Tech & Work

Retention measures trigger new organizational vigor

To reduce employee turnover, one company launched an experimental program. After careful planning and execution, it put the power to change the culture into key employees' hands and revolutionized company dynamics.

IT services organizations struggle to retain and motivate their employees and deliver on tough deadlines, while ensuring that employee turnover and attrition remain low. Often, management falls into the trap of throwing money at valued employees instead of getting to the real root of what motivates them. At my company, we conducted an experiment in which we lowered attrition considerably and increased personnel productivity among the critical core employee group.

We were a 10-year-old, 500-employee strong IT consulting and services company, with offshore development centers in India and overseas offices in all major IT markets. There was a good amount of employee movement between offices and at client sites. We had a mediocre record of retaining employees. The problem manifested itself in lower productivity and higher friction between management and staff levels.

News of this problem was getting out into the market and we were finding it difficult to attract talented employees both from the market and from educational campuses. We sincerely wanted to change this culture and we had to do something substantial—build a program that would very quickly become self-sustaining and not be seen as HR-driven. It had to have buy-in from all of the managers at all offices, then percolate down, generating a serious buzz among staff. We wanted something that wouldn’t be learned about through the office grapevine or interpreted as hype.

We had a short time to achieve something measurable. We had to get our objectives and metrics right so we would know whether we were successful in what we were trying to achieve. We defined objectives from two angles: organizational goals and employee aspirations. We wanted to achieve both and not compromise on either.

For organizational aspirations, these were the objectives:
  • To minimize the attrition of those employees whose performance was valued
  • To improve the productivity levels of employees across the board
  • To build a culture where “right attitude” is a strong desirable: Of the three recruitment/promotion requirements of knowledge, skills, and attitude, we would award the most weight to attitude, then to knowledge, and finally to skills. This would be a major shift from stressing skills and knowledge and thinking of attitude as “nice to have.”

For employee aspirations, we wanted to make sure we achieved the following:
  • A sense of fair play in terms of ensuring that the right employee is given the right reward
  • A way to track and encourage the employees who had the right potential
  • Creation of leadership cadres at all levels: frontline, managerial, and executive

Before we launched the initiative, we made sure we had executive sponsorship and support from the board. We also secured expense and time budgeting commitments from division heads. We built feedback and review loops into the normal quarterly business review cycles so that reviews for the program would be inseparable from the more routine business reviews.

The Core Program
The Core Program (CP), as it became known, revolved around creating a core of high-performance, high-potential employees who would drive organizational growth, reduce inhibitive factors like attrition, and increase morale. The program was conceived and sustained along the following steps.

Employee climate survey
We did an exhaustive, written, form-based survey, which identified five motivators and five inhibitors at the organization, business division, and geographical office levels. With this, we created objectives at a much more granular, relevant-to-business level, as perceived by the employees. In other words, the survey results became the agenda for CP.

First-level filtration
We identified the employees from the total employee base who would qualify to be in the CP. To make it simple, we said that those employees who had put in 18 months of service would be eligible for inclusion. We felt it was important for employees to have spent some time understanding the industry and organization-specific business issues so they would be able to play a meaningful role in the CP.

CP criteria identify who among the first level would get into the CP
We used the well-known potential-performance grid as a template, shown in Figure A. We wanted to ensure that the employees inducted into the CP would be those who fell in the top-right quadrant. We felt that, while performance speaks to the quality and timeliness of past deliveries, it alone can’t be a good enough benchmark, and must be considered with the potential of the individual. For example, a successful regional sales manager (performance = high) need not always be a national sales head (potential = medium). In essence, we wanted to ensure that we understood the employee in terms of how well he had done in the past and how successful or versatile he could be in the future. With this, we arrived at a group of 100 to participate in the CP. You may download the template we used to identify which employees would be included in the CP.

Figure A

Launch the program
We launched the program by gathering the 100 CP participants. We gave them a program overview that included a four-stage process:

Unlearning so past “baggage” did not stymie their acceptance of new ideas

Learningto get acquainted with new aspects

Managing to ensure that managerial skills and attributes were evolved and applied well

Leading so we could create leaders from within

Set goals
Based on what we found to be the motivators and inhibitors in the employee survey, we set goals at a central level as well as at a business and geographical level. This was the trickiest part, because we didn’t want to set goals that were too tough to achieve or too easy to meet. We also wanted to make sure the goals were achievable by the local core team without them having to face any authority problems.

Monitor and decentralize
We felt the “steering wheel” needed to be in the hands of people who could manage matters at a decentralized level. We didn’t want to make it look like an HR program or the CEO’s program. CP facilitators would tour the regional offices and keep tabs on progress and advise on measures to be taken in case there were hiccups.

Merge the CP program into the business culture
The final step was to merge the CP program into the mainstream business processes.

The program was quite rigorous. The challenge was to give it respectability, create a desire in the minds of employees to belong to this program, and ensure that it created value for the organization as well.

The program yielded several benefits:
  • It created a means for airing grievances—not in a free-for-all manner by everyone, but by those people who were carefully screened for their responsible past behavior and high potential. Those who had previously felt lost among the larger company group now felt a sense of fair play because of the filtration criteria and the investments the organization was making in this group.
  • The group developed a strong list of operational suggestions to improve effectiveness. Participants started questioning some deep-seated practices. We prepped the senior employees to avoid dismissing such suggestions, to encourage discussions on them, and to let the group come to a decision on them.
  • It helped us identify employees with a genuine drive to work. It was clear from the many discussions that a certain group of employees had the most appropriate and mature attitude toward workplace issues. These folks were earmarked for key managerial and leadership positions. We marked knowledge and skill gaps that needed to be plugged and then did so through a variety of training programs, like achievement motivation training (AMT), sensitivity training, domain knowledge, technical skills training, and communication skills training.
  • It created a brand value for our HR practices. It led to attrition and productivity issues being addressed through cross-functional teams (subsets of the CP). The attrition level within the employee group belonging to the CP was down to low single-digit percentages.
  • We created a role model group to which the rest of the employees aspired to belong. The other 400 employees had something tangible to look forward to: better salaries, more responsibilities, more training opportunities, and, most importantly, more peer recognition, if they made it to the CP.
  • It created a strong performance culture. No guarantees were given to CP members that they would continue to be part of the CP forever. They had to constantly earn their place in it. Just as non-CP members can become part of the CP by their performance and potential, so also would CP members qualify to be edged out of the CP if they became complacent.

Key learning
An attrition reduction and productivity enhancement exercise need not be a pampering exercise or a centrally driven one. Backseat driving by HR departments and senior management may not always yield results. Sometimes it’s better to decentralize people practices in a complex and geographically dispersed organization with diverse business interests. Create a role model group and trust them to take the right steps.

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