and which is im-
portant to becoming a valued and productive
organizational member. Though effective
mentoring programs require time and com-
mitment on the part of participants, such
programs aî e beneficial to all parties.
Unlike most new employee orientation
programs, effective sociahzation is viewed
as a long-term process with no established
time limits, and is designed with each new
employee's requirements in mind. Those
whose socialization needs have been ad-
dressed can be expected to become produc-
tive and committed members of their respec-
tive department or unit.
Offering Competitive Compensation and
Valued Benefits
The compensation and benefits package is
a major factor in designing strategies to re-
tain employees. Continual assessments of an
organization's position relative to the mar-
ketplace must be made. For difficult-to-fill
positions, where cun-ent market salaries may
be substantially higher than salaries paid to
job incumbents, the resulting compression
issue must somehow be addressed. Where
salary adjustments cannot be made to effec-

15. tively deal with compression, some organi-
zations give annual loyalty bonuses to valued
long-temi employees. These bonuses are
designed to show management's apprecia-
tion to those who remain with the organiza-
tion. Another variation of using compensa-
tion as pait of one's retention strategy is to
offer stock options to various groups of em-
ployees, particularly within the professional
ranks. Though this incentive is limited to
organizations that issue stock, options ai"e
often used by startups in the health sciences
industry as a means of attracting and retain-
ing quality personnel.
A well-designed benefits program is also a
major ingredient in an organization's retention
strategy. Benefits are a significant portion of
total labor costs, and must include tliose fea-
tures most valued by employees. This theme of
providing valued benefits can be most effec-
tively implemented by developing a cafeteria
or flexible benefits plan. Employees do not
automatically receive all offered benefits,
but select those that fit their current life-cycle
needs. The intent is to provide employees
with a given number of doll ai's or points with
which to purchase desired benefits. Many of
the benefits employees want at certain stages
56 THE HEALTH CARE MANAGER/SEPTEMBER 2000
in their lives are obvious. However, ques-
tionnaires and personal interviews can be

16. used to determine varying needs and to de-
sign plan offerings accordingly.
Enhancing Quality of Work Life
Offering employees a competitive and val-
ued compensation and benefits package will
not by itself be sufficient to retain them in the
long run. Employees in today's labor market
increasingly expect that the work climate
will be attractive and accommodate both
professional and personal needs. To accom-
plish this, health care organizations inter-
ested in retaining their employees should
develop an attractive quality of work life
environment. This is accomplished through
the design and implementation of quality of
work life (QWL) programs. Those found in
the health care field usually focus on job
redesign, work time and/or place issues, and
professional development and growth
opportunities.
Job Redesign
In today' s competitive health care environ-
ment, organizations constantly seek organi-
zational efficiencies through job redesign.
Those who are successful will undertake new
initiatives that are responsive to both organi-
zational and employee needs. People expect
to work in an environment where their jobs
are interesting, challenging, and contribute
to quality patient care.
An innovative approach introduced at sev-

17. eral community-based hospitals is called
employee-centered work redesign. The ob-
jective is to encourage employees to assist in
redefining their work roles, to tlie extent tliat
such changes benefit both the organization
and the employees. This program is not in-
tended to replace more traditional work rede-
sign methods such as job rotation but rather
is considered an employee-initiated en-
hancement. In making proposals for work
redesign, employees must be able to justify
how such changes will improve quality of
service, support organizational and depart-
ment goals, and contribute to employees'
professional growth. The process provides
employees with the opportunity to become
actively involved in improving their quality
of work life. In turn, this has led to higher
levels of commitment and improved reten-
tion rates among the organization's most
valued employees.
Another effective approach in improving
quality of work life through job redesign is the
increased use of teams. This involves changing
from a work group structure found in a more
traditional unit or department, to self-managed
or self-directed teams. These operate with a
high level of autonomy and, to the greatest
extent possible, have a high level of cross-
training. Everyone is expected to accept and
exercise tlie responsibility necessary to do both
their own jobs and assist others. The result is
often an intense focus on a shai'ed sense of
purpose, tliat of serving the patient.

18. Alternative Work Arrangements
Organizations increasingly attempt to im-
prove employee quality of work life through
the use of alternative work arrangements.
Such flexibility has become a significant
factor in both employee recruitment and re-
tention. This is particulaiiy true when dual-
cai"eer couples and single parents factor child
care considerations into their employment
decisions. Some options which employers
may wish to consider are as follows.
Flexible scheduling
The more traditional approaches to imple-
menting alternative work scheduling in
health care include flextime, compressed
Retaining Good Employees in Tough Times 57
workweek (40/10, 36/10, 30/10—Friday.
Saturday. Sunday), or per diem an-ange-
ments. In instances where severe labor short-
ages exist, healtli care organizations are even
resorting to employee-designed schedules.
This might be expressed in temis such as:
"We'll schedule you to work when you are
available." Though frequently impractical
from a total organizational perspective, us-
ing and maximizing scheduling fiexibility as
a recruitment and retention technique for
difficult-to-fill positions may be a necessity.

19. Job sharing
Job sharing permits two individuals to hold
one full time job. Each may work half-time or
some other uneven art^angeinent, as long as
the job is covered 40 hours a week. This
adaptation allows the organization to retain
the services of two good employees instead
of needing to hire one full time replacement.
When employees give notice of their intent
to quit, supervisors and human resource
managers need to become creative in at-
tempts to retain them. First ascertain why
they wish to quit; if the reason involves a
desire to work fewer hours, explore job shar-
ing possibilities.
Pc^tponing full-time retirement
Frequently, people who are planning to
retire are employees whom the organization
might wish to retain, even on a reduced time
basis. When individuals give notice of their
intent to retire, supervisors and human re-
source managers should determine if they
would be willing to work part-time.
In some organizations, retirements can be
phased in incrementally. This type of ar-
rangement benefits both parties. The organi-
zation still has the services of a trained,
knowledgeable employee. The employee
transitions into retirement and prepares for it

20. gradually. For example, a person might
change to half- time status and delay official
retirement. Or an individual who wishes to
retire and begin collecting retirement ben-
efits might desire to earn additional income.
Other options also exist for retaining the
services of such people. Job sharing, fiex
time, and telecommuting aiTangements are
examples. Another is a special project as-
signment whereby the retiree works so many
weeks or months a year, earning up to the
amount allowed by Social Security. This
might be particularly attractive to an organi-
zation as routine job duties are usually ac-
corded preference over special projects.
Telecommuting
An often overlooked alternative work ar-
rangement is telecommuting. With modern
communications and processing technolo-
gies readily available and requiring only
moderate set-up costs, any job that involves
analysis, writing, records documentation,
data entry, or programming should be
viewed as a potential candidate for off-site
work. Some examples include medical
records technicians, coding specialists, and
data entry clerks who are employed in hospi-
tals, clinics, health maintenance organiza-
tions, insurance companies, and physician
practices.
Professional Growth and Development

21. Health care professionals tend to refer to
themselves in temis of their mediciil specialty,
such as medical technology, physical tlierapy,
or acute care nursing. They tend to locus on
their skills and competencies because that is
what they offer in the marketplace. Having
invested extensive time and resources in pre-
paring for professional qualification in their
field, they are fully awai-e of the need for
continual career development to remain up-to-
58 THE HEALTH CARE MANAGER/SEPTEMBER 2000
date. Organizations tliat support on-going edu-
cation and learning, and are willing to provide
career enliancement programs usually find, as
a retum on their investment, heightened com-
mitment to tlie organization from their profes-
sional employees.
These career development programs should
be designed to fit both professional and per-
sonal needs of employees, focusing on career
mobility within the organization. Where pos-
sible, more formal career channels should be
developed, along with the required supportive
resoui ces to make tliem work. For example, for
difficult-to-fiU specialty registered nurse (RN)
positions, such as in acute caie or pediatric
oncology, hospitals now offer fellowship pro-
grams to young, nonspecialty RN employees.
These programs offer comprehensive, fully
paid training within tlie host facility, using
mentors, career counselors, and other support

22. services.
Because health caî e professionals are in-
herently committed to their profession and to
the patients for whom they were trained to
care, they respond favorably to a work envi-
ronment offering the latest high-quality tech-
nology, equipment, and facilities. Organiza-
tions that wish to maintain their staff will
supply the resources required to provide ex-
cellent patient care.
CONCLUSION
In today's tight labor market, health care
organizations must be actively committed to
retaining valued employees. A competent,
qualified employee who is not satisfied with
a cuirent employer will have few problems
finding another.
"Employers of choice" have strategies and
specific programs in place to strengthen reten-
tion outcomes. They especially provide a work
environment that offers employees the oppor-
tunity to feel pride as organization members.
This is accomplished by using the latest tech-
nology and state-of-the-art equipment; de-
manding high-quality standards of patient cai'e;
rewarding outstanding performance; building
positive work relationships; and honoring em-
ployees' needs for quality work life.
At all organizational levels, an awareness
must be demonstrated that human capital is

23. truly the most valuable of assets in the health
care equation. It must be carefully selected,
nurtured, developed, accommodated, and,
especially, retained.