Employee Retention

Competitive pay and benefits can get talent in the door, but can the money keep the talent? When employers demonstrate a commitment to work life balance, commitment to providing career development and training opportunities, with a supportive flexible working environment, caring attitude towards staff and a strong balanced emotionally intelligent management and leadership, they have found the key to retaining high-potential employees.

Often I hear employees say all they want is more money and they will be motivated. I had a conversation with a senior engineer recently and the discussion started off by him saying HR people need to understand that money is the ultimate motivator, just pay people more.

I, like Herzberg, believe money to be a satisfier not necessarily a motivator. After an employee is being paid competitively, any incremental increase in money will not necessarily translate into any related incremental increase in performance. One person’s capacity is finite and one usually has an equilibrium point of effort they exert to achieve company targets, objectives and tasks. What do I mean by “equilibrium point”, you know when someone has peaks and depressions of performance, due to various reasons, well they eventually return to their normal work pace.

Our challenge as HR professionals is to optimise employee’s performance by moving their equilibrium work pace upwards. This means that we work towards achieving sustainable high levels of quality performance by fully engaging the employee and thereby retaining talent. The phrase “fully engaging the employee” is a compounded concept that is as a result of many contributing factors, some of them were mentioned in the first paragraph above.

Towers Perrin’s 2007 Global Workforce Study explored the drivers of workforce engagement and noted that although relationships with managers are important, the actions of senior leadership and workplace programmes hold even greater weight. I will share my thoughts on the line manager’s role.

Line managers and their ability to manage people is a current challenge. This has been brought about by promoting technical competence into managerial positions, thereby losing a good technical resource and possibly gaining a bad manager. More often, these newly appointed technical resources are not equipped with the tools necessary to manage people. Yes, sometimes we make grave errors in using wrong criteria for promotion and we further compound the error by not providing the necessary training intervention and then we expect stellar performance from this promoted candidate.

The first challenge after finding yourself in this situation is to get the managers to accept people management as their responsibility. This message must come from the top and continuously be supported by all the senior Executives. The managers must not be allowed to abdicate their people management role to Human Resource. They also must not use HR as a “scapegoat” where they often say “It is not me, that is a HR policy, HR set that rule”. The Line Managers often want HR to write a rule about everything under the sun. This way, the line can refer to rule 3.2 under subsection 4 of policy x as the reason why they cannot do something.

I suggest a comprehensive training programme comprising of seminars, workshops, role plays, and mentors supported by the performance management system to help drive change among the manager group.

The training I played a part in develping looks at thirteen sections. Section one focuses on the big picture, role definition, organisational culture, reason for their team and managing upwards. Section two addresses the issue of transitioning from employee to manager, followed by managing tasks and objectives, setting targets, managing and measuring team performance. Section four looks at leadership, styles of leadership, and how to vary styles according to staff demographics (generation, age, gender, etc…). The other areas are customer service, networking, time management, delegation, coaching, industrial relations, using the HRIS and performance management with emphasis on managing poor performance. These areas should also be slanted and aligned to the strategic direction of the organisation.

In addition to the training, we designed a 180 degree feedback form be completed by the managers’ direct reports. The form was designed according to the ideal profile of a manager in my organisation. The ideal profile also informs the promotion criteria and the selection criteria and is also used as the benchmark when conducting training needs assessments. The form was designed to produce one single score and this is used as a measure in their people perspective of their respective scorecards.

We identified a number of measures that are indicative of the Line Manager’s people management skills. One of which is the number of employee relation issues that have been escalated to the division head and or HR which could have been handled at the managerial level. Other measures are the percentage of leave taken, the turnover (for specific reasons) within the department, and number of employees nominated for and received spot awards, and quarterly awards. The criteria for these awards are also aligned to the organisation’s desired culture and strategic direction.

One should also have baseline figures for these measures before using them as legitimate measures to track progress.

We have also re-organised HR to provide an increased business focus and support to the line managers in carrying out their duties.

In effect, when a decision is made to empower and train the line to have total responsibility and accountability for managing staff, the rest of the employees in the organisation have to align themselves to support that decision. The Mckinsey Seven S model is a useful tool to ensure all areas are addressed.

At the end of my conversation with the Engineer, after we exchanged stories about managers and how they manage, he admittedly declared that when his manager behaves in a certain way, it encourages him to surf the internet all day regardless of his high salary, positive upbringing and work ethic.



  1. Tim WrightApril 27, 2008

    Lots of very good information here. Thoughtful and thorough.

    Your points that “career development and training opportunities, with a supportive flexible working environment, caring attitude towards staff and a strong balanced emotionally intelligent management and leadership” contribute to employee retention are on the mark.

    My segmentation of those is into CORE components of an organization’s culture: Communication, Opportunity, Resources/Recognition, and Engagement.

    No matter what the focus/direction of an organization’s culture, the desire is for employees to engage actively in said culture. That engagement is the leader’s/manager’s responsibility. Providing thoughtful and continual communication that engages, opportunities to engage, resources and recognition to support engagement, and engagement by the manager as behavior model can and does make a significant difference.



  2. Michael L. GoochApril 29, 2008

    I totally agree with your comment about the “money” issue. As a warning to people that might misunderstand, lack of money can sometimes be a factor when we are dealing with poor paying employers and entry level jobs. Turnover in your organization and escaping cattle on a ranch are the same problem. Moreover, some of the basic solutions for the ranch might just work for the organization. Is there enough grass, hay, grain, and water to meet the basic needs? This is the same as asking if the employees are really making enough compensation to meet their basic needs. Under-fed cattle and under-paid employees will both fix their eyes on the horizon and start searching for improvement in feed or cash. I know that it’s extremely popular nowadays to quote “polls” that indicate money is not a big factor. In many jobs, I am sure that’s true. However, the positions at the bottom of the food chain don’t apply to this new “money is not important” paradigm. There is a colossal difference between $5.16 an hour and $10 an hour. Some people might think, That’s only $10K a year difference. That’s not a lot of money. They’re right when we’re discussing people with six-figure salaries. Now, I’m not advocating we go out and raise salaries. Nevertheless, we should be paying what is fair and equitable for the region and industry. Michael L. Gooch, SPHR author of Wingtips with Spurs: Cowboy Wisdom for Today’s Business Leaders http://www.michaellgooch.com

  3. Felicia LinchMay 15, 2008


    I enjoyed this article, very practical and useful. Totally agree money is not a motivator, once a certain level has been achieved. Like you we beleive that an Organisation that creates an enviroment of trust and has an engaged workforce will have sustained levels of performance and retention. I would suggest this is the reason why the starting point for any employee engagement initiative must be ‘Developing Commitment to the Organisation’ and the key enabler in doing that is leadership, inparticular, as you rightly point out line managers.

    Face 2 Face Ltd

  4. Nelicia JohnMay 19, 2008

    I agree that money by itself is not a motivator. However as stated herein for someone at the higere end of the range it is not significant, this however may not be same with pesons lowere done the range. I agree with paying to ensure a level of comfort for the lowest paid person.

    It is important for HR to educate the organisation about the role or HR as compared to the role of Line Mangers. Line Mangers need to recognise that they are infact HR Hanagers also. They manage the Human Resources within thier departments. HR provides support & structure to this.

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