Jeffrey Saltzman's Blog

Enhancing Organizational Performance

The War on Talent

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I will describe a somewhat contrarian approach to the War for Talent, attracting and retaining the best and brightest, as a way of opening up new avenues of thought and encouraging debate on a topic that is critical for all of our organizations. Our approach to this topic, the paths we choose to go down, will in large part determine the future success of all of our organizations. Given this, let’s make sure we go to war with our eyes open, examining all possible avenues and methodologies we can choose from to make sure we can win not only the battle for talent but to ensure long term organizational success. 

The War on Talent can be thought of as having two main components. The first is building a “brand”, creating a sense among the job seekers that the organization is one which attracts bright people (people like me), sends out clear messages, enables them to get their job done and provides for them the sense of a meaningful future, treating them well. The second component is creating an environment, an organizational culture, where people want to stay and are constantly striving to perform at their highest potential. Luckily these two components are inter-related and we will examine both, using a combination of case studies and foundational concepts.

I was originally going to title this article “The War for Talent”, but I started thinking about “The War for Talent”, and wondered “what does that really mean”? Are companies battling with each other to attract a limited resource – talented people who can make them successful? In a country that just past 300 million, a world population of billions, is there not enough talent to go around? Does that really make sense? Are organizations looking broadly enough in their search for talent? Do they recognize talent when they see it? It is a tough world out there, isn’t it, with employees ready to jump at the first better opportunity that comes along. How do they define that better opportunity? Is it all about money, career, the grass being greener?  Loyalty to an organization is dead, right?

As organizations battle to attract the very best they believe they are looking for a competitive edge. Is that really the case? What about all those talented people within the organization who decide to leave? Is there anything that can be done to prevent or slow down the hemorrhage? There are a number of organizations which instead of worrying about their high turnover rates, lament about not having enough turnover. Is that really a problem? Or is it that the organization has created a culture that allows the talented people that they attracted in the past to go stale, to lose their innovativeness and the only solution they can think of is to “clean house”. Is that a copout, a way of avoiding the real issues?  

After much thought, I changed the title of the piece to “The War on Talent”, as I am not so sure that this War is with other companies or organizations in the competition for employees as much as it is with the potential employees themselves thinking about joining your organization and with the current employees of the organization. What do I mean by that?  The War on Talent is when organizations do their level best to drive out of the organization the talented staff that they have worked so hard to attract and this driving out establishes the organization as not necessarily the best place to be, thereby making the attraction of new talent more difficult. Before you dismiss this notion out of hand lets look at some data.

“To keep a lamp burning we have to keep putting oil in it.”- Mother Teresa

I took a look at a massive (millions of employees) database of employee attitudes and cut the data by company and tenure. The results were very striking. In every company the most positive employees were the ones with less than one year tenure, the newly hired. In as little as 6 months sometimes stretching out to 18 months the data began to decline. Often the least favorable employees in an organization are those with 5-7 years tenure. After that time period you began to see either a gradual recovery, but usually not back to the initial level, a flattening of the pattern or occasionally a continuing decline.

New employees come in with a high level of excitement, a can do attitude. Then after a period, they are out of training, or no longer the new person getting the attention, or wondering why their brilliance has not yet been recognize and they begin to deal with the more frustrating components of working through organizational bureaucracy to get their work done. 

At 5-7 years serious questioning begins to occur. Did I make the right career decision? Is this the right company for me, the right industry? Should I jump? People who make it through that period of introspection and doubt (and stay) begin to see a long-term career being possible at the organization they chose (cognitive dissonance also comes into play in that if I am investing so much time here it must be good, because if it wasn’t, I am not making good decisions.)

Remember all this data is collected on the people who stayed. You could logically argue that the more disaffected and less satisfied had already left the company and are not in the results – those who left can often be described as the most talented, those who had little or no difficulty finding other opportunities. Providing career guidance, mentoring, coaching, special experiences at the 5-7 year mark in someone’s tenure could help them get over the disillusionment hump.  

What are the key drivers of this employee disillusionment? When does disillusionment get to the point where employees begin to actively seek out alternative employment? What attracted employees to the organization in the first place? What can be done to change the organization so that it can attract and retain the very best talent?

Organizational culture can be thought of as consisting of 3 main components: Message, Performance and Future. A very simplified depiction of the MPF framework:

  • Message: Am I sending the right message in a consistent fashion throughout my organization? Do people know what they are supposed to be accomplishing?
  • Performance: Are people getting what they need (in the broadest sense) to be able to deliver on that message – to get the job done?
  • Future: Do people feel recognized and feel like they have a future with this organization?

The data on employee disillusionment when looked at though this lens falls across the entire framework, indicating the importance of each area in achieving organizational performance. (Numbers 1, 2, 3 above indicate areas of where suboptimum conditions exist, only 2 out of 3 factors of performance in place).

Disillusioned employees are created.  Specifically, the data suggests they are created by having their attitudes decline in the following areas:

  • Message: consistency of policy and communications;
  • Performance: organizational effectiveness, being efficient, planning, innovativeness, decision making timeliness, and training for one’s job (all of these diminishing ones ability to actually perform on the job, people get frustrated by not being able to get their jobs done – they want to do a good job);
  • Future: rewards and recognition (especially dissatisfaction with pay) and considerate treatment.

Communications is one of those areas that never seem to score very well on organizational assessments and since poor communications can literally drive people out of the organizations the question is why is it so critical and what can be done about it? There is a trait found in animals and people that have been fairly extensively studied called the Intentional Stance. This trait probably evolving out of defense mechanisms to keep animals alive, occurs when an animal assumes that a movement or an actively that it notices is felt to occur intentionally. “That is not the wind you heard through the trees but another animal that is stalking you”. By acting based on that assumption you may always be more cautious but also more likely to survive a bit longer. There is no reason to assume that this is not the case with humans as well.

I have noticed in organizations the same kind of assumptions being made by employees – the Intentional Stance. Things just don’t occur by chance – especially during periods of change – people assume that they are being driven by the active behavior of others – a variation of the Intentional Stance. During major upheavals, say mergers or downsizing or reorganizations, I have had conversations with many employees who assume that members of management know exactly what position they will have down the road and what their responsibilities will be, but because of a desire to hoard information are simply not telling them. The response that no one really knows is often met with disbelief. How many of us had heard the phrase “people here always assume the worst”? Well the penchant for assuming the worst maybe somewhat hard wired into us as a helpful survival mechanism. Organizations need to do an exemplary job at communications to help overcome this natural tendency.

Do communications ever receive praise or can employees ever feel that there is enough communications about what is going on? The answer is yes. The benchmark on communications was a consumer products company that I consulted to. They scored well above anyone else in this area. How did they achieve such high scores on communications? Ready for this….they communicated more than anyone else. And it was communications that employees deemed important to them. Managers have a tendency to treat communications as one of those check the box activities. “Check, ok I communicated, that is done; let’s now move onto other issues.” Unfortunately it doesn’t work that way and communications is a never ending, continuing requirement to creating an optimum culture. 

Nursing shortages seem to run in cycles. First we bend over backwards to attract new nurses to the profession, raising pay, proving flexible hours and schedules, recruiting in far off places, providing housing in high cost of living areas etc.; in general making it attractive to nurses and potential nurses to enter into the profession or to choose our organizations. We then begin to tighten the screws as far as we can, trying to eke out more patients per nurse, more patients per hour, more hours with fewer employees, more flexibility in managements ability to schedule etc. We then begin all over again with studies trying to figure out what we have to do to attract more nurses. Is the war for talent or on talent?

In one study nurses who had left hospitals within the last 9 months were asked, why they left and if they would consider returning. This study included approximately 10,000 nurses across 160 hospitals. Out of these nurses fully one-third said they would consider returning. What was the biggest reason why they left? No one asked them why they were leaving and reached out to them asking them to stay. The indicated that they would have stayed if asked and if they had their “grievance” dealt with. The grievance often had to do with their immediate supervisor and dealt with “Performance” frustration – the inability to get their work done. Again, they wanted to do a good job and felt like they were prevented from doing so. Realize that some of those in management dismissed the nurses concerns about not being able to do a good job, so that there can be differing points of view, but also realize that the nurses were acting on their own perceptions and not those of management.

How important can it be to examine your culture and make sure that it is healthy, what you want or need it to be. One Pharmaceutical found out after a few years of conducting employee surveys regularly, covering matters of importance to the employees and most importantly involving those employees in the solutions to issues that were identified from the survey that the employees no longer felt it was necessary to have 3rd party representation. The union was decertified. Trying to decertify the union was not the driving force behind the survey process and implementing actions based on the survey results. However, when employees felt that their needs were being met through the normal business processes that were implemented; they did not see a reason to have a union represent them. Both sides decided to call off the war on talent.

An area of intense debate right now in the employee survey and culture measurement industry is whether surveys should be conducted in an anonymous or identified fashion. With the advent of electronic, integrated personnel systems with finally, fairly accurate data, much information can be passed to the survey provider that in the past would have been asked for on the survey itself. In fact much information can be passed that was never previously available or asked about. All of the surveys are still confidential, and the survey responses are anonymous to the organization being surveyed. But in identified surveys the consulting firm knows who is who in terms of responses. When matched up to records from the personnel system, very powerful analyses can be conducted. For instance, how top rated performers rate rewards and recognition vs. others in this organization? (In one organization where this was done the only difference I could find between top rated performers and poorly rated performers was on feeling valued by the organization. It did not affect the likelihood of staying or leaving. It did not change other aspects of their behavior or whether they felt that their performance appraisal was of value in helping them improve. So it appeared that the performance appraisal system simply created two groups those who felt valued and those who did not.)

Another very power analytic method is called Life Cycle Surveys. With a regular surveying process we can track “the same employee” through socialization (what attracted them, what was their path of entry, how orientation is going, is the job what it was originally described to be etc.), though early to mid-career (views towards training, advancement, pay etc.) to exiting (reason for leaving, where they are going, would they consider coming back etc.). By tracking the same person through their career, it becomes possible to develop warning indicators of turnover at the individual level, not simply for groups of people, to know which avenues of selection yield lower turnover, which employees tend to end up as the highest performers, how to better recognize talent etc. The potential is simply enormous. 

There are multiple ways of course of recognizing talent and we have a thing or two to learn about the recognition of talent from fish. What could fish possibly know about talent recognition and turnover? Fish do know a thing or two about employee selection – coral reef fish specifically. They employ a very interesting method to determine whom they should hire while interviewing candidates for a job.

Coral reef fish experience what must be an uncomfortable sensation. Parasites tend to attach themselves to their skins. In order to rid themselves of these parasites they visit and employ “cleaner” fish to remove the parasites. But how does the coral reef fish know which “cleaner” fish will be best at removing the parasites? They have developed some skill at employee (fish) selection, skills that are useful for human managers to understand as they look at potential candidates for a job. 

The cleaner fish have a choice as they work on cleaning the coral reef fish. They can work diligently eating parasites and cleaning off the coral reef fish, while not taking what has been described as a delicious bite of mucous membrane (I assume it hurts to have a cleaner fish bite your mucus membrane), or they can chomp on the membrane and get a more tasty meal then just parasites. It has been shown that when other coral reef fish are nearby (potential customers) and watching the cleaner fish, the cleaner fish are more likely to behave appropriately – foregoing nibbles on mucus membranes. This gives you a sense of what appropriate supervision can do but it also demonstrates that the cleaner fish know what is expected of them on the job. (I wonder who wrote that job description.)

Where it gets really interesting is that coral reef fish who have witnessed the desired behavior on the part of the cleaner fish are more likely to choose those that behave in the desired fashion for their own cleaning. They are in essence interviewing candidates for the position by observing the cleaner’s on-the-job performance and then selecting those that perform best. They seem to instinctively know that one of the best predictors of future behavior is past behavior. (I had to go to graduate school to learn that, so I wonder what that says about me.)

What can we learn from this about employee selection? Human behavior often has parallels in other animals. When psychologists study personality characteristics it has been found that as people age it becomes very difficult for them to change and by 30 years of age or so, personality traits seem locked-in. One theory of personality describes how people can change if they undergo a “unfreeze – change – refreeze” experience, but the “unfreeze” events, events that have the potential to “unlock” personality characteristics or behaviors tend to be of a fairly significant nature for the person. The point being, people tend towards consistency in the experiences they seek out and in how they behave and in fact one of the best indicators of how an employee will perform on the job is past job performance.  Don’t expect a 40 year old manager who acts immaturely to suddenly find a mature side or someone who exhibits marginal ethics to suddenly walk the straight and narrow, or an employee who is generally sloppy or last minute in their work to suddenly become fastidious and timely – at least not without a very significant event to propel them. Even then the rates of recidivism will be extraordinarily high.

The goal of psychologists when they construct assessment centers or develop job based testing for selection is the same as the coral reef fish, that is to set up a situation where on-the-job behaviors can be observed in order to get a sense as to how the candidate will perform in the future; in the case of the psychologist from a simulated or historical standpoint and in the case of the fish by direct observation. The use of biodata, such as job history, the number of jobs held (previous turnover), promotions, credit worthiness, even speeding tickets etc. is another method to examine past behavior.

Selecting the right employee for the job in the first place, one that fits correctly into the organization and has the necessary skill set is absolutely critical. But do not take the above example about fish and the tendency of people to behave consistently to mean that there is no benefit to developing or training employees. In fact just the opposite is true. Employees can benefit tremendously from having someone “show them the ropes” if you will of how to be a highly performing employee in the organization. They may have in place the correct personality or skill set but they may lack experience or some other component that would allow them to excel, to be a highly performing employee. Development for these people can be very advantageous – especially early in their careers. However if you have an experienced employee or manager who consistently exhibits behaviors that are not appropriate (biting mucous membranes for instance), don’t keep holding out hope that they will someday change their behavior if just given one more chance – it may be a fools vigil.

“Nothing is more difficult, and therefore more precious, than to be able to decide.” – Napoleon Bonaparte

Written by Jeffrey M. Saltzman

November 19, 2009 at 4:10 pm

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