7650 Employee Satisfaction Retention 1

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Employee Retention

BUSINESS

Many factors con tribute to this

cost (eg, contract labor, PRN, and

overtime). These factors inevitably

occur while a position is unfilled.

H*Works determined that 79 |)ercent

of the cost of nursing turnover is pro-

ductivity-related. ' Ejnployees who a re

planning to leave become less pro-

ductive, and new employees require

time to reach optimum pi-oductivity.

The productivity of other employees

may decline as they spend time train-

ing and sei-ving asaresource for the

new team n:iember. Part-time replace-

ment personnel typically are notas

productive as full-time, tenured

emp loyees. In som e cases, quality of

work could be affected during the

transition.

Retention costs also include

search-firm fees, training, severance,

sign-on b onuses, recruitment and

intei view time, and legal costs .

Thefinancialmpact of turnover

on revenues should be evaluated. For

example, if physicians routinely see

the same staff members and have

confidence in their ability, physicians

likely will con tinue to send patients

to the institution. High turnover,on

the other hand, may lead physicians

to direct patients to competing insti-

tutions.

The financial impact cjf turnover

onmarkel share also should be calcu-

lated. For example, if healthcare

organization has annual revenues of

300 million and a 30 percent market

share, each m arket-share pointis

worth SIO million. If employee

turnover could cause physiciansto

send patients to com peting hospitals,

the business plan must reflectthe

financial consequences.

After turnover costs have been

determined, tbe financial benefits of

reducing these costs become appar-

ent. Furthermo re, reducing high

Niiisc Rt- criiilJiwnlandRelenlton Fngagemeiit

employee turnov er can improve

patient care. Long-term employees

gain ct)nsiderable exp erience in

patient care. The longer employees

remain with an organization,the

greater the potential benefitto

patients.

Because employees

want their personal

and practical needs to

be met employers

need to offer tbe

compensation

benefits and

scheduling that

employees desire.

Next, the cost of implementing

a retention strateg\- must be deter-

mined. These costs include items

such as compensation, management

development, and marketing

cojnmunications.

Compensation Competitive

compensation packages are impera-

tive.

Employers must know how the

compensation they offer for critical

positions comp ares with compensa-

tion for similar positions at other

organizationsinthe sei-ved market. t

a healthcare organization is perceived

t(] be a great place to work in term s

t)f such factors as training, resources,

technology, work environment,

staffing, and scheduling, the organiza-

tion may be able to pay less than its

competitors do (within an acceptable

range).

If competitors are viewed more

2 Questions

t

Measure

Employee Satisfaction

1 . Do

I

know what is expected

of

me

at

work?

2. Do

I

have the materials and

equipment

I

need

to do

my work

right?

3. twork,do Ihave th e oppor-

tunity

to

do what I

do

best every

day?

4 . In the last seven days, have

I

received recognitionorpraisefor

doing good work?

5. Doesmy supervisor,

or

someone

at

work, seem

to

care

about me as aperson?

6. Is there someone atwork who

encourages my development?

7.

t

work,

do

my opinions seem

to count?

8. Does the mission/purpose

of

mycompany make me feel my jo b

isimportant?

9. Are my coworkers comm itted

to doingquality work?

10.

Do

I

have a best friend

at

work?

1 1 .In

the last six months,

has

someone

at

work talked

tome

about myprogress?

12. This last year, have

Ihad

opportunities

at

work

to

learn and

grow?

Source: Buckingham,Marcus, and Coffman,

Curt , First,

reak

ll iheRules: What the

WorW sGreatestManagers Do Differently.

New York, New York:SimonS Schuster,

1999,p. 28.


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Employee Retention

otherhand, the organization wiU

need to use comp ensation as its

leverage. However, any retention

strategy based solely on compensa-

tion will not succeed in the long run.

A

successful .strategy combines mar-

ket-rate compensation and a work

environment that is competitively

distinctive.

Managevtent development

Exit interviews have shown that m any

employees harbor negative feelings

about their managers' abilities. Con-

seciuently, management development

is essential to an effective reten tion

strategy. Management training no t

only should focus on skills such as

coaching, delegating, and communi-

cating, but also should prepare man-

agers to meet and b e accountable for

specified standards of performance.

Training costs can be determined by

capturing the c(jst of curriculum and

materials, printing, instructors, facili-

ties,

time away from job (and possible

back-up requirements), and travel.

Marketing communications

Organizations must make their

employees feel valued to earn their

loyalty to the organization. O ne effec-

tive too for this purpo se is marketing

communications, which can be used

to inform employees cjf the organiza-

tion's vision, direction, and guiding

principles. Effective organizations use

marketing com munications to tell

Employees want to

feel that their

contributions are

important and want

employers to

demonstrate their

commitment to stated

corporate values

employees whether the organization

is

meeting its goals and, ifnot what

needs to be don e to get back on track.

Marketing communications costs

involve such factors as creation time;

execution elements, such as web site,

print, direct mail, posters, and focus

groups; and recognition efforts.

EXHIBIT : RELATIONSHIP BERWEEN JOB SATISFACTION AND An R IT IO N

Employee

Satisfaction Factors

Useofmy skills and abilities

Ability of top management

Com pany has a clear sense

of direction

Advancement opportunities

Opportunity to leam new skills

Coaching and counseling from

one s o wn supervisor

Pay

Training

Employees Planning

to

Stay

for

More than

Two Years

( )

83

74

57

5

66

54

51

54

Employees Planning

to Leave

in

Less than

Two Years

( )

49

41

27

22

38

26

25

36

Soorre : The Hay Grou p, Th e RefenEran CWemmo: Wliy fVoductive

orlisr^

leaveSeven Suffiesuons (or Ksejiing Them Philadeifihis

Once turnover and remedy cos

have been validated, return on inve

ment can be computed for varying

levels of turnover. Conservative sho

and long-term goals can be estab-

lished to measure the effectiveness

the strategy.

Value Proposition

A

value proposition puts forward

the organization's strengths.Itiden

fies tbe needs that the organi;;ation

can satisfy and how the organizatio

differs from its competition. To

help pinpoint its unique competitiv

characteristics, t he organization

can con duct employee focus group

and/or review exit-interview data

to determine employees' initial

perceived attractionto the organiza

tion and w hether this perception

proved true.

Exhibit shows results of one

study that dem onstrates the relatio

ship between specific satisfaction fa

tors and retention. If needs such as

those shown in Exhibit are met,

employees will want to stay with th

current employer;

ifthe

n eeds are

not met, employees

will

look else-

where.

reduce turnover managers

must show a genuine interest in the

employees' developm ent and suc-

cess.Employees want to feel that

their contributions are im portant an

want employers to demonstrate the

commitment to stated corporate va

ues.In addition to their technical

skills,employees want to be apprec

ated for their work e thic, working

well with customers and coworkers

and performing high-quality work.

Development programs prepar

employees to perform their jobs sa

factorily and b e accountable for the

job performance, Employees needt

be rewarded for their achievements

and provided an opportunity for


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Employee Retention

The Hay Group reported that

more than half of the employees

sui'veyed said they believe their

companies routinely tolerate po or

performance.^'

The best employees would I'ather

assume more responsibility than

work with those who care little about

the company, customers, and o thers.

The best employees want to win, and

winners want to work with winners.

HG\ determined through exit

interviews that people joined the

company because they sought good

career opportunities. Ironically, one

ofthe top reasons they left was for

better career opportun ity along

with manager/supervisor issues,

An effective retention strategy

rests on a combination of factors.

Employees want their personal and

practical needs to be met: personal

needs such as compensation, benefits,

and scheduling; practical needs such

as development, resources, tools, and

technology. They also want to feel val-

ued by the organization. Therefore,

these imperatives become the founda-

tion of the value proposition, as evi-

denced by the organization's vision,

mission, values, and strategies.

Progress Measures and

Management Influences

Progress toward meeting retention

goals should be measured regularly

One tool for such m easurement is

the Gallup Organization's 12 ques-

tions to measure employee satisfac-

tion (see sidebar, page 41). After sur-

veying h undred s of thousands of

employees across numerous indus-

tries, Gallup has been able to accu-

rately correlate responses to the

questions anti the predictability of

employee retention, productivity, and

profitability^^ Organizations and man-

agers that receive high scores on

b. The Hay Group,

The Reieniioii D ilemma: Wlyy

I'rociuctive Workers Leave Seven Sufêstionsfor

Keeping Them, Philadelphia, Pennsylrania, The Hay

Gniup, 2001 (www.haygroup.com/onlinej ibrary /

c.

Bill,

kiiigh^m, Mait'us. ;md Coffman, Curt,

Firsi.

Hreak Ail Ihe Rules: What Ihe Worlil's GreatesI

ciiiciî rxDo Differc'iilly,New Vljrk, New York:

Simon

Sduisier, 1999. p. 28.

these questions predictably perform

very well, while low scores confirm

p(K5r perform ers.

Other indicators of emp loyee

retention also should be tracked and

reviewed. Indicators of the long-term

success of healthcare organization's

retention strategy include:

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Employee Retent ion

BUSINESS

Low absenteei.sm and tardiness;

Employee investment in the com-

pany retirement plan;

Employee volunteerism for commu-

nity service or special tio-pay pro-

jects suppo rtec by the employe r;

Recruitment of friends to work for

the employer;

Management's ability to forecast

turnover; and

Management 's commitment to the

retention strategy.

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should clearly c


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7650 Employee Satisfaction Retention 1

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