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Employee Retention

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In 1999 employee turnover shot to its highest level in nearly two decades. On average, 1.2 % of the workforce left their jobs each month last year. This did not include departures due to layoffs, downsizing, or departures of temporary staff. Job turnover is soaring for a few reasons. One is definitely the strength of the economy. If companies need to find workers they can raise salaries, which increases the likelihood that someone will leave a job for one that pays more. Another reason is the loosening of bonds between employer and employee.

There are lower levels of loyalty in today’s work environment. I believe money and perks can be used to attract people to a company but to retain skilled workers, it takes more then just tangible elements. In order to retain good employees, today’s workplace must make the proper adjustments to meet their demands. Good employees will not continue to work for a jerk if they know they can find a good job elsewhere.

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Empowering employees, career advancement opportunities, the right job fit, and a positive workplace environment can foster loyalty and commitment. But, most importantly, is high-quality leadership.

First of all, employee ownership equals empowerment. Empowerment is getting employees to do what needs to be done rather then being told what to do. A controlling manager is not at the core of empowerment. “Efforts toward continuous improvement take hold only when employees feel a sense of pride and ownership in their jobs. And pride and ownership are the heart of empowerment efforts. Empowered individuals take initiative to find better ways to accomplish their everyday tasks” (Eitington, 161). Empowering employees allows them to be part of the decision making process. This leads to a better company image, employee satisfaction, and decreases employee turnover.

At Home Depot, headquartered in Atlanta, employees who are responsible for maintaining product aisles in the company’s stores, proudly and prominently display their names for customers to see. A smart organization gives its employees a sense of ownership. This doesn’t have to be in financial terms, as shown with Home Depot. By giving employees an integral role in the operation of their departments and business units, the company fosters loyalty and commitment from employees. It also inspires them to do their best. Giving employees enough freedom and power to carry out their tasks allows them to take ownership of the results. When individuals believe that the work they are doing is important and that their tasks are meaningful they will maintain commitment to the company and will desire to grow with the company.

Secondly, developing clear career advancement opportunities is an important step in fostering a sense of loyalty, trust, and commitment. Career plans, rewards for achievement, and encouraging further education are excellent ways to support employees. A career plan will help the employee set their long- term goals. Career development plans are agreements between employee and employer and they spell out exactly what one will receive to develop their skills such as tuition, time-off, formal training, classes, etc. Plans also include milestones for the achievement of learning goals. Rewards for achievement whether monetary such as a raise in pay or nonfinancial such as a change in title to reflect the level of work achieved are all-important to the fostering of loyalty and fulfillment. Encouraging further education not only makes employees more valuable to the company but it promotes a sense of well-being and satisfaction, which leads to loyalty and commitment.

Starbucks Coffee has more then 400 retail stores, 26 major airport locations, a thriving mail order business, and direct sales to businesses such as Nordstrom, Barnes and Noble bookstores, and Delta shuttle. They have sales growth of 65 percent each year. All Starbucks employees, known internally as “partners”, start their careers with twenty-four hours of classroom training at one of the company’s regional training centers. They study retail skills, coffee brewing methods, customer service, pouring the “perfect” shot of espresso, and much more. Courses are taught by district managers, specialists, and training mangers that have all been through the courses already and have worked in a retail store for at least two months. Employees are making careers at Starbucks instead of dropping out. Starbucks offers their employees increased training and career advancement and this is a key factor in employee retention.

Thirdly, the right job fit is an important component in employee retention. Providing opportunities to explore different positions within the company creates openness and growth. A great example is a chemical company that I read about in a consulting magazine. They place new scientists in the Research Assignments Program, which provides an introduction to various company research positions. These new hires spend 12-16 months exploring different research areas before they accept a specific position in a laboratory. These new scientists complete three to four different projects at different research laboratories. At the end of the program, each person transfers to a position that is chosen based on the individual’s preference and performance and the company’s current research priorities. This benefits new employees by giving them an opportunity to learn more about the company and helps them to develop a company network with a variety of managers and employees. A learning environment, such as this one, provides a chance to learn on the job and this improves skills, knowledge, and performance. It also keeps the employee’s interest level high. The employee will be more eager to go to work if they feel they will learn something new and improve themselves. Finding something that an employee is interested in and allowing them to go further with it is the beginning of employee loyalty. The best organizations provide employees with opportunities to learn and better themselves. This enhances employee trust and loyalty follows.

Also, corporate culture, company policies, and interpersonal relationships all work together to create the workplace environment. Culture drives the organization and its actions. Corporate culture speaks to the experience of work and what is meaningful to members, including shared beliefs, values, rules, and rituals within an organization.

Strive for a climate that stresses and rewards openness, freedom, exploration, experimentation, the interaction of different individuals, team collaboration, and the mutual partaking of creative experiences. Recognize that a closed system – one marked by limited entry and exchange of ideas, and stifling of thinking, feeling, and imagining – establishes roadblocks to needed creativity. (Eitington, 607).

A firm earns loyalty by creating a positive work environment that is stimulating and emphasizes employee growth. Today, loyalty is sustained through an organizational culture that encourages motivation, energy, and innovation.

Employees value a workplace in which their input is encouraged and appreciated. Emphasizing knowledge sharing and employee feedback is very important when looking to retain skilled workers. An open door policy encourages employees at all levels to ask questions, contribute ideas, and resolve issues. A sharing atmosphere gives everyone a voice in creating the type of corporate culture they would like to work in.

A company that values interpersonal relationships encourages managers to meet with their employees. Meeting over lunch to answer questions and share information helps create a tighter bond between employee and employer. The loosening of bonds between employer and employee is one of the reasons for high employee turnover. One-on-one meetings encourage employees to meet regularly with their managers and peers to discuss such topics as project status and training and development plans. Regular business meetings are an excellent way to get employee input, make improvements, and address concerns before they become problems.

Company and administrative policies can be a great source of frustration for employees, especially if the policies are unclear or unnecessary. A company can decrease dissatisfaction in this area by making sure their policies are fair and applied equally to all.

Employee empowerment, increased training and career opportunities, the right job fit, and a positive workplace environment are all major factors for retaining good employees. Most importantly, are the leaders who help create and enforce these. High-quality leadership is very important – studies show that an employees direct supervisor has the greatest influence on whether he or she finds a job satisfying.

Organizational Skills Associates (OSA), a management and organizational development company based in Madison, WI, creates employee surveys to ask how people feel about their supervisors, how they rate their work environment, availability of promotions and career training, the level of information exchange, etc. Bob Morris, president of OSA, feels that these factors are all part of overall job satisfaction. “Interestingly, the most common sources of satisfaction have changed somewhat in recent years. ‘It’s no longer tied to things like company loyalty’, Morris says. ‘You don’t see much of that anymore. People are loyal to other people. A lot of their satisfaction is tied up in the people – colleagues, supervisors, and so on’” (Hochgraf). The satisfaction level of most employees tend to improve when they are working with a supervisor that understands them and gives them choices in their work environment.

Bob Nelson, a management consultant, feels that to get the most from employees a manager must create a supportive work environment. In such an environment, employees will feel they can be creative and thus will take the initiative in their jobs. A manger can create a supportive workplace using a number of techniques. One is making employees feel safe so they will feel comfortable telling their supervisor bad news as well as good news. An environment that is safe encourages employees to take chances and management will give clear feedback on the results, good or bad.

Opening the channels of communication is critical in the ultimate success of an organization. When employees can communicate open and honestly with one another their motivation will be greatly effected.

Building and maintaining trust and respect is another way for managers to retain skilled workers. Being willing to listen to an employee’s feedback and ideas is very important when trying to keep communication open. A manger needs to set goals to be achieved by the employee: progress should be recognized and celebrated.

First, people require jobs that are so organized that they have a clear, worthwhile goal. They need to know that what they are doing is important and what success on their part will look like. Second, workers require immediate feedback about their accomplishments. They don’t want to do a lot of wheel spinning and worrying about whether they are on the right track or whether they hit the target. Successful performance in itself is a tremendous empowerer. Third, employees want to know when a job is complete. They very much need a sense of closure on their activities. (Eitington, 281)

A manger needs to recognize hard work and effort. This includes feedback because the members of a team need to know what is expected of them, where they stand, and how they are performing. Feedback needs to be honest and simple. Corrective feedback should be handled properly, as should effective feedback – both are necessary to maintain open and honest communication.

Empowering employees by giving them ownership in the organization, developing career opportunities, and fostering a positive work environment are all ways to mange and retain skilled employees in today’s work place. Employees are the greatest asset to any organization and they need to be developed. Managers who truly manage their employees can attract and retain good employees because they are able to build trust and commitment. Building trust and commitment with employees encourages loyalty and commitment from them.

In today’s work environment there is a need for a partnership between managers and workers. Based on a need for a stronger employee/employer relationship, managers need to energize, empower, support, and communicate. Good managers must create, not consume energy in the workplace. Today’s managers need to generate excitement, not just organize people and analyze numbers. Managers must make things happen in the organization. This is my recommendation for the work environment that I am currently involved in. The managers within the organization are allowed very little freedom to make their own decisions and are constantly waiting for upper management to tell them what to do. The employees view managers as the “bearers of bad news” because they merely act as the go-between between upper management and the employees. This discourages creativity in the work environment. Managers do not feel a need to energize their employees and this creates a bitter work environment.

You may have noticed that I did not mention salary, dress code, benefit packages, child-care, etc. when discussing retaining skilled workers. As previously discussed, I believe that these can be used to attract employees to your company but they cannot be used to foster company loyalty and commitment. The bond between the employer and the employee must be strengthened. Leadership style is the most important and direct influence on this.


Eitington, Julius E. The Winning Manager. Houston, Texas: Gulf Publishing

Co., 1997.

Family Practice Management (1999, October). Job Satisfaction: Putting

Theory Into Practice. J. Michael Syptak, MD, David W. Marsland,

MD, and Deborah Ulmer, PhD.: Authors. Retrieved September 10,

2000 from the World Wide


Hochgraf, Lisa: Author. Boosting Job Satisfaction by Defining and Pursuing

Worklife Happiness. Retrieved September 10, 2000 from the World

Wide Web: http://www.findarticles.com.


Cite this Employee Retention

Employee Retention. (2018, Jun 28). Retrieved from https://graduateway.com/employee-retention/

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