5 | Workforce
What To Do About Turnover
The predominantly right-wing political assault on public employees is having an obvious impact: Public employees are running for the exits. While some may applaud this trend, we will all be worse off when fewer qualified people remain to provide the essential services we all need and expect. According to a Bloomberg Businessweek article, retirement applications from state workers in Wisconsin were up 79% in the first quarter of 2011 over the previous year. Texas expects retirements to be 54% above average this year. In New York, retirements were up 65% in 2010. Ohio saw a 27% annual rise in retirement filings and inquiries in March. Across the country, one-third of state and local workers with specialized skills are up for retirement in the next five years.
The City of Coral
Springs offers a positive path in this difficult situation. As the chart on the left, taken from its Baldrige Award-winning application (available here), shows, a government body that actively supports its employees can retain them—and it can keep them satisfied: Employee satisfaction has exceeded 90% for the last ten years.
How did Coral Springs do it? Here are a few factors mentioned in its application:
- The City fosters a culture conducive to high performance and…
Employee Engagement Epic Fail
In the first quarter of 2011, Wells Fargo posted a $3.8 billion profit. Wall Street ignored the profit and, worried that revenue growth is not keeping pace with expenses, Wells Fargo’s stock price fell.
Wells Fargo has responded to Wall Street’s concerns as most companies respond: It set out to reduce fixed costs. It launched Project Compass, a “bottom-up initiative” to involve employees in generating ideas that will cut expenses. And by expenses, Wells Fargo means jobs. The bank already eliminated 4,500 positions in its mortgage division in the first quarter, which may be one reason it posted a $3.8 billion profit, which still did little to appease Wall Street.
If you are a Wells Fargo employee and you are enthusiastic about supporting Project Compass, you deserve to lose your job. By its actions, the company is telling you that the interests of stockholders are its most important consideration. Employees are costs that must be cut. You are not valued. You are a commodity. You are expendable.
A few years ago I worked with a company called TBM Consulting, which helps companies become lean. Wells Fargo wants to become leaner. It could learn something from TBM.
The most important thing it could learn is…
21Apr2011 | Steve George | 0 comments | ContinuedKnow Your Employees
The numbers tell you that Advocate Good Samaritan Hospital (AGSH) in Downers Grove, Illinois, is a good place to work: associate, physician, and volunteer satisfaction were all near 100% in 2009. One of its core competencies is to “build loyal relationships,” which it does by using systematic processes to identify and meet workforce requirements.
A recipient of the 2010 Baldrige Award, AGSH has more than 2,700 associates (employees), nearly a thousand physicians, and 500 volunteers. In its award application summary, available here, AGSH describes the Workforce Satisfaction & Engagement Process that it uses to determine what matters most to its employees, physicians, and volunteers. As the diagram shows, regression analysis determines the most important factors, which are then validated through rounding and two-way communication.
Organizations can only achieve and sustain high levels of employee satisfaction and engagement through (a) profound knowledge of the factors that produce satisfaction and engagement and (b) an organization-wide commitment to improving performance on those factors. Advocate Good Samaritan Hospital’s results prove that its knowledge and commitment are world-class.
To read more about employee satisfaction and engagement, click on these articles:
- Understanding Employee Requirements
- A Culture That Values Employees
- How Does Your Workplace Measure Up?
- Employee Engagement Boosts Organizational Performance
- MEDRAD: Win with Your…
Evaluating Training Effectiveness
In its award application summary, Studer Group, a 2010 Baldrige Award winner, describes a tiered approach to evaluating training effectiveness. This is typically a weak area for most organizations, whether or not they integrate Baldrige. Most rely on participant surveys at the end of classes or courses to tell them whether the training was effective. At Studer Group, that is just one tool in the first of three tiers it uses to determine effectiveness.
Tier One methods include evaluations by everyone involved in the training. Tier Two measures effectiveness by how well the new knowledge and skills were applied. Linkage grids identify specific actions that participants should take, and online surveys capture the extent to which participants applied the learning. Tier Three assesses the degree to which new knowledge and skills affected results. For example, Studer Group has two employee segments: coaches and admin employees. Each coach is formally evaluated on the degree to which his/her partner’s (client’s) results improved on individual LEM (a Web-based performance management system) scores.
Tier Three addresses the true value of any training, that it make an impact on the success of the organization. Participant surveys tell you what people thought of the training but they cannot…
7Apr2011 | Steve George | 0 comments | ContinuedA Culture That Values Employees
What is your organization’s turnover rate? Why does it matter?
Software company SAS has an employee turnover rate of 2.6%. The info-tech industry average is 22%. SAS has approximately 11,000 employees. If it lost employees at the industry rate, it would have to replace an additional 2,100 employees each year.
How much does it cost to replace an employee? You can find a method of calculating that cost here, but a good rule of thumb is 150% of an employee’s annual compensation (the cost of recruitment, training, lost productivity, and lost sales, etc.). I don’t know what the average annual compensation is for an SAS employee who leaves the company, but let’s say it’s $60,000. Probably low for knowledge workers and certainly low for executives and managers, but we’ll be conservative here. If it costs SAS $90,000 to replace every employee, the company’s 2.6% turnover rate compared to the industry average 22% rate is saving SAS $189 million annually!
How does SAS achieve such a low turnover rate? According to CEO Jim Goodnight, “Knowledge-based companies need knowledge workers. Looking at services that keep employees motivated, loyal, and doing their best work as merely expenses and not an investment is, I think, a little…
22Feb2011 | Steve George | 0 comments | ContinuedFear in Workplace a Barrier to Success
Gallup recently identified five “internally built and locally maintained” barriers to an organization’s effectiveness: fear, information flow, short-term thinking, misalignment, and money.
Fear is a natural byproduct of many organizations’ cultures. It’s not necessarily the “cowering in the corner” type of fear (although I once worked for a company that inspired cowering) as much as the type of fear that breeds timidity, defensiveness, and blame. Does your organization produce fearful or trusting employees?
The chart was adapted from Driving Fear Out of the Workplace by Kathleen Ryan and Daniel Oestreich, who offer seven strategies for replacing fear and mistrust with energy and innovation:
- Acknowledge the presence of fear. Just talking about it in small groups and staff meetings is a start.
- Pay attention to interpersonal conduct. Identify abrasive or abusive conduct and develop a shared picture of positive relations.
- Value criticism: Reward the messenger. Promote a mindset that problems are prized possessions because they suggest opportunities for improvement.
- Reduce ambiguous behavior. Reduce the amount of incomplete, inaccurate, or confusing communications.
- Discuss the undiscussables. Uncover the issues people aren’t talking about and find ways to discuss them.
- Collaborate on decisions. Practice involving more people in making decisions.
- Challenge worst-case thinking. Help free people from the traps of their negative assumptions.
I’ve written before about the late quality guru W. Edwards Deming’s…
21Feb2011 | Steve George | 0 comments | ContinuedPay Inequality
There’s nothing in the Baldrige Criteria about equal pay for equal work, but that doesn’t mean it’s not an issue organizations should address. A new chart from the Bureau of Labor Statistics, courtesy of the NYT’s Economix blog and Huffington Post, shows that the majority of women still earn 80% or less of what men earn.
The Baldrige Criteria do ask how your performance management system considers workforce compensation. According to the data, most organizations consider women worth less than men. Here’s hoping Baldrige Award winners lead the way in addressing this discrimination.
18Feb2011 | Steve George | 0 comments | Continued
