Ask the Expert: Attracting and Retaining Talent

By David Sirota, Ph.D.

Question: What do employees want?

Answer: There are three basic goals of people at work.

First, to be treated fairly. We call that equity. Employees want to know they are getting fair pay, which is normally defined as competitive pay. They want benefits and job security. These days, employees especially need medical benefits, so those have become significant. On the non-financial side, employees want to be treated respectfully, not as children or criminals. Equity is basic. Unless you satisfy those needs, not much else you do is going to help. If they feel underpaid, or that the company is nickeling and diming, or wants to pay as little as possible, there is not much else an organization can do to boost morale. This runs contrary to what a lot of people in my field say – that pay is not that relevant. Baloney. It’s terribly, terribly important.

Second, employees want a sense of achievement from work. The key element is to be proud of what you do and proud of the organization for which you are doing it.

Third, camaraderie. This is also not mentioned much in our field, but it’s key – not only in the sense of having a friend, but working well together as a team. That is a tremendous source of satisfaction for people.

Question: Do you see a difference in attitudes among different kinds of employees or organizations?

Answer: We find these three elements are nearly universal. There is all this talk of new generations. For example, that Generation X does not care about job security. We find absolutely no evidence of that. We find no difference across countries, between men and women, or in the new economy versus the old economy.

Question: Your research shows most workers are happy at a new job for about six months before the honeymoon ends. What goes wrong?

Answer: We are often asked how to motivate employees. Our response is, that’s a silly question. The real question is: “How do you keep management from destroying motivation?” When we look at the data, we find that people coming to a new job are quite enthusiastic. Most of them are very happy to be there and looking forward to meeting their new coworkers. But as you study the data, you find morale, or enthusiasm, declines precipitously after five or six months. One theory is that there is a natural honeymoon that is bound to end. And yet we find that in 10% of companies the honeymoon continues throughout a worker’s entire career. So there are organizations that are able to maintain enthusiasm.

As a general proposition, it is hard to be enthusiastic about an organization that is not enthusiastic about you. Let’s look at a few specific things. One is job security. We expect employees to be enthusiastic, loyal and engaged in an organization, but with the slightest downturn or prospective downturn, we get rid of them. They are expendable. They are treated like paper clips. How can you be loyal and committed to an organization that seems to have absolutely no concern about your job?

Other things that suppress enthusiasm are obstacles to performance, such as insufficient training, poor equipment or findings that fit under the general heading of “bureaucracy.” These include useless paperwork and the inability to get a decision made, or a decision made on time.

Conflicts are another obstacle. People don’t come to work to fight.

Finally, there is the status structure of companies that treat employees as second-class citizens. Consider, for example, the distinction between hourly and salaried workers, as if two different categories of human beings exist. Salaried are professional, the thinking goes, and hourly are the ones you have to watch out for. There are status symbols, such as the parking lot. At large factories in the Midwest, salaried employees have one set of parking spaces and God knows how far away the parking lot is for the hourly workers. The high-morale companies have eliminated a lot of this stuff, which has nothing to do with conducting business. All it does is feed the egos of some people at the expense of the self-esteem of the bulk of the workforce.

Question: You acknowledge that some employees are “allergic” to work. How should managers deal with them?

Answer: About 5% of every workforce is allergic to work. These employees are shirkers. But managers in many companies, especially where there are large numbers of blue-collar workers or back-office operations such as call centers, treat the entire workforce as if it is the 5%. They set up rules and punitive measures for taking too long a rest break, etc. There is close supervision, so people who come in wanting to work, and hoping to take pride in their work, find themselves treated as if they are children or criminals.

About 16% of the companies we deal with have a hostile workforce. But the bulk of the problem is not hostility. It is that people have become indifferent. That is the silent killer. There are people who just don’t want to work for whatever reason. They become troublemakers and you have to deal with them in a very tough way. You have to focus on them. The mistake we make is we feel we have to be consistent, that we have to have the same rules for everybody. So companies are consistent in treating everybody as a child or a criminal. That’s very, very demoralizing.

Question: What can managers do to boost enthusiasm?

Answer: First, provide security. Laying off people should be the last resort, not the first thing you do. Some companies use a ring of defense. If the business is having difficulties, they retrain workers or bring work inside from subcontractors. There are a number of steps you can take before laying people off.

Second, where there are difficulties in getting work done, we talk about self-managed teams. Toyota, which has been an incredibly successful company, is an example. In the 1970s, Toyota wanted to know how to enrich the job of assembly workers and thought about having groups of employees build an entire car. But that would have been so inefficient. Toyota said instead it could have a team of workers manage part of the assembly line. The team could look at quality and at what kind of maintenance and support were needed, and it could decide how to rotate workers. As opposed to the usual top-down management, this approach is tremendously satisfying for workers, reducing the need for bureaucracy because the people essentially are managing themselves.

Recognition is also important. Employees do not have to be told that you love them, but you want to be appreciative of good work. It sounds very corny, but people are corny. People need this kind of feedback. A lot of rewards don’t work, including the employee-of-the-month one. Organization-wide awards should be like the Nobel Prize, where peers are involved in the selection of the individuals who receive the award for outstanding achievement, not day-to-day work. Some things are so basic it’s embarrassing to talk about, but in many focus groups, workers – when evaluating management – will say, “He comes in and he doesn’t even say hello to me.” That’s the kind of comment we get.

As for systems, we find the traditional merit pay systems with an appraisal and pay increase are quite negative. Workers feel no relation between what they do and their pay increase. A reward has to be felt as a reward. Research has verified a system such as “gain sharing” in which a group of workers judges its performance over time. If productivity goes up 20% and the workforce increases 10%, then that means there is greater efficiency. That result should be shared with the workers 50% and management 50%. This has a tremendous impact on productivity and morale.

Question: All of these recommendations seem so soft-hearted. Are you ever criticized for being naive?

Answer: Yes, all the time, mostly by hard-line managers and human resource managers. They are cynical about workers. But there are managers and CEOs who look at this and really run with it. They tend to be optimists and give people the benefit of the doubt.

About the Expert: David Sirota has been engaged in behavioral research and its applications for more than 35 years. He holds a doctorate from the University of Michigan. From 1959 through 1972, Dr. Sirota served as a Director of Behavioral Science Research and Application for IBM.

His activities there included the establishment of IBM’s worldwide employee attitude survey program. In 1972 he formed Sirota Consulting and developed a national reputation for enhancing organizational performance. He has taught at the School of Industrial and Labor Relations of Cornell University, at Yale University, and at the Sloan School of Management of the Massachusetts Institute of Technology. His most recent academic position was Associate Professor of Management at the Wharton School of the University of Pennsylvania.

Originally published May 4, 2005 at Knowledge@Wharton.com in an article titled “Giving Employees What They Want: The Returns Are Huge.”