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Focus on the People, Not Just the Numbers
There are more formal and elaborate ways of recognizing and saying
thanks, which can require more sophisticated planning and ¬nancial invest-
ment. Yum Brands, the parent company of Pizza Hut, A & W Restaurants,
KFC, Long John™s Silver™s, and Taco Bell, has marching bands march right
up to employees in recognition of going the extra mile in the name of
customer service. The recognition is just one part of the company™s effort
to ˜˜brand™™ itself as a great place to work, which also includes more exten-
sive training in how to resolve customer issues and listen better. Since im-

Outdated Formal Recognition Programs
Here are three kinds of formal recognition that recognition expert,
Bob Nelson, believes are out of step with the times and today™s em-

1. Years of Service. Although 93 percent of companies offer this
one, it has become less meaningful in recent years as employee
tenures average three years or less and organizations are less
stable. Instead of rewarding endurance, companies should
focus on rewarding performance
2. Employee of the Month. This award sometimes recognizes em-
ployees just because it is their turn to be recognized, even if
they haven™t done anything particularly outstanding recently.
To quote Nelson, ˜˜We don™t need employees-of-the-month
as much as we need employees-of-the-moment.™™
3. Attendance Awards. The advent of telecommuting, ¬‚ex-time,
cell phones, pagers, and virtual work teams have made atten-
dance awards obsolete in an increasing number of organiza-
tions. They reward employees for where they are rather than
what they do.

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plementing the recognition and training programs, the turnover in Taco
Bell restaurants has gone down from 200 percent to 98 percent.13
Another example of a formal recognition program is the way Kinko™s
recognizes its best-performing stores. Each year all 1,200 Kinko™s stores
worldwide are ranked according to several criteria, including sales volume,
performance against budget, annual sales increases, and customer satisfac-
tion surveys. Employees of the winning store receive an all-expenses paid
week at Disney World while top brass from Kinko™s corporate of¬ce ¬lled
in for them.14
Nelson argues that many formal recognition programs have worn out
their welcome because they look backward at what has been done instead
of directing employees™ attention forward to goals and the rewards they
might ¬nd motivating to achieve those goals. In particular, he criticizes the
incentive industry that continues to promote trinkets such as pen sets, cof-
fee mugs, t-shirts, watches, clocks, paperweights, certi¬cates of apprecia-
tion, and plaques, all of which today™s employees value far less than being
treated well on a daily basis.15
The bottom line is that informal no-cost recognition by an employee™s
direct manager, usually in the form of simple thanks in response to a job
well done, does more to engage and sustain employee commitment than
all other available options.

Engagement Practice 42:
Make New Hires Feel Welcome and Important
If we want employees to feel valued and important, the best time to start is
during their ¬rst few days on the job. Increasingly, employers of choice are
going to great lengths to welcome new hires in special ways:

• Sending gift baskets to their homes before they start
• Putting pastries or candy near their desks to encourage other employ-
ees to stop by, introduce themselves, and welcome them aboard
• Assigning ˜˜buddies,™™ peer coaches, or mentors to coach new hires
through the ¬rst few weeks on the job or help them get settled into
a new community
• Training managers to manage the new hire™s ¬rst few days so they
know they are valued, that their contribution is vital to the com-
pany™s success, and exactly what is expected of them

The 7 Hidden Reasons Employees Leave

• Spreading out formal group orientation sessions so they occur over a
period of weeks instead of bombarding new hires with more infor-
mation than they can take in during their ¬rst few days on the job

Many organizations make a special effort to make sure new hires more
fully understand the signi¬cance of the work they do. John Sullivan de-
scribes the process of helping new employees appreciate the true value of
their contributions as ˜˜walking them downstream.™™16 There are several
ways to do this:

• Begin by ¬rst ˜˜walking them upstream™™ to see where the company™s
raw materials come from or how the customer makes ¬rst contact
with the company. Then walk them downstream so they can see
how the product or service has an impact on the customer.
• Let them talk directly with customers to ¬nd out how the product
or service has an impact on them.
• Let them sit in on a sales call with a satis¬ed customer.
• Give the new hire testimonials and articles about the ¬rm and its
products or services.

Orientation Program Slows New Hire Attrition
The Mid-America Program Service Center of the Social Security Ad-
ministration in Kansas City, Missouri had a new hire attrition rate
of 9 percent in 2001 and expectations of losing 1,400 employees to
retirement. The center conducted a survey of new hires and learned
that new hires felt disconnected and did not understood how they ¬t
into the big picture. Within three months a re-designed new hire
orientation”NEON (New Hire Orientation and Networking)”was
installed, focused on training managers how to interview and orient
new hires. The program features interactive group presentations and
one-on-one sessions with managers designed to familiarize new hires
with the SSA™s mission, its history, and career development opportu-
nity. By the summer of 2003, new hire attrition had been reduced
to 2.8 percent, and the center had saved over $400,000 in turnover

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Engagement Practice 43:
Ask for Employee Input, Then Listen, and Respond
A sure way to instantly know whether we are being taken seriously is to
observe how well others listen to us. We all have a basic need to know that
others care what we think. When people ask our opinion, we feel re-
spected. Yet, only 36 percent of workers say that their companies actively
seek their opinions.18
One problem here is that many managers are not very good listeners
and they know it. Many managers became managers because they see
themselves as leaders who already know the best way to proceed, and they
don™t want to be slowed down by having to check in with their employees
to get their input. ˜˜The workplace is not a democracy,™™ I have heard them
say, and they are right about that.
The U.S. Navy is not known as a democracy either, and yet one of the
best examples of a leader listening and acting on the input of the average
worker comes from the destroyer USS Benfold, as told in the pages of the
Harvard Business Review. When Captain D. Michael Abrashoff took com-
mand of this ship in 1997, its 310 crew members were mostly demoralized
and the typical attrition rate in the Navy was 40 percent over the ¬rst four
years. Captain Abrashoff set out to do something different to engage and
retain his sailors.
What he did was to reject the Navy™s traditional command-and-control
approach to leadership. Captain Abrashoff had served under then-secretary
of defense William J. Perry from 1994 to 1997 and had been impressed
with the way Perry listened so intently to everyone he encountered. Abras-
hoff knew he wasn™t a good listener, but vowed that he would ˜˜treat every
encounter with every person on the ship as the most important thing in
my world at the moment.™™19 It wasn™t easy to begin with, but Abrashoff
began asking crew members what they would like to change on the Benfold.
The sailors responded with creative, cost-saving, workable ideas that Cap-
tain Abrashoff implemented almost immediately in many cases. He set up
˜˜get-to-know-you™™ sessions and met in his cabin with every sailor on the
ship, asking a series of questions designed to get to know them personally
and soliciting their ideas for improving things aboard the ship. He started
placing more trust and responsibility in their hands and they responded by
doing their best so as not to let him down.
A result of Captain Abrashoff ™s steady efforts, the USS Benfold ˜˜set all-
time records for performance and retention, and the waiting list of of¬cers
and enlisted personnel who want to transfer to the Benfold is pages long.
It™s a long wait because very few aboard the Benfold want to leave.™™20

The 7 Hidden Reasons Employees Leave

Employees are hungry to be heard, and you can™t afford not to seek,
listen to, and implement their ideas. Here are several ways that organiza-
tions of all kinds are giving their workers more of a voice and showing
them the respect of listening well:

• Hold 50/50 meetings with employees, where management speaks
for 50 percent of the time on their goals, strategies, and ideas, then
gives the ¬‚oor to employees to respond for the rest of the meeting
time. These kinds of meetings can be conducted over breakfast,
lunch, or during regular staff meetings.
• Conduct regular employee surveys and be prepared to act on key
issues surfaced. This boosts morale by letting employees know you
take their ideas seriously and respect their input. Conversely, nothing
kills morale quicker than asking for input, then ignoring it. Surveys
don™t all have to be expensive undertakings. Some companies build
morale by sending out e-mail surveys every month and acting
promptly to correct seemingly small, but aggravating, problems.
• Conduct in-depth exit interviews that get to the root cause of why
employees are disengaging and leaving, then take action to address
the ˜˜push factors™™ that are driving good people out of the organiza-
• Get out of the of¬ce and practice Tom Peters™ MBWA principle”
˜˜Management by Walking Around.™™ The key is you have to be sin-
cere and prepared to act on their suggestions when you stop by and
ask employees for their ideas on how to make things better.

A Manager Who™s Paid to Listen
New York City™s Tavern on the Green restaurant is known for main-
taining a strong core of skilled workers in an industry known for high
turnover. ˜˜We average 425 employees,™™ says Tavern training director,
Laura Vaughn. ˜˜About 150 have been here more than ten years, and
some more than twenty.™™ Although the restaurant™s managing direc-
tor™s door is open to every staffer, he hired Vaughn partly to let em-
ployees know he cared about their concerns. ˜˜When I was hired, I
said what we needed more than anything was a paid listener. . . .
When we™re busy, we are so busy. Even a manager who wants to
listen has three other things going on and people feel brushed off.™™21

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• Let employees give anonymous written feedback to their managers
on how they can improve their people management skills, not as part
of a formal performance review, but for developmental purposes.
• Publish the suggestions left in suggestion boxes and act on the good

Engagement Practice 44: Keep Employees in the Loop

Few things say ˜˜you™re not important™™ more loudly than withholding in-
formation that employees want and need to know. Keeping employees out
of the loop creates disconnection, alienation, and disengagement. On the
other hand, companies that feed their employees a steady diet of vital infor-
mation about the company build ownership and commitment.
Most employers are familiar with the story of Spring¬eld Remanufac-
turing Company™s success with ˜˜open book management.™™ After many
frustrating years of working at a company where information was hoarded
at the top, Jack Stack started Spring¬eld Remanufacturing Company and
founded it on a key practice” opening up the company™s operations data
and ¬nancial information and teaching his workers to understand it,
thereby empowering them to make decisions based on it. Stack also gave
each employee a ¬nancial stake in the game, which increased their sense of
ownership in the business. The company™s annual sales grew from $16
million to $83 million in just nine years, and Stack™s book, The Great Game
of Business, attracted such widespread interest that dozens of companies,
such as Federal Express, Allstate Insurance, Exxon, The Body Shop, and
Hostess Frito-Lay have adapted Stack™s ideas to their own businesses.
One reason more companies have not adopted Stack™s approach is their
fear that giving information to employees would mean giving up their
power. The thinking goes that ˜˜they wouldn™t know what to do with it,™™
or ˜˜they don™t need to know,™™ or ˜˜they will be overwhelmed with all this
information,™™ but too often underlying such statements is the assumption
that employees are powerless children, too immature to be trusted with
important information. The executive who hoards information may feel
more privileged, important, and powerful, but the effect on the workplace
is a negative one.
In the absence of information, employees ¬ll the void with rumor born
of anxiety. As rumors spread, productivity goes down and distrust goes up.
Just the opposite occurs when the company decides to share information,
often because the information it shares also happens to be important in

The 7 Hidden Reasons Employees Leave

achieving the company™s goals. Cisco Systems openly reports all the bugs
in its products on a public Web page as soon as any problem is reported.
Rather than diminishing customer con¬dence in their products, this re-
porting builds trust and allows programmers to quickly correct the prob-
lem. Cisco™s CEO, John Chambers, one of the most admired executives in
American business, gives a Web-cast management update every few weeks
during which he responds directly to employee questions. Chambers wants
his employees to learn about company news ¬rsthand, not in the media.22
Here are some ways to keep employees in the loop:

• Openly discuss the company™s strategic plan and what it means to


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