INCREASING JOB RETENTION THROUGH EMPOWERMENT & COMMUNICATIONEMILY ABSALOM 3 DECEMBER 2016MBA 592DR. JENNIFER EDMONDS

OUTLINE

Reason for Study—Current Statistics Empowerment Communication Case Studies

Wegmans Patagonia Google

Analysis Conclusion

CURRENT STATISTICS

In 2015, people aged 18-34 became largest workforce in the United States Over 3 million Americans quit their job in December 2015, the highest number since 2006 Millennial turnover costs the United States economy $30.5B annually Cost of replacing . . .

Entry-level employee: 30-50% of annual salary Mid-level employee: 150% of annual salary High-level/highly specialized employee: 400% of annual salary

40% of companies citing loss of personnel as top concern Main factor in workplace discontentment is not wages, benefits, or hours—it’s the boss

28% of employees would rather have a better boss than a $5,000 raise

JOB RETENTION AS MEASURE OF SUCCESS

WHY DOES JOB RETENTION MATTER? It’s costly It affects business performance Can become increasingly difficult to manage

Customer retention rates are 18% higher when employees are highly engaged

IS LOW JOB RETENTION BAD? Not always . . .

Some turnover is involuntary (e.g. back to school, following a spouse who has been transferred, came into money)

Jack Welch’s “Rank and Yank” – Eliminating bottom 10% of company

Dependent upon industry Hospitality Banking & Finance Healthcare Insurance

EMPOWERMENT

Definition: to give power to; to enable; to promote the self-actualization of Originally used as a tool for helping minorities Adopted by academics in 1989 as management tool A motivational construct used to increase feelings of self-efficacy

Self-efficacy: An individual’s belief in his or her capability to execute behaviors necessary to produce specific performance attainments

“Empowerment is not a question of enlightening or infusing employees with some empowering formula, but is rather a question of breaking down the barriers that stop employees from taking charge” -- The International Journal of Human Resource Management

HINDRANCES TO EMPOWERMENT: LACK OF TRAINING

People get involved in activities and behave assuredly when they judge themselves capable of handling situations that would otherwise be intimidating

Importance of providing employees with tools & training High emotional arousal (anxiety) can lead to defensive behaviors & avoidance tactics

Not engaged! How to Remedy:

Clearly define employees’ roles ; let employees know they’re trusted

Reduce information overload Offer technical assistance to accomplish job tasks

HINDRANCES TO EMPOWERMENT: BUREAUCRATIC ENVIRONMENTS

When control systems become increasingly formal and impersonal in an organization, employees’ sense of autonomy and responsibility are diminished

33% of employees at organizations with 100+ employees are currently looking for a job at another organization

“I believe that for the best communication and to avoid bureaucracy, you should ideally have no more than a hundred people working in one location” – Yvon Chouinard, Patagonia founder

COMMUNICATION

Defined as: a process by which information is exchanged between individuals through a common system of symbols, signs, or behaviors

Types of communication: Verbal: Content, structure, sequencing Nonverbal: Paralinguistic cues, gestures, facial expressions, body movements, pheromones

COMMUNICATION: MINDFULNESS

MindFULness: An active state of mind in which the person communicating deliberately phrases syntax to elicit a certain response or to send a specific message

MindLESSness: A passive, often automated or thoughtless method, of sending a message Assumptions Repetition (despite receiver’s clear lack of understanding)

COMMUNICATION: MILLENNIALS + TECHNOLOGY Unconscious mind can process 11 million bits of information per second

As much as 10 million of those bps can be connected to processing visual/multimodal sensory information

Conscious minds can only handle ~40bps Meetings, conferences, & events provide stimulation, re-engagement, and emotional

interest The water cooler effect“In this information age it’s tempting for managers to manage from their desks, staring at their computer screens and sending out instructions, instead of managing by walking about and talking to people” – Yvon Chouinard

CASE STUDY: WEGMANS

Regional supermarket chain Headquartered in Rochester, NY

88 stores 46 in NY 17 in PA 7 in NJ 7 in VA 4 in MA

Over 45,000 employees $7.9B in annual sales in 2015

WHY WEGMANS?

WEGMANS’ EMPLOYEE FIRST MODEL

Jobs characterized by low complexity, repetition, or minimal training, relatively low wages and high rates of turnover

In an industry where extensive training and education is viewed as nonessential, Wegmans views training an intrinsic part of its success as a corporation

“Our employees come first, and we mean it” – Bob Wegman, former CEO & Chairman Deliberate approach to incredible customer service

WEGMANS—JOB RETENTIONWegmans enjoys an amazingly low employee turnover rate of 8 percent in an industry that averages

50 percent

The smiles you receive from Wegmans employees are not the vacuous, rehearsed grins you get at big-box retailers. They are educated smiles, with vast stores of knowledge behind them, cultivated

perhaps through company-sponsored trips to Napa Valley's Trinchero winery. After all, what good is it to offer 500 types of specialty cheeses if you can't explain the origin of each, what type of cracker to serve them on, even what wines they should be paired with? ‘If we don't show our customers what to do with our products, they won't buy them," says Danny Wegman. ‘It's our knowledge that can help

the customer. So the first pump we have to prime is our own people’

CASE STUDY: PATAGONIA

Privately-held outdoor clothing company Headquartered in Ventura, California Founded by Yvon Chouinard

2,000 employees 71% women

$540M in annual revenue Patagonia’s turnover is 7%, when other

apparel retailers commonly see turnover of over 100% annually

One employee quit in June 2016

PATAGONIA’S HIRING PRACTICES

Receives 900 applications for each job opening Hires from within to keep company culture strong Offers comprehensive health insurance, even for part-time employees, to attract the most

serious athletes to the retail stores “We seek out ‘dirtbags’ who feel more at home in a base camp or on the river than they do

in the office. All the better if they have excellent qualifications for whatever job we hire them for, but we’ll often take the risk in an itinerant rock climber that we wouldn’t on a run-of-the-mill MBA. Finding a dyed-in-the-wool businessperson to take up climbing or river running is a lot more difficult than teaching a person with a ready passion for the outdoors how to do a job” – Yvon Chouinard

GREAT PACIFIC CHILD DEVELOPMENT CENTER, INC.

Houses over 100 children, 8 weeks through 9 years old

Run by teachers Bilingual Trained in child development

Field trips to beach, horse rescue, library Can play in “kitchen” and in backyard

“When kids are in the same place and have the ability to trust the adults around them to love them and care for them, they have the energy to do what they need to do in all areas of development. They become more articulate and tend to have higher self-esteem” – Anita Furlow

CASE STUDY: GOOGLE

Publicly traded American multinational technology company Headquartered in Mountain View, California

62,000 employees $74.5B in revenue

GOOGLE’S PERKS

Free gourmet cafeterias Massage rooms Nap pods Haircuts On-site doctors Billiards, rock climbing wall, company pool Free laundry; dry cleaning available

GOOGLE’S LOW RETENTION

Employee remains at Google a median 1.1 years

Average employee age is 29 Admittedly, a difficult industry—high

churn #1 on Fortune’s 100 Best Companies to

Work For 7th time in 10 years

As of Feb, 2016, 1,000 job openings 2.7 million applicants

FORMER EMPLOYEES SPEAK OUT

EMPOWERMENT-- "I'd say the relentless daily mediocre thinking of middle management types who are completely focused on metrics to the exclusion of all other factors. They don’t want to rock the boat, they don't know how to inspire their workforce, and they rely far too much on the Google name and reputation to do that for them.”

“I worked at Google for three years and it was very difficult to leave, but there was one major factor that helped me make my decision – the impact I could ever have on the business as an individual was minimal”

COMMUNICATION--"It is really hard to discuss any issue unless it is your friend you are talking to," said a former employee. "Objective discussions are pretty rare, since everybody's territorial, and not interested in opinions of other people unless those people are Important Gods."

IF THESE CONCEPTS ARE SO SIMPLISTIC, WHY AREN’T MORE COMPANIES DOING IT?

Companies are not looking at data Unaware of financial gain People analytics

Deterred from implementing company-wide policies due to barrier to entry High capital investment

Questions?

“I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” ― Maya Angelou