Over the last weeks it has been interesting for me to see a number of discussions pop up on blog sites and social and business networking relationship sites that I belong to about the correlation between employee retention and employee satisfaction. The dialogue includes questions like:

  • Is there a direct or indirect correlation between employee retention and employee satisfaction?
  • Which is the more important measurement to employers; employee satisfaction or employee retention?
  • What is employee engagement and should I be measuring it?

I will respond to those questions the same way I responded to them on the sites- assuming that there is a direct or indirect correlation between retention as measured by average tenure and satisfaction is potentially dangerous and misleading.

Employee retention at its most basic is a function of turnover. How many people join and how many people leave your organization over a given period of time. If you want to be more sophisticated you might measure “regretted turnover”, those you wanted to keep; versus “unregretted” turnover, those you didn’t mind seeing leave. I would concur that those can be very different.

Where I get lost is drawing an absolute correlation between an individual’s length of employment and their perceived “satisfaction”. Employees stay in organizations for a lot of reasons, satisfaction may even be one of them. Unfortunately, there may be other reasons as well- 

  • They lack the motivation to look for a “better” job. 
  • They are in a situation where they are tied to the position/geography for family or other reasons.
  • They are “invested” in staying long enough to qualify for a retirement plan, stock options, or other “retention” devices.

I have found over my experience as a manager and consultant for the last 30 years that there is something worse employees can do then leave when they are unhappy- they can stay! They can stay and take up room. They can stay and “poison the well” for others. They can stay and impede the ability to promote other more capable staff.

Another “measurement” that I ponder is “experience”.  Even in my own case do I really have thirty years of experience, or do I have one year of experience repeated thirty times?
I don’t want to be misunderstood in that employees who have a long term relationship with their employer or who have been performing their responsibilities for a significant period of time are drones- I am just saying let’s examine a different measurement.

I would challenge you to measure engagement. In my context engagement is the employee who comes to work in your organization with a clear sense of their personal contribution to the goals of the company and the connection to their own goals. They share a vision with you. They have moved from what my partner and I call compliance to Commitment™.

Commitment isn’t measured in years or tenure; it is measured in productivity and enthusiasm. We have all seen organizations like Google, Starbucks, Apple, and the “old” Nordstrom’s. These companies almost resemble a cult. They believe in the mission and they come to work every day prepared to do their part.

We experienced a recessionary economy now for over four years. Although the stock market is back up unemployment and other key indicators aren’t still aren’t showing the kind of progress that we would like and expect to see. 

I hear employers lament that they can’t find the talent they need even though unemployment remains high. Could it be that they are using the wrong process and looking for the wrong things?

Research demonstrates that top talent will leave organizations where they feel the employer isn’t invested in them and they are not receiving mentoring, coaching, and an opportunity to learn new skills. This isn’t new, but for the last few years employers have hidden behind the old posture that employees should be grateful to have a job.

I have argued that many of our issues around health care and the entitlement mentality that we are experiencing were created by us. When large employers wanted to introduce the concepts of mass production and simplify many skill sets in order to reduce costs they offered health benefits, retirement and other inducements in return for compliance. Then as the costs of the programs got higher the solution was to outsource and offshore. My point is we deliberately created the codependence.

When we created the concept of human capital we created a whole new industry of consulting to package and track intellectual capital and talent the same way we do financial capital and materials. Consulting firms make billions annually installing templates and best practices. The problem is that most of these models do not take into account the human dimension. People aren’t capital. They can have a nasty way of withholding their capability if they don’t feel well managed or well treated. Yet we still call the business of managing relationships a soft skill.

I would also like to be clear here that engagement is not the sole responsibility of management. Individual employees play a significant role in creating engagement in their own work by being realistic about their expectations from their job, providing meaningful feedback to their coworkers and supervisor and bringing their whole selves to the job.

Employees should get in the habit of asking themselves some tough questions-

1. What did I do today to improve communication with my manager and peers?
2. What actions did I take today to learn and grow?
3. Whom did I thank today, and who recognized me?
4. Was I mindful today of our company’s long-term goals?
5. Today, how engaged was I at work?

I read a great article recently that discussed some of the fatal flaws in our obsession with management. In many cases we track something not because it is meaningful or helpful, but because we can measure it! We can get so caught up in the numbers, we don’t look at outcomes.

So in parting I would leave you with this thought- By all means continue to measure and track, because as they say what gets measured gets done! I would just caution you- be sure that you are measuring the right things and interpreting the results correctly. You get the behavior you reward, if you manage and reward for excellence you will achieve it. If you measure and reward tenure, you will get that. They aren’t the same.


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