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Insights Into Employee Motivation, Commitment and Retention

In this article, we will share Business training Expert’s opinion aout Employee Motivation, Commitment and Retention.

The full article can be viewed here. http://www.businesstrainingexperts.com/white_papers/employee_retention/Employee%20Motivation,%20Commitment,%20&%20Retention.pdf

Turbulence In the Work Environment

In slightly more than a decade (1988-2000), the eminent issue for companies was one of attracting and retaining people with the skills necessary to do the work. The situation became even more complex during 2001 as an economic downturn forced thousands companies to cut back or downsize their employee populations. In the past year alone, more than a million US jobs have been eradicated leaving a scenario of lost trust, eroded loyalties, financial demise, growing employee cynicism and diminished productivity.

Employee stress levels have escalated as morale and creativity plummet, while simultaneously, the cost of absenteeism and medical related expenditures have risen. Further, companies are now indicating that product quality is beginning to suffer; customer satisfaction is dropping and many organizations are beginning to experience a significant increase in turnover of key talent–especially amongst those individuals considered most ‘crucial’ to the downsized organization (Ambrose, 1996; Caplan and Teese,1997; Reichheld, 2001; Deal and Kennedy, 1999). In a sense, the manager’s function is that of a “catalyst” and as with all catalysts, the manager’s function is to speed up the reaction between two substances, thus creating the desired end product (Buckingham and Coffman, 1999). Specifically the manger creates performance in each employee by speeding up the reaction between the employee’s talents and the company’s goals, and between the employee’s talents and the customer’s needs. When hundreds of managers play this role well, the company becomes strong, one employee at a time. In today’s slimmed-down business world, most managers shoulder other responsibilities: they are expected to be subject matter experts, individual superstars and leaders in their own right.

These are important roles which managers execute with varying styles and degrees of success, but when it comes to the manager aspect of their responsibilities, ”great managers” excel at the catalyst role. What we’re faced with today, is an extremely dynamic and volatile work environment marked by continued turbulence in the economy. Managers face a difficult challenge of motivating and retaining employees in an environment of increased uncertainties (Mitchell, 2002). Essentially, no organization, profession or community has been unaffected by the continuing series of layoffs, dot com failures and restructurings. At the same time, jobs are being created at unprecedented rates: 700,000 new businesses are
being established annually and there are worker shortages in some professions— particularly the medical and services industries (Corporate Leadership Council, 2000).

So how can managers and organizations make sense of all this chaos?
Research shows that In the future, successful organizations will be those which adapt their organizational behavior to the realities of the current work environment where longevity and success depend upon innovation, creativity and
flexibility. Further, the dynamics of the work environment will have to reflect a diverse population comprised of individuals whose motivations, beliefs and value structures differ vastly from the past and from one another.

At the Root of the Long Term Problem–Demographics
Both the nature of work and the workforce are changing rapidly as reinforced by the decline in the volume and character of new entrants into the workforce. For instance, throughout most of the world (United States, Europe and Asia) the number of 16-24 year olds is declining. In l995, there were 1.3 million fewer l8 year olds (in the U.S.) than in l980–just as the service industries needed them the most. Last year more than 80 per cent of the new entrants to the workforce were minorities, women or immigrants. Other demographic trends show that there is an increasing gap between the highly educated and those with very little education; and more than 25 per cent of the U.S. population is older than 50 years—with those over 65 outnumbering teenagers (Hallett, l987; Naisbitt and Aburedene, 1990; Michaels, Handfield-Jones and Axelrod, 2001; Kayend Jordan- Evans, 1999).

The characteristics needed in today’s environment are those that embody the entrepreneur: drive innovation, energy and a special commitment to seeing something through to its maturity. Abilities to work cooperatively with other people and
organizations are also needed (Buckingham and Coffman, 1999). What is important for employers about these statistics is that they must now maximize the contributions and value of all employees—regardless of age, ethnicity, gender or style.

A report published recently by the Corporate Leadership Council, an independent research organization funded by industry and education institutions alike, indicates that shortages of sufficiently skilled employees at many levels of the labor market are being driven by long-term secular trends in the economy rather than by short-term, temporary “business cycle” factors (Corporate Leadership Council, 1999). The direct implication of this is that as attracting scarce talent becomes more
competitive, corporate investments are likely to shift from increasingly expensive recruiting programs, to lesser expensive retention initiatives in an effort to hold onto truly scarce and valuable talent. Even corporations traditionally sheltered from
labor instability will, at a minimum, be forced to adopt a defensive retention posture in order to protect their most valued talent from departing. Bottom line, employee retention may be the “break-point issue” which finally forces organizations to invest in a rigorous study of the contemporary workforce, with the intent of gaining “insight” into the motivators of employee loyalty, commitment and productivity.

Retention As A Strategic Business Issue
In today’s turbulent workplace, a stable workforce becomes a significant competitive advantage. If an organization has unstable workforce conditions, it’s forced to invest thousands of dollars in recruiting, orienting, training, overtime and supervision. Those dollars come right off the ‘bottom line’ (Reichheld, 2001; Dibble, 1999; Herman, 1999).

Without continuity, organizations don’t have ongoing close relationships with customers; customer loyalty is fragile; managers are stressed; conflict is more likely; efficiency is hampered. Such challenges make it difficult for an organization to compete in the marketplace.

Arguably, the most valuable (and volatile) asset is a stable workforce of competent, dedicated employees. Longevity gives a company a powerful advantage; depth of knowledge gives organization strength. The loss of a competent employee is increasingly difficult to replace with someone of comparable competence—even with an effective succession planning process. With a volatile labor market and competition for good people, organizations are forced to hire persons with less competence. If this scenario repeats itself enough, the aggregate competence and capacity of the organization’s workforce will gradually diminish—along with the ability to meet customer expectations (Ambrose, 1996). Dissatisfied customers leave, and take the organization’s cash flow and profits with them.

Important stakeholder groups (customers, creditors, investors, employees) watch workforce stability and capacity carefully. Workforce strength, capacity, and dependability influence the confidence of all these constituents.

Customers are increasingly concerned about the quality and service levels they get from suppliers. They want to have confidence that their suppliers can perform—especially in situations that call for specialized knowledge, fast response, or appreciation of the customers’ history with the company. Customer relationships are stronger when an organization’s workforce is stable and customers can depend on the company’s people—the continuity of their product knowledge, industry experience and proven performance.

Creditors continually observe the stability and performance of their clients. Any hint of potential problems (as witnessed by workforce turnover, etc), creditors will likely monitor the situation much more closely. This oversight means that the creditor might consume a lot of an organization’s time to stay on top of their risk…and that’s time and cost an organization needs to run the business more proactively. Investors are understandably very concerned about a company’s capacity to perform in ways that will positively influence the value of their stock. When they detect an unstable situation, they start asking questions (Mitchell, 2002). High turnover raises red flags that warn investors to be extra cautious.

Unhappy people can seriously affect employee morale. Whether they leave or not, disaffected workers can damage the attitudes of other workers (Caplan and Teese, 1997). Negative feelings impact the quantity and quality of work, absenteeism and tardiness, cooperation with supervisors, and a company’s ability to attract desired applicants. Instability of the workforce, often caused by ineffective managers, can cause far-reaching problems. When dedicated workers have difficulty getting their jobs done, they quite naturally look for other employment opportunities where they can achieve the satisfaction they seek from work.