Employee Loyalty: When More Money Isn't Enough

No. 1: You cannot buy loyalty, so forget matching competing offers when employees tell you that they have a better offer from a competitor. Once an employee has decided to leave, the emotional bond is broken. Your first step is to begin the diagnosis. Are you conducting exit interviews? If not, consider hiring an outside service--professionals, not telemarketers--to ask questions that will yield honest, candid answers about why people are leaving. A post-employment interview could yield considerable and valuable information about your workforce.

Step two involves conducting a climate survey of remaining employees. Again, it's better to hire professionals from outside the organization. Don't try to do this in-house, as employees may not feel the level of trust required to give you meaningful feedback. Although you may be in a highly competitive market, you need to understand how employees perceive the experience of working for your company. Is it something they value?

This knowledge should provide a clearer picture of how your work environment is creating conditions that prompt--perhaps even encourage--people to leave for other jobs. Your job: Develop strategies that strengthen your defenses and make deliberate improvements to become a less toxic, more attractive employer.

Bonus hint: Employee retention is a management responsibility, not a human resources responsibility. Do your managers understand their retention role? Are they trained and equipped to perform it? Do they understand their own management style and its impact upon employees? You'll need to get at the root of these questions too.

One way to insure your workforce is the one you want and need is to assess your applicants prior to hiring them. Spectrum is a med-sized convenience store owner located in West Point, Georgia. Their story could be your story.

Spectrum's managers believe that if they hire the best people and take care of them, the business will be successful. Customers are very loyal to the people who work in the stores, says Bob Holcomb, vice president of human resources. "We know we're not the only people who sell Snickers and Budweiser. The thing that makes us different is our people."

To make sure they get and keep the right people, Spectrum offers employees benefits not typical in most convenience stores, including access to health benefits for full- and part-time workers, opportunities for bonuses, and salaries above the minimum wage. But Spectrum also has a rigorous hiring process that includes criminal-background checks, drug screening, and a pre-employment assessment instrument. The assessment evaluates candidates for honesty and for their communication, teamwork, reliability and other job related skills.

Prospective employees complete the assessment when they fill out a job application. Before conducting any interviews, managers are able to get immediate results from the test provider to determine whether applicants meet the defined criteria, Holcomb says.

Since the assessment was implemented, turnover rates have come down considerably--they are at 85 percent this year, whereas the industry average is close to 200 percent. But reduction in turnover is not the only reason Holcomb uses the tool. "It helps us hire better people who will be honest and reliable," he says. It also reduces many of the personnel problems that affect operating costs and quality of service. For example, absenteeism and tardiness rates across the company are low, and--internal shrinkage--theft by employees--is less than 1 percent. That's less than half of the industry standard of 2.23 percent, according to the 2001 National Retail Security Survey, conducted by the University of Florida. For a company that does $300 million in annual sales, that amounts to a savings of more than a million dollars.

The assessment also contributes to the steady increase in sales and builds loyalty among customers. "Success comes down to your people," Holcomb says. "When you have a better person in the box, you win."

Ways to achieve motivation and loyalty

Presented below are some ways to improve employee motivation and loyalty:

• Training - Training does two things to help the employee achieve motivation. They feel the company considers them valuable and trustworthy since they are investing in them. They do not feel technologically stagnant and believe their career is progressing.
• Career planning - Working with the employee to help determine how they want to plan their career and helping it happen so long as the employee goals can fit company goals. If the employee is forced to go a career direction they do not want to go, they will not be happy and will leave sooner or later.
• Produce a product the employee is proud of (quality).
• Be aware of the fact that the employee is human. They have lives outside the company. If their lives outside the company are stressed, their performance will decrease. Work with the employee and don't expect an amount of overtime that is disruptive in the long run to employee's lives. Remember the employee normally works there for the primary benefit of the family.
• Show trust in employees. Visual supervision for many employees should be unnecessary. Of course this depends on the individual and the situation, but with experience and by seeing the product produced, management will learn whom to trust.
• Give authority with responsibility.
• Be pre-occupied with being the best.
• Provide for basic needs and provide required individual intrinsic satisfactions (motivation).

MuRF Systems, Inc. provides all the tools described above. Should you have an interest any of the areas discussed here, contact us today.