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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
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” (?)
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—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?
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
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• 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