How to Decrease Turnover and Increase Employee Retention

Here are five principles embraced by the world’s best-run companies that decrease turnover and increase employee retention.

Principle #1: Capture the Heart

Excellence is impossible with a disengaged heart. As Hal Rosenbluth, CEO of Rosenbluth Travel says, “The highest achievable level of service comes from the heart, so the company that reaches its people’s heart will provide the very best service.”

Companies such as The Walt Disney Corporation, ServiceMaster, and Southwest Airlines create compelling visions to capture the hearts of their employees. Marriott and Meredith Publishing help employees balance work and life demands. Others like Salem Sportswear and Ben and Jerry’s Homemade capture the heart of employees though celebration and injecting fun into the workplace.

Principle #2: Open Communication

Employees are more loyal if they feel “connected” to the company, if they are “in the loop”, and kept informed on key company issues. Most important, they need to know that their opinions matter and that management is 100% interested in their input.

Donnelly Corporation opens communication by placing huge posters throughout their facilities with ten questions for all employees to ask each other – question such as “What took to long today,” “What requires too many sign-offs,” and “What is just plain silly?” The headquarters accountants at Ameritech once eliminated over 6,000,000 pages of financial reports by simply traveling to each office, holding up one report at a time, and asking field managers, “Do you need this report?”

Principle #3: Create Partnerships

Today’s great companies go beyond treating workers as hired hands to creating vibrant partnerships will all levels of employee. Progressive companies like Chaparral Steel and Nucor Steel have eliminated time clocks and docking workers pay – both seen as “distrust” rather than trust systems. Springfield ReManufacturing, North American Tool and Die, and Lincoln Electric create partnerships via sharing all financial numbers with employees, and share the good times with the bad by having incentive bonuses structured for every worker.

Principle #4: Drive Learning

As a member of the first international management delegation to visit the former Soviet Union after the fall of communism, I learned a valuable lesson from a successful Russian entrepreneur. He told me that the key to business success is to “hone your skills to perfection and learn something new everyday.” The only long-term competitive advantage for any organization is the collective brainpower of its people.

Great companies like Johnsonville Foods promote lifelong learning through encouraging all employees to attend any training class they offer regardless of its direct applicability to their current job. At Cunningham Communications, all employees from receptionist to the President are required to read at least one hour of industry-specific material everyday.

Principle #5 – Emancipate Action

Today’s most profitable companies understand that to increase employee loyalty and retention, they must go beyond traditional empowerment programs that only allow people to “follow policy”. Rather, excellent companies emancipate the action of employees and give them the “freedom to succeed”.

Hewlett-Packard gives employees the freedom to fail ad try again through their operations principle: “We reserve the right to make mistakes.” MCI’s approach is not to shoot managers that make mistakes, but to shoot managers who do not take risks. Nordstrom’s legendary service stems from their one-rule personal manual that reads: “Rule #1: use your good judgement at all times. There will be no other rules.”

By integrating these five principles into your workplace, you will increase the loyalty and retention of your great employees.

*Adapted from the American Management Association’s best selling book, Getting Employees to Fall In Love With Your Company (AMACOM 1996) by Dr. Jim Harris. Getting Employees… is available in bookstores everywhere and online at AMAZON.com.

Dr. Jim Harris is a full time professional speaker who shares his cutting-edge research into “best people practices” with business and association audiences around the world.