Sunday, January 30, 2005

Job Satisfaction Impacts Retainment Capacity

We've all heard how keeping employees happy keeps employees on the payroll, and that job satisfaction includes thinks like being inclusive, open, appreciative, helping the employee see how his role fits into the larger organizational mission, providing opportunities for developing skills and following advancement paths, and so on.

Today I came across a quantitiative measure that shows the relationship between pay rate and the probablility of retention that I found very interesting because it presents the information in a way that every business leader can use as a litmus test to see which employees might be lost to a better offer.

W. Michael Kelly of the Saratoga Institute says, "The rule of thumb is that in a healthy job market an unhappy employee will bolt the company for a 5 percent pay increase, but it will take at least an increase of 20 percent to compel a satisfied employee to jump ship."

"Doing something" to show employees that they are valued is better than doing nothing. A thoughtful manager could spend time reviewing an employee's goals (or meeting to set those growth and achievement goals!), send a note of appreciation for a job well done, or appoint a high-potential staffer to lead a new project or initiative, among many other steps.

These things require clear thinking, prioritization, and follow-through, not a big budget, right? It's the strategic use of discretionary time.

What have you done lately to improve job satisfaction at your company?

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