When it comes to employee retention and talent management, a number of misconceptions exist. Many managers and executives feel that higher salaries and job stability motivate employees to achieve, but this assumption is not necessarily true. To create the best talent management programs—ones that keep employees engaged and productive, HR professionals need to learn the truth behind the myths that often plague these initiatives.
The following are a handful of the most common myths in the area of talent management:
Bonuses are the best way to increase performance.
According to Ray Rivera, the director of solutions management, workforce planning, and analytics at SAP, money can motivate employees, but bonuses are not necessarily the best way to increase productivity. Employees who already earn enough money to pay the bills are typically more interested in job satisfaction than further economic gain. Some people base success on the amount of money that they earn, but the average worker is often more interested in achieving happiness in the workplace. Rivera also warns that bonuses can sometimes encourage employees to engage in questionable conduct that could reflect negatively on the company.
When companies do use bonuses, he says, they should be an incentive for short-term goals and reflect an employee’s willingness to go above and beyond the job description. Bonuses based on long-term overall performance do not have the same motivational effect on employees. Instead, managers and executives may want to ask themselves what will make employees more engaged and happier overall in the workplace. Employees who feel fulfilled by their positions are intrinsically motivated to succeed and more likely to stay with the company.
Employee engagement is only important when attrition is high.
Too often, companies wait until situations look grim before they actively try to engage their employees. Engagement results in more than just lower attrition rates. Employees who are engaged put forth more effort. According to research, an employee who identifies as engaged performs 20 percent better and has a 44 percent lower rate of absenteeism than a disengaged employee. When employees like their companies, they commit themselves to its mission and become evangelists of its products and services in their personal lives. In short, investing in engagement from the beginning—not just when attrition rates begin to rise—ultimately results in a more productive workforce and, often, a larger bottom line.
To create an engaged workforce, HR teams need to find personalized ways to connect to people and get their feedback about the company and their work. In addition, engagement entails showing employees how their efforts contribute to organizational success and move the company forward. When employees clearly see the impact that their work has, they become more attached to the work and thereby more motivated to succeed. Companies with high levels of employee engagement have consistently achieved higher stock prices, according to a study that looked at 500 leading companies in a variety of industries. These high-engagement companies also had an 11 percent higher average three-year growth in revenue.
Employees are primarily focused on job stability.
Since the recession, a number of managers and executives have assumed that job stability is one of the motivating factors that keep individuals at a company. In truth, however, stability has always been an important part of attracting talent, but the employees that are most vital to a company are not focused on it. The best employees typically know their worth and have confidence that they can find a position at another organization should the need arise. Talent development that focuses on increased stability will not reach these most valuable employees.
Stability ranks 29th on the list of the 38 most important drivers of employee commitment. When managers focus communications with current employees on stability, they will do little to convince them to stay. In fact, overemphasizing stability may cause some employees to wonder if the company leadership is being disingenuous. What employees appreciate more is openness and honesty, which involves setting clear expectations for the future of the company. This transparency builds trust and demonstrates the value that leadership places in its employees.
Talent is inborn and can’t be developed.
When companies believe that employee talent is inborn, they alienate a large number of employees who could achieve great things with a bit of leadership and training. Writers like Malcolm Gladwell have shown us that practice is what really matters, not innate talent. Companies therefore need to provide the right environment for their employees to learn and practice the skills that they have acquired. Managers who believe that talent is inborn may fail to see the value of talent development programs and discourage their employees from making use of company resources. A skilled manager, however, can recognize employee potential and encourage individuals to engage in company training and development opportunities, which are a crucial aspect of talent development.