Edited by Patricia Pulliam Phillips
2002, 179 pages, Paperback
SHRMStore Item #: 61.14501
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Managing Employee Retention Through Recognition
Wireless Communications Company
By Rick Jimenez
In an effort to respond to labor market challenges and to take a proactive approach to employee retention, a Fortune 500 wireless communications company conducted a study consisting of three surveys and consequently implemented a recognition initiative. Three different samples were surveyed, with the goal of identifying predictors of turnover and factors affecting an employee’s intention to leave or stay with the company. One of the key findings from the preliminary data showed that consistent employee recognition was rated very highly among employees as a factor influencing retention. This is consistent with industry research, which also identifies recognition as a key factor in retaining top-performing workers. These important findings, coupled with the human resources department’s strategic goals, generated actions to increase employee recognition. Those actions included improving tools and opportunities for employee recognition, as well as educating managers.
Wireless Communications is an industry-leading technology organization that employs more than 7,000 people worldwide. Founded in 1985 and headquartered in San Diego, California, where the majority of its workforce is employed, the company develops digital wireless communications products and services based on its patented technology. With annual revenues surpassing $3 billion, the company is included in the S&P 500 Index and is a 2001 Fortune 500 company that is traded on the NASDAQ stock market. The company has also been listed on Fortune magazine’s "100 Best Companies to Work for in America" list for the last three years as well as on the magazine’s "100 Fastest Growing Companies" list.
The Human Resources Department
The HR Department comprises approximately 120 employees and includes the following functional areas: benefits and compensation, employee relations, employee communications, information systems, international, learning and development, organizational development, and staffing. In addition to the functional areas, cross-functional teams address various issues, such as change management, retention, and employee recognition.
Background of Retention Initiative
In today’s tight labor market, particularly in the high-technology industry, employee retention is a key area of concentration for many companies. A shortage of skilled technical workers and the high costs associated with employee turnover have made attracting and retaining employees a challenging HR issue. In the case of Wireless Communications, changes in external economic conditions and changing stock price, as well as rapid growth and other internal business transitions, prompted the company to take a proactive approach to identifying potential employee retention problems. HR senior management decided to gather information about factors influencing retention. Although the company’s voluntary turnover rate of less than 6 percent was well below the industry average, HR management still believed that in order to maintain a talented workforce and remain competitive in the industry it was important to research and address potential retention problems. As a result, one of the major goals of the HR department in 2001 was to continue to attract and retain top talent.
HR senior management also rolled out additional strategic goals in 2001 that directly supported the need for a retention initiative. Two of those goals were to provide management with tools and development opportunities for increasing leadership and to increase employee commitment and motivation. Driven by the need to respond to a changing company, industry challenges, and internal strategic goals, the HR department established an initiative to gauge and address potential retention challenges.
Research and Data Gathering
The first step in identifying factors influencing retention was to gather data from across the employee population and information on external perceptions of the company. Led by the employee communications staff, the company launched a series of three surveys to gather data that would identify areas of opportunity as well as organizational strengths:
· Declined Offer Survey. Why do candidates decline offers from the company?
· Employee Workplace Survey. Why do employees stay at the company?
· Exit Interview Survey. Why do employees leave the company?
Wireless Communications selected a company with extensive research services and a telephone survey reputation, the Gallup Organization, to conduct the two surveys that dealt directly with people who were no longer affiliated with the company, the Declined Offer Survey and the Exit Interview Survey. Both surveys were conducted through outbound telephone inter views with Gallup’s representatives, which allowed an objective third-party representative to help determine a candidate’s reason for declining an offer of employment or an employee’s motivation for voluntarily leaving Wireless. The outside firm’s survey and inter viewing expertise enabled it to acquire more candid and forthcoming responses than the HR department typically receives during its standard exit inter view or in a conversation with a candidate who has declined an employment offer.
Representatives from the HR department’s staffing function were involved with establishing the groundwork for the Declined Offer Survey. Likewise, representatives from the employee relations function, who manage the company’s exit inter view process, provided criteria for the Exit Interview Survey. HR representatives from both functional areas met with Gallup’s representatives to develop specific survey questions tailored to Wireless Communications’ needs. Gallup then designed the surveys, which were administered in three phases, using samples from time periods throughout the year 2000. Upon the completion of each of the three survey administration sessions, the survey firm provided the company with an executive summary and survey data. The data was then analyzed internally to further identify trends and key findings.
The Employee Workplace Survey was a compilation of data collected in 1998, 1999, and 2000 that had been obtained from the survey used in Fortune magazine’s "100 Best Companies to Work for in America" competitions. During the application process for the competitions, the magazine works with an independent research firm to administer a random survey to a percentage of each competing company’s employees. Following the competition, the research firm provides each company with its individual survey results. In an effort to leverage this existing data, Wireless worked with the research firm to analyze the results.
Results of the Surveys
Declined Offer Survey
The Declined Offer Survey was unique because it measured candidates’ perceptions of Wireless, which were not based on being employed by the company or spending much time there. The 30-question survey gauged the percentage of potential talent lost to competitors and helped determine the reasons for a candidate’s decision to decline employment. The results also helped to assess ways of making the company more attractive to potential talent and remaining competitive in recruiting and staffing. The Declined Offer Survey sample returned a 55 percent response rate from candidates who had declined employment offers throughout the year 2000. As figure 1 shows, one of the most valuable findings was that more than half of those surveyed indicated they would be open to another opportunity with the company if one became available (Gallup, 1999). With their permission, those candidates’ names were passed along to the staffing function for re-recruitment.
Employee Workplace Survey
The Employee Workplace Survey identified an opportunity to improve employee recognition within the company. The three different samples allowed a comparison among data points from 1998, 1999, and 2000, as well as benchmarking against industry-leading companies. The 54-question survey, which was randomly distributed to a small percentage of active employees, also provided valuable data about employees’ trust in their managers, as well as other workplace attributes. The survey questions covered five categories: credibility, respect, fairness, pride, and camaraderie. These measured employee’s perceptions about the quality of their workplace relationships with management and other employees. The survey benchmark was composed of data from companies included on Fortune magazine’s "100 Best Companies to Work for in America" list for 2000.
Exit Interview Survey
Although each survey provided valuable information about important aspects of potential turnover and retention, some of the most valuable data was drawn from the Exit Interview Survey. The Exit Interview Survey sample returned a 51 percent response rate from employees who voluntarily terminated throughout the year 2000. The 54-question survey captured former employees’ perceptions of the company from preemployment through employment. Among the key findings was that the top reason former employees had accepted employment was their perception of the company as offering a good opportunity to grow and develop (Gallup, 1999). The survey also found that 42 percent of former employees were "lured away by another opportunity" as opposed to "something at the company that drove them to leave" (Gallup, 1999). More than half (58 percent) of the surveyed former employees said they would recommend the company to others as a good place to work (Gallup 1999).
One of the major findings of the Exit Interview Survey was that only 20 percent of the surveyed former employees "strongly agreed" with the assertion that while at the company "once a week, they received recognition or praise for doing quality work" (Gallup, 1999). Based on this important finding, HR senior management made recommendations to increase employee recognition across the company. As the HR senior management continued to analyze the data from all three surveys and provide recommendations, the key findings from the Employee Workplace and Exit Interview Surveys relating directly to recognition were quickly turned into actionable interventions. A recognition initiative comprising recognition programs, tools, and opportunities was created to implement the recommendations generated from the retention research.
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