Leadership Tools to Retain Employees

A friend told me that she was very disappointed that her employer was giving her less than a 1% raise this year, despite the fact that she is the best worker on the team (as determined her manager’s objective measures). Her manager apologized, but said that she had been hired near the high end of the pay scale and there was little room for salary growth. No wonder my friend’s unit (in this Fortune 500 Company) has a 25% turnover. They don’t seem to have a process in place to keep good people. Do you?

Outlined below are three tools to help you keep your good employees. Of course, you may not be able to implement all three. But the real question is, how will you adapt at least one?

Leadership Tool #1 – Increase pay growth, not salaries

What my friend’s company doesn’t understand is that employees say that salary matters, but when it comes to retention, science says salary growth matters more. In other words, it’s not the absolute salary that motivates people to stay; it’s the pay growth over time. Therefore, instead of putting those dollars in base salaries, put them into broader ranges whenever possible.

Leadership Tool #2 – Improve career progress and mobility

During my last performance review at Siemens, I asked my manager what I should be doing to prepare me for a management position. (At the time, I was the top salesperson and had been a real good performer for 5 years). He informed me that it would take a long time to move into the management track. (A year later, I was gone… and Chief Administrative Officer of an Institute at UCLA). A promotion within the previous year decreases the probability of turnover by about 50%. Even if you can’t promote your good employees, helping them learn new skills and/or change jobs will increase retention.

Leadership Tool #3 – Evolve incentives

During the award ceremony at a management retreat a few years ago, awards were given to the top three performers in several categories. After the meeting, I asked the leader why he penalized his people for sharing their best practices. He looked at me with the “deer-caught-in-the-headlight-look.” I explained that he actually was telling his mangers that if they wanted to receive the awards next year, they had to beat the competition… who happened to be their colleagues? That promotes “silo” behaviors, NOT team – work. I recommended that he reward cooperation by setting targets (with team involvement), then give awards to all those who hit the targets. Increase the rewards as more people achieve the goal. He invited me to speak again the year… He had a much better award ceremony. He is an evolved leader. So are you!

Next time you give a raise or reward a performance, keep these three tools in mind. They are just a few of the many ways you can motivate and retain your good employees. How could you adapt them to fit your work? What are you doing that works? E-mail me if you want to discuss a plan to decrease turnover.

            Keep on eXpanding your leadership,

            Dave

P.S. Dave Jensen and his team transform proven leadership tools into your success stories. Dave is an executive coach and an engaging leadership speaker at conferences, meetings, and workshops. He can be reached in Los Angeles, CA at (310) 397-6686. Click here for more info about the research-based, online 360-leadership assessment (XLM): http://xlmassessment.com/ )

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