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Today we tackle how to create better engagement with your employees by using goals in your organization.
Here’s a fact you probably wish wasn’t true: your employees aren’t as motivated as you think or even hope they are. It’s statistically likely a large portion of your workforce is mentally checked out. Gallup released data showing that engagement has risen since 2014, but in 2015 we are still at a stagnant 32%. As we round the bend to 2016, chances are the situation is not much better. Think you don’t have this issue with your workforce?
Right now, your best employees might be daydreaming about leaving your office for greener pastures. In fact, a study on candidate behavior from CareerBuilder found that 3 in 4 full-time employed workers are open to or actively looking for new job opportunities. Look around the room, you may be surrounded by passive job seekers at this VERY MOMENT.
So what exactly is the problem here? Perhaps it’s a lack of communication between upper management and the people on the ground who keep your company moving. Less than half of survey respondents said that their organizations discuss issues truthfully and effectively. For most, these check-ins happen monthly or quarterly, giving employees a lot of time to lose sight of important objectives and feel adrift.
Proactively keeping organizational goals top-of-mind throughout the organization is the best way to get your workforce motivated, improve employee engagement, and reduce employee turnover. But before we get into how reinforcing goals can improve employee retention, we must first understand why it’s imperative to reduce turnover. First, let’s take a look at how SHRM describes turnover rate (and the difference from retention rate).
Many employers use the terms “retention rate” and “turnover rate” interchangeably, whereas others feel one is simply the inverse of the other. In fact, the retention rate, sometimes referred to as the “stability index,” measures the retention of particular employees over a specified period of time and complements the turnover rate metric, giving a more complete view of worker movement than calculating either metric alone.
The basic formula for calculating retention is:
# of individual employees who remained employed for entire measurement period /
# of employees at start of measurement period) x 100
The basic formula for calculating turnover is:
(# of separations during the measurement period /
average # of employees during the measurement period) x 100
Employee Turnover = Big Money
It's no secret employee turnover can be extremely costly for organizations of all sizes and for employees at all levels. How costly? For entry-level employees, it costs between 30-50% of their annual salary to replace them. Certainly this isn't a cost most companies are looking to incur.
Unsurprisingly, things get even more expensive the farther up in the organizational chart you go. For employees in senior executive positions, turnover can cost as much as 400% of their current salary. But those are just the costs of employee turnover in dollars, which doesn't take into account how turnover can waste human capital, momentum toward goals, and hurt employee retention.
Goals + Better Employee Engagement
One of the reasons your employees are dreaming of greener pastures is likely that they've become unmotivated and disengaged. Despite efforts to communicate them, many workers don’t understand how their contributions fit into overall company goals and organizational objectives.
With a system that visualizes and tracks goal alignment, you can increase employee engagement by helping your people see how their efforts and work fit into the company as a whole. Goal alignment helps everyone from entry-level to C-Suite understand their place in the organization. Instead of feeling like a cog in the proverbial machine, employees can see exactly how their work brings value.
Reducing Employee Turnover < Goal-Based Recognition
Goal-based approaches to leadership can also help in ensuring you recognize the right people for a job well done. Employees want to feel like their contributions to the company are being recognized. By focusing on how individual employee and team goals contribute to an overall company strategy, you will see who is adding strategically to these goals, and be able to recognize the right people. According to John Bott, writing in his employee productivity piece in Inc:
Employees or personnel will be more motivated if they know what they are expected to achieve. Clearly stating goals or having a company vision provides guidance for everyone. Short-term goals, in particular, are effective in encouraging employees to properly manage their speed in doing tasks to meet targets. Additionally, it is important to provide feedback or show that employees are being supervised. Accomplishments should be acknowledged, while errors or failures in meeting targets should be promptly addressed. Good management practices can enhance and help maintain employee productivity.
This also helps to cut down on stressful and needless office politics. Keeping goals in view means people are staffed appropriately, and end up with credit for their hard work. After all the hard work your team has put into recruiting and hiring the best people, you can't afford to watch them walk out the door. Employee turnover isn't just costly -- it's also bad for employee engagement, morale, and productivity. Keeping your organization aligned with goals means more informed and motivated workers, which equals greater employee retention and lower employee turnover. As Josh Bersin, principal at Deloitte and founder of Bersin by Deloitte, spells out, the costs of employee turnover are increasingly high, as much as 1.5 to 2 times an employee's salary.
Are you ready to increase retention and productivity, decrease turnover and miscommunication and build an organization that has performance management down to an (actual) science? Try our goals module today. It’s part of our total talent management suite designed to help you source, recruit, interview, hire, manage and build your team.