By Sondra Whitt
One of my assignments while working on my masters degree in industrial/organizational psychology was to do an employee survey in a manufacturing company in order to develop employee evaluations. I quickly found out that one of the biggest problems in the company was that the employees didn’t feel valued. They felt that management didn’t listen to them or care about them. They didn’t feel like they received credit for their innovative ideas that saved the company a lot of money and time. Many were sullen, bitter, negative and unmotivated. I found this to be the case with supervisors as well as front-line employees. In general, they all felt like they were just putting in their time for a paycheck because that was what they had to do. If something “better” came along, they were quick to jump at the chance to get out. Obviously, there were clear morale and turnover problems — but upper management seemed to be oblivious.
High turnover and low morale are expensive drains in organizations. Low morale directly leads to low productivity and inefficiencies that affect the whole organization. It can also lead to things like more sick time taken, more on-the-job accidents, insubordination, theft, and sabotage. The cost of turnover is estimated, at a minimum, to be one-and-a-half times an employee’s annual compensation of salary and benefits. Not only is there the cost of the person leaving, there are also recruitment, new hire, training, and lost productivity costs. To put this into perspective consider the cost to a company with an average salary of $50,000 per employee and a ten percent rate of turnover. That amounts to $750,000 a year for a company with 100 employees. The cost to a company with 1,000 employees is a staggering $7.5 million!
It’s interesting that in these tough economic times, companies still struggle to find, hire and keep good people. If they think they can accomplish that with paychecks, perks and pensions — well, good luck with that. Studies show that most people don’t leave a company as much as they leave a boss. But in other instances, it’s not the boss so much as just feeling stuck in what they perceive as a dead-end job. Usually, it isn’t even a matter of wanting more money. But if we really want to know why people are leaving a company, the easiest way to find out is to ask the employee. Even better is to ask them before they leave. What are they unhappy about? What are they happy about? What do they really want? How can we help them get it? What are the obstacles and how can we help them overcome them?
In his book, The Dream Manager, Michael Kelly suggests asking employees what they want from their work and their life and then helping them figure out a way to get it. He refers to it as defining and achieving their dreams. In the process, this creates loyalty and dedication to the company. If people leave, it should be because they’re furthering their dreams, not because they hate working for the company.
Purpose Unlimited has found the path to helping organizations improve their bottom lines is by helping them create purpose-driven cultures. Employees need to know how the work they do makes a difference and fulfills the company purpose. That means the company has to help employees improve their lives — not just through paychecks, perks and pensions but by helping the employees find their purpose as individuals. The result is improved morale, increased productivity and lower turnover. And that goes straight to the bottom line.