Managing Outflow
Talent Flow and Retention
Hiring and Retention:
Flip Sides of the Same Coin
• Better hiring
• Lower turnover
lower turnover
better hiring
• Both are critical to firm performance
• Both should be based on performance
• Difference: retention is less “formulaic”
Talent Flow: The Google Story
• The Google Success Story
• Zero turnover
Talent Pool Depends on Flows:
• Relative rate of inflow of
good vs poor performers
• Rates of outflow of:
– Good performers
– Poor performers
Hiring
Retention
Termination/Turnover
• Rates of change from:
– Good -> poor performance
– Poor -> good performance
Adaptation &
Development
Issue 1:
Why Performance Turns Negative
• Gradual
– Skill obsolescence
– Stress/burnout
– Dissatisfaction -> negative adaptation
• Sudden
– Emotional reaction to events
Work Adaptation Process
Job Satisfaction
Stable Behavior
Problem-Solving
Avoidance
Dissatisfaction
Retaliation
Exit
Capitulation
Problem
Behavior
Turnover
Adaptation: Problem-Solving
Trying to solve the problem
• Talking with supervisor
• Making informal changes in job
• Seeking outside help
Adaptation: Avoidance
Taking a “who cares” approach
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Being absent or late
Goofing off at work
Not working as hard as you could
Letting things slide that won’t be
noticed
Adaptation: Retaliation
Trying to “even the score”
• Towards the firm
– theft, sabotage, bad-mouthing
• Towards coworkers
– gossip, being uncooperative, violence
• Towards customers
– poor service, theft, violence
Adaptation: Exit
Avoiding source of dissatisfaction
• Physical Withdrawal
– Quitting
– Transfer
• Psychological Withdrawal
– Alcohol/drug abuse
Adaptation: Capitulation
Giving Up
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Perseverance
Lowering expectations
Disengagement
Health consequences
So What Do People Really Do?
• Asked employees to think of a time
when they were dissatisfied
• What did you do?
• If that didn’t help, what did you do
next?
Rosse & Saturay (2004)
Responses to Dissatisfaction
3.50
3.00
Initial
2.50
Followup
2.00
1.50
1.00
0.50
0.00
Problem
Solving
Planned Exit
Avoidance
Equity Retal
Loyalty
Adjust
Expect
Disengage
Impulsive
Exit
Cathartic
Retal
Source: Rosse & Saturay, 2003
STUDENT Responses to Dissatisfaction
3.50
3.00
Initial
2.50
Followup
2.00
1.50
1.00
0.50
0.00
Problem
Solving
Planned Exit
Avoidance
Equity Retal
Loyalty
Adjust
Expect
Disengage
Impulsive Exit
Cathartic
Retal
NONSTUDENT Responses to Dissatisfaction
3.50
3.00
Initial
2.50
Follow up
2.00
1.50
1.00
0.50
0.00
Problem
Solving
Planned Exit
Avoidance
Equity Retal
Loyalty
Adjust
Expect
Disengage
Impulsive Exit
Cathartic
Retal
Source: Rosse & Saturay, 2003
Implications of Adaptation
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What Can You Do to Maximize Positive
Forms of Adaptation?
• Create a High-Satisfaction, High-Performance
work culture
• Encourage dissatisfied employees to choose
Problem-Solving
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• Encourage collaborative approaches to
conflict management
Issue 2:
Why Do Employees Quit?
• Because they want to
– Dissatisfied with current job (“push”)
– A more attractive alternative exists (“pull”)
• Because they can
– Turnover (and absence) are much higher during
periods of low unemployment
– “Golden handcuffs”; family responsibilities;
age/mobility constraints
• Because they “have to” (?)
The Turnover Triangle (or “Pie”)
Workplace
Individual
Environmental
Individual Factors
• Turnover profile??
– Low Conscientiousness and Emotional
Stability
– High Openness to Experience
• Building self-efficacy and sense of
control
• Accommodating differences in values
Environment Factors
• Economy/Labor Market
Environment Factors
• Economy/Labor Market—WHY?
• Unavailability of jobs – people can’t find
jobs, or don’t want to risk looking for a
job
• “Frame of Reference” effect on job
satisfaction
• People with jobs are more satisfied during
periods of high unemployment
Environment Factors
• Economy/Labor Market
• Socio-Demographic Changes
• Can’t control—how do you cope?
Workplace Factors
• Hiring the right people
• Job Satisfaction
12/3/2006 MercuryNews article:
• “Employers with unhappy workers, take
heed: The tables might be turning.”
– “We have a little bit of a leading indicator going
on here. We know that employees are getting less
satisfied with their jobs. So turnover may
increase.''
• “The biggest reason for the expected
worker exodus? Worker dissatisfaction.”
2005 Conference Board study:
Trends
• Half of Americans are satisfied with their
jobs; down from nearly 60% in 1995
– 1/4 of the American workforce is simply
“showing up to collect a paycheck.”
• Drop in job satisfaction was largest (61%
to 49%) for workers aged 35 -44, and
smallest for oldest workers
2005 Conference Board study:
Sources of satisfaction
• Least satisfied with bonus plans,
promotion policies, health plans, pensions
• Less than 1/3 of supervisors and
managers are perceived to be strong
leaders
• Only 1/3 are satisfied with pay
• Two out of every three workers do not
identify with or feel motivated to drive
their employer's business goals and
objectives.
12/3/2006 MercuryNews article:
• “The main lure is not better pay elsewhere”
• Least satisfied with career and affiliation, “a
strong indication that workers were
disengaged with their companies.”
Survey of ~1300 workers by Sibson Consulting
Key Sources of Dissatisfaction
(Rosse & Saturay, 2003)
• The Boss
– Incompetence
– The “Jerk Factor”
• Coworkers
– Hard to live with
– Not doing their jobs
• Company Policies and Practices
– Esp dealing with work load and pay
• Work Challenge
Job Characteristics Model
Job
Characteristics
Critical
Psychological
States
Skill Variety
Outcomes
Meaningfulness
Intrinsic
Satisfaction
Autonomy
Responsibility
Retention
Feedback
Knowledge of
Results
Quality Work
Significance
Task Identity
Common Job Satisfaction Factors?
• Maybe:
– Adequate/fair rewards
• Financial (pay, benefits)
• Intrinsic (challenge, meaning)
– Supportive work environment
• Boss, coworkers, customers
– Connection with company
• Values, goals, purpose
• But you need to figure out specifics
Assessing Workplace Factors
• Climate/Satisfaction Surveys
What Do Surveys Measure?
Job Description Index
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Work (intrinsic factors)
Coworkers
Supervision
Pay
Promotion Opportunities
Overall
What Do Surveys Measure?
Minnesota Satisfaction Questionnaire
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Ability Utilization
Achievement
Activity
Advancement
Authority
Policies & Practices
Compensation
Co-workers
Creativity
Independence
Moral Values
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Recognition
Responsibility
Security
Social Service
Social Status
Supervision
– Human Relations
– Technical
• Variety
• Working Conditions
Assessing Workplace Factors
• Climate/Satisfaction Surveys
• Exit interviews/Surveys
Assessing Workplace Factors
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Climate/Satisfaction Surveys
Exit interviews/Surveys
MBWA (Mgmt by Walking Around)
Watching for behavior that might be
caused by dissatisfaction
Bottom Line
• NO MAGIC BULLETS
• Turnover is inevitable
• Turnover (talent flow) needs to be
managed, not reduced
• Dissatisfaction is key driver of turnover
and other performance problems
• Use Turnover Triangle for diagnosis
• Work to (1) reduce dissatisfaction and
(2) encourage positive forms of adapting