Assignment 83

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4: Employee Engagement, Induction, Turnover and Retention

Dr. Mirna Safi

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Introduction

Managers are tasked with identifying high performing employees that they want to keep and putting in place strategies to keep them.

Managers must monitor the performance of underperformers with the view to potentially letting go those who fail to improve.

Historically the HR function tracked the movement of employees in terms of keeping figures, for example, in relation to turnover or exit interview transcripts.

Introduction

Recently, the idea of people as a potential source of competitive advantage, along with costs associated with recruiting new staff, has caused the HR function to revisit the areas of induction, turnover and retention.

HR has a role in educating senior members of the organization in terms of how all three areas are interlinked and how a strategic approach to their management can increase the overall success of an organization.

The role of HR in engagement, induction, turnover and retention

HR professionals must understand the real, tangible benefits that an initiative will bring to the organization.

What is it that such a proposed initiative hopes to achieve?

How will achieving this help the organization to increase its competitive advantage over other rivals?

What is the link between this initiative and the organizational aims and objectives?

Are the links clear to all stakeholders in the organization?

As a strategic business partner, HR must understand the business and be able to demonstrate how they contribute towards the organization’s competitiveness and success.

The role of HR in engagement, induction, turnover and retention

Work engagement

Work engagement describes how an employee is physically, psychologically and emotionally connected to their work or task (Kahn, 1990).

Employees who are engaged work with vigour, dedication and absorption and experience positive emotions, feeling happy, enthusiastic and pleased (Schaufeli, Bakker & Salanova, 2006).

To drive high performance, employers want engaged employees, not simply ones who are satisfied.

Work engagement

Employee engagement

Employee engagement is a broader concept than work engagement which involves those initiatives that the organization puts in place to connect the employee with the organization (Truss, 2014).

Engagement is linked to higher task performance, higher personal initiative and more innovative behaviour which benefits the team and the organization.

Engagement is also linked to higher organization commitment, retention, and lower absenteeism and turnover rates, which can be quantified in financial terms.

Employee engagement

The four enablers of engagement (Clarke and MacLeod):

Strong strategic narrative about the organization and its vision and values which employees can relate to.

Ensuring that all managers are engaging.

Employee voice is a fundamental requirement of employee engagement.

The role of organizational integrity is paramount

(Messages, actions, decisions, leadership and rewards must be aligned around positive ethical values that the entire organization supports)

Recruitment and selection

In addition to having the necessary competencies to undertake the role, they must also have the right blend of attitude, traits and behaviours to match the core values of the organization .

It is often easier to provide the necessary training to a new starter with regard to specific skills than it is to change a new starter’s attitude or behaviour towards their work.

In an effort to find individuals who provide a better fit with the organizational values, organizations are increasingly looking towards behavioural-based selection interviewing.

Induction

If employees do not feel a part of the organization from the beginning of their employment and begin the process of understanding and accepting the culture of the organization they have joined it is unlikely they will feel connected to the organization or their work.

Induction is the process that assists in developing this understanding.

What is induction?

Hill and Trist (1955:276) proposed ‘The Survival Curve’ which stated that there were three distinct phases that employees go through upon joining a new organization.

Induction crisis

Differential transit phase

Settled connection.

Each carries with it varying degrees of risk in terms of the likelihood of that employee leaving the organization.

Traditional ineffective approach to employee induction

An informational approach to induction includes a formal welcome, tour, overview and presentation of administrative arrangements.

Little, if any, consideration given to the broader strategic issues such as the organisational culture.

This can cause a general lack of interest from line management and new employees due to the limited scope of this approach and absence of a clear business case.

A new perspective on employee induction

New starters should be a source of new focus, energy and creativity to add to the organization’s Human Capital pool.

It is a steep learning curve for any new start – on average the time for new hires to achieve full productivity ranges from eight weeks for clerical jobs to 20 weeks for professionals to more than 26 weeks for executives (Rollag, 2005:250).

It is imperative that new starts transform into productive employees as soon as possible.

Onboarding

Onboarding refers to the mechanism through which new employees acquire the necessary knowledge, skills and behaviours to become effective organizational members and insiders (Bauer and Erdogan, 2011).

Onboarding is concerned with getting new starters to feel like they belong and are a part of their new organization as quickly as possible.

First impressions count for new starters and they quickly see what rate others work at and then work to this standard.

What works in terms of induction?

Organizations that are more successful at getting new starts up to speed quickly tend to adapt a relational approach to induction

Relational approach is based on assisting new employees to quickly build relationships with co-workers giving them access to information required to perform the role.

Success means striking a balance between information delivery and relationship development.

Tailor information given to the new starters. For example explain what other departments do and how they interact with the one in which they will be working.

Explain the roles and responsibilities of the key people with whom they will be interacting during the course of their work.

Ensure that they fully appreciate the strategic goals of the organisations and how their work will contribute to the achievement of these goals.

What works in terms of induction?

Specific practices to enhance the socialization process

Research has shown that a strategic approach to introductions is more effective than simply being introduced into a large group.

Strategically target individuals who will interact with the new starter early on:

- Mentoring process

- Buddy approach.

This proactive socialization promotes and demonstrates good organizational citizenship behaviours.

Employee turnover

Employee turnover is the number of people who will inevitably leave the organization and will need to be replaced in order to maintain production or service (Gunnigle et al., 2011).

Pull Factors (organizations have no control over):

Moving to a new location

Arrival of children

Retirement etc.

Push Factors: (organisations have control over):

Dissatisfaction with work

Lack of promotional and or developmental opportunities etc.

The impact of the external labour market environment on turnover levels

In addition to the push and pull factors, organizations can often find themselves at the mercy of the external environment.

High performers may seek opportunities outside of the organization or be headhunted by competitors

Boom or bust economies.

Organizations have to deal with turnover during cyclical boom and bust periods.

Attention turns to downsizing during a downturn in the economy and the knock on effect with employees who remain on in the organization (survivor guilt).

Should an organization seek to minimise its turnover levels?

Under performers who are not managed correctly through the performance management system are less likely to leave or improve their performance.

High performers are the most likely to leave an organization as they are more likely to be sought out by others and to want to advance their own careers or seek out new opportunities.

What is an appropriate turnover level for a business?

Different business models have different costs associated with turnover which makes turnover levels unique to the organization.

The cost of turnover will be higher where there is a limited pool of potential people to recruit from due to their qualifications or technical abilities or the cost of training is high.

The cost of turnover will be lower if there is an unlimited supply of individuals who could work with little or inexpensive training.

Some businesses operate successfully with a high turnover, their business model may even be based around a high turnover rate.

Cost of labour turnover

There are some basic labour turnover costs are common to all organizations:

Payroll costs, the calculation of outstanding contractual obligations such as holidays which may have to be paid if they cannot be taken.

Cost of cover for an employee while the replacement recruitment process is on-going.

Costs associated with the actual recruitment and selection process itself.

There are also costs associated with underperformance of individuals who are working out their notice.

What can organizations do to limit the impact of high profile leavers?

Having a clear succession plan in place at a very senior level is essential to ensure a smooth transition of power should the leader of the organization leave.

More and more organizations are seeking to encourage a team-based approach to work in order to minimize the effects of one member of the team leaving.

Measuring turnover

It is essential that there is clarity in terms of what is being measured and what is not.

Turnover Rate:

Number of leavers x100

Average number of employees

While this may seem like a straightforward calculation, HR professionals need to be cautious in terms of how they calculate the turnover rate and how they communicate this with the business so that all the stakeholders in the business are clear on the basis for the calculations.

Measuring turnover

Analysis of turnover should not only be to accurately measure the rate of turnover, but also where and why it is happening.

Exit interviews with departing employees to ascertain their reasons for leaving can form part of a wider analysis of turnover.

Cohort analysis where the level of turnover by individual cohorts or groups of employees is analysed.

A cohort is a group of people who share a common characteristic over a certain period of time.

This is particularly insightful in relation to an analysis by skill sets.

Thank you for listening!