Sunday, March 2, 2008

When an employee leaves... : On Managers' and HR policies

There have been a lot of articles about it. So I shall give reference and quote some text out. What you might find in addition in this blog, is the methods of quantifying the losses and may be a little bit about the remedies.

Quoting from Sriram's Weblog, "Beyond a certain point, an employee's primary need has less to do with money, and more to do with how he's treated and how valued he feels." Also read point of view of Mr. Aziz Premji and Mr. Gopalakrishnan at Ideal web tools. Finally as mentioned in the Sriram's blog, you might want to look at "First, Break All the Rules: What the World's Greatest Managers Do Differently" a book by Marcus Buckingham and Curt Hoffman, The Gallup Organization based on extensive survey with employees and Managers across various industries.

So, what is it that you looks, the book and articles spend lot of energies on why and how, while the book also talks about few techniques applied by good managers. Let me emphasize on the amount of losses a company makes while a talented employee leaves. This is also known as Employee Turnover Cost, and there are several tangible and non-tangible factors to be included in the quantitative analysis.

1. The cost of terminating employees.
2. The cost of hiring replacements.
3. The cost of training new employees.
4. The cost of lower productivity for new employees.
5. The cost of newer, less experienced employees maintaining your business in lieu of growing it.
6. The cost of lost ideas and suggestions.
7. The impact on the implementation of ongoing projects, i.e., their timeline and derivative effects
.. and many more

This it not all, there are online tools to calculate the turnover cost, I liked the one from University of Wisconsin, however there are many as listed below,

Employee Turnover Cost Calculator
Turnover Calculator
The Equal Opportunity in the Workplace Agency
Integrated Management Resources
Sibson Consulting Company

Now come to remedies, to the best of my knowledge, the book "First, Break All the Rules: What the World's Greatest Managers Do Differently" explains a lot and is one of the best source to managers. Important things to note for a manager, as per the book are;

- The best managers reject conventional wisdom.
- The best managers treat every employee as an individual.
- The best managers never try to fix weaknesses; instead they focus on strengths and talent.
- The best managers know they are on stage everyday. They know their people are watching every move they make.
- Measuring employee satisfaction is vital information for your investors.
- People leave their immediate managers, not the companies they work for.
- The best managers are those that build a work environment where the employees answer positively to these 12 Questions:

a) Do I know what is expected of me at work?
b) Do I have the materials and equipment I need to do my work right?
c) At work, do I have the opportunity to do what I do best everyday?
d) In the last seven days, have I received recognition or praise for doing good work?
e) Does my supervisor or someone at work seem to care about me as a person?
f) Is there someone at work who encourages my development?
g) At work, do my opinions seem to count?
h) Does the mission/purpose of my company make me feel my job is important?
j) Are my co-workers committed to doing quality work?
k) Do I have a best friend at work?
l) In the last six months, has someone at work talked to me about my progress?
m) This last year, have I had the opportunity at work to learn and grow?

Some of the other things a good manager would like to look at,

- Know what can be taught, and what requires a natural talent.
- Set the right outcomes, not steps. Standardize the end but not the means. As long as the means are within the company's legal boundaries and industry standards, let the employee use his own style to deliver the result or outcome you want.
- Motivate by focusing on strengths, not weaknesses.
- Casting is crucial, if an employee is not performing at excellence, maybe she is not cast in the right role.
- Every role is noble, respect it enough to hire for talent to match. It also sums up the hiring tectics, HIRE A FITTING TALENT and NOT ONLY EXPERIENCE.
- A manager must excel in the art of the interview. See if the candidate's recurring patterns of behavior match the role he is to fulfill. Ask open-ended questions and let him talk. Listen for specifics.
- Find ways to measure, count, and reward outcomes.
- Spend time with your best people. Give constant feedback. If you can't spend an hour every quarter talking to an employee, then you shouldn't be a manager.
- There are many ways of alleviating a problem or non-talent. Devise a support system, find a complementary partner for him, or an alternative role.
- Do not promote someone until he reaches his level of incompetence; simply offer bigger rewards within the same range of his work. It is better to have an excellent highly paid waitress or bartender on your team than promote him or her to a poor starting-level bar manager.
- Study the best managers in the company and revise training to incorporate what they know. Send your talented people to learn new skills or knowledge. Change recruiting practices to hire for talent, revise employee job descriptions and qualifications.