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 Suf^estionsfor
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
ciiici^i 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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Conlaci John Driscoll.President [email protected] or 800) 637-4842
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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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In addition, organizations
can increase retention by using
effective performance manage-
ment. Performance management
should clearly c
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