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Employee Retention: Research and Best Practices By Illene Roggensack January 2006 How do nonprofit and public service organizations attract and retain the best possible employees? Let's take a look at the research and "big picture" of employment in America. Next we'll call upon the collective wisdom of a stellar group of executive directors who recently attended a workshop on the subject of employee retention. "Any organization believing it can solve its attraction, retention and motivation problems solely by its compensation system is probably not spending as much time and effort as it should on the work environment - on defining its jobs, on creating its culture, and on making work fun and meaningful," says Jefferey Pfeffer in his Harvard Business Review article on "Six Dangerous Myths About Pay." In fact, studies show that financial compensation ranks quite low in worker priorities. Employees are most committed to their work when it:
(From Organization 21C, "Total Rewards Management" by Robert Heneman and Wendy Schutt, who suggest that financial compensation packages should be considered in tandem with two additional factors: learning opportunities provided and employee opportunity to be involved in job design.) The Gallup Organization, most famous for their opinion polling, has "studied human nature and behavior for more than 70 years, employing many of the world's leading scientists in management, economics, psychology and sociology." A significant portion of Gallup's work has been in studying "employee engagement." The Gallup theory is that an engaged employee is a productive employee. Gallup research, which now exceeds more than 4.5 million employees studied, "also proves that engaged employees are more profitable, more customer-focused, safer, and more likely to withstand temptations to leave." What is an engaged employee? Gallup contends that it is one who has:
(Again, note that nothing here indicates that financial compensation is a primary consideration of workers.) The "theme" continues in Gallup's 12-question (proprietary) test to measure employee engagement:
Based on their extensive analysis, Gallup has determined that 29 percent of the U.S. workforce is engaged, 55 percent is not engaged and 16 percent - or 22 million workers - is actively disengaged, or fundamentally disconnected from the job. The disengaged workers are costing up to $350 billion annually in lost productivity: absence, illness and other symptoms of unhappy workers.
Nonprofit managers, too, report that their workers often are/become disengaged. Most believe this is due to:
It is worth noting that many of these are not "the employee's fault," but are issues that can be addressed by the savvy - and flexible - manager. In creating an environment and culture where employees want to "stick around," domestic violence project managers from throughout Colorado share their best practices, most low- or no-cost: Communications
Acknowledgement and Appreciation
Healthy Employment
Finally, avoid the following false belief: An important and meaningful MISSION indicates a positive organizational CULTURE and healthy WORK ENVIRONMENT. There is no inherent correlation between these independent keys to a successful nonprofit.
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