Keeping Employees Happy

    August 26, 2003

The Basics

Recent research identified the following factors that employees consider necessary to be content at work:

** Learning Opportunities Explain how you’re going to help employees develop – and then follow through. Don’t make training an afterthought.

** Compensation It has to be competitive, but employees also want to understand how it works. For instance, if a sales program has certain incentives, staffers want to understand the formulas managers use to arrive at those incentives. If it’s a promotion they’re after, they want to know what they have to do to get it.

** Career potential Be straight with employees from the beginning. Not everyone can be the CEO, but assure them that you’re committed to helping them grow within the organization.

** Mentors Employees need and want role models: 60% of those responding said they’d be willing to leave their jobs just to follow their mentors.

** Benefit mix Offer more than just traditional health and welfare benefits. Adequate time off and flexible work hours can be powerful perks.

Developing Potential As I mentioned in the first section, employees want challenges and opportunities for growth. If you provide those opportunities, you’ll improve your staff’s morale as well as its effectiveness. Here are some ideas to help you:

** Place people in “stretch” assignments. People learn best by doing things beyond their skill. Place employees under some pressure; have them work with people who are more experienced than they are or thrust them into a leadership role. (Caution: Provide feedback, coaching and mentoring to anyone you place in a stretch assignment. Pressure without guidance is demoralizing.)

** Take risks. The best-qualified person isn’t necessarily the best choice. Offer high-potential people assignments they might not be completely ready for.

** Remove poor performers. Managers often tolerate underperformers and that’s a big mistake. Leaving underperformers in place undermines the rest of the staff. It’s difficult to offer growth opportunities to some employees when others clearly can’t handle a challenge.

A Reward System That Works After these are in place, you need a plan for positive reinforcement. Here’s how to create an incentive system that will recognize strong performance and encourage excellence:

** Save some incentive dollars for small thank-yous, special events and impromptu awards. Don’t put all your eggs in one big basket that rewards only annually. The problem with long-term systems is that objectives can change. What looked like a great idea in January may not seem so terrific in October.

** Change the incentive system periodically, so that it retains its motivational power. Bonus systems that never change become part of the background. Employees view them as entitlement programs. Review programs regularly (once or twice a year) to make sure staffers don’t take the incentives for granted.

** Match the system to the sophistication of those who work on it. In general, simpler is better. Don’t base incentives on profits if your people don’t understand how they can affect the bottom line.

Retain Your Staff By Building A Community Employees leave jobs quite readily, but they don’t blithely leave communities. Smart managers who’ve realized that improve retention rates by creating company-sponsored “social communities” throughout their organization. At some companies, employees can join bridge clubs, golf leagues, investment clubs, softball and basketball teams. The results are encouraging.

People like being a part of a community and will think twice about moving to another company when they will be leaving behind much more than work.

Kathleen OConnor is the owner of the OConnor Success System which provides professional growth programs for managers and entrepreneurs. To access our free resources, visit our website at You can sign up there for your free 4-part mini-course on communication skills and a free subscription to our monthly e-zine, The Edge.