Attracting and retaining top talent has been a business frustration for ages, now. Moreover, growing that talent into a high performing team is yet another puzzle. Turnover is severely expensive, creates massive gaps in a company’s supply chain, and can lead to more turnovers as a result of the additional stress placed on the system.
Some business models turn to incentive based structures to coax superior performance and better production; HOWEVER, this many times will backfire. Yet, when placed in conjunction with the right elements — talent becomes easy to get, easy to grow, and easy to keep!
Facts About Turnover
- Most incentive structures frequently backfire and stifle performance, quality, and production.
- On average, across all industries — companies experience about 15% turnover, annually.
- For a floor/staff level replacement, companies will spend upwards of 30% of the annual salary equivalent.
- For a supervisor or management level position, the costs balloon up to over 80% of the per annum full time equivalent (FTE).
- For a high level manager or c-suite officer, costs to replace such talent is well over 250% of the FTE per annum.
Balancing Intrinsic & Extrinsic Motivators
1. Culture of Excellence
Do not tolerate mediocrity. Giving employees rewards and recognitions for simply being is an unfortunate norm for most companies. While loyalty is important, it must be tempered with performance, engagement, contribution of value to the team. Sufficing minimal HR qualifiers one of the most dangerous status quo enemies of excellence.
2. Culture of Equitability
Be transparent. Make employees part of the process. After all Steve Jobs is known for saying, “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.”
3. Culture of Empowerment
Earn it. Give your team members full control over their futures — their destinies are literally in their own hands. Make expectations clearly defined in terms of how employees can grow in and upwards through an organization.
If you want learn more about the science of motivation and why performance based incentives many times backfires in truly detrimental ways, watch this: TED | Daniel Pink — The Puzzle of Motivation. You can also listen in the Therapy Insiders podcast episode with Daniel Pink, as our guest.