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Retaining Top Talent
Retaining top talent has always been a management challenge. It’s become even more so in our post-covid world where many employees who enjoyed the autonomy of remote work arrangements are suddenly faced return to office mandates.
For employees it feels unfair when the work is going fine. Yet those employee perceptions clashed directly with the management’s view of “Hey, we make the rules around here.”
When that happens, for employees it begs the questions: Do I stay? Or do I go?
What You’ll Discover About Retaining Top Talent:
* The role of the implied social contract in retaining top talent
* What the covenants of good faith and fair dealing have to do with retaining top talent
* What good faith and fair dealing means in the workplace
* How the implied social contract legitimizes employee expectations of workplace fairness
* And much more.
Host Hanna Hasl-Kelchner
Hanna Hasl-Kelchner is a champion for fairness in the workplace. She helps organizations gain clarity to make more informed decisions by reducing complex concepts into sensible, bite size pieces. Hanna accomplishes this as a business strategist and through her writing, speaking, consulting, and popular syndicated podcast, Business Confidential Now.
Hanna brings a unique perspective to the table, growing up in an entrepreneurial family and running a business before age 30 and blending it with decades practicing business law. Those experiences enabled her to successfully bridge the gap between the two disciplines during her career as a trusted advisor to influential decision makers ranging from startups to the S&P 500, Big Tobacco, and the White House. She has also been on the faculty at two top-ranked MBA programs: The Duke University Fuqua School of Management and the University of Virginia, Darden School of Business.
Related Resources:
If you liked this interview, you might also enjoy our other Leadership and Management episodes.
Contact Hanna and connect with her on LinkedIn, Facebook, Twitter, and YouTube.
Her new book Seeking Fairness at Work is available wherever books are sold starting April 18, 2024.
Part 1: Unveiling the Truth: Workplace Fairness Myths vs Reality
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The Key to Retaining Top Talent: A Fair Work Environment
Retaining top talent has always been a management challenge and has become even more so in our post-Covid world, where many employees who enjoy the autonomy of remote work arrangements are suddenly faced with return to office mandates. For employees, it feels unfair when the work is going fine.
Yet those employee perceptions clash directly with management’s view of “Hey, we make the rules around here.” And for employees, it begs the question of do I stay or do I go?
This is Business Confidential Now with Hanna Hasl-Kelchner helping you see business issues hiding in plain view that matter to your bottom line.
Welcome to Business Confidential Now, the podcast for smart executives, managers and entrepreneurs looking to improve business performance and their bottom line. I’m your host, Hanna Hasl-Kelchner. Today we’re going to continue with part two of the five part sneak preview of my new book, Seeking Fairness at Work Cracking the New Code of Greater Employee Engagement, Retention, and Satisfaction.
Last week, in part one, Unveiling the Truth, I explained how fairness is not an unreasonable expectation, how it’s a universal human value that transcends cultures around the world, and that as children, we understand it implicitly. When playing a new game, we want to know how and when others don’t follow the rules. We’re not above calling out the unfairness and even calling them cheaters when it gets to be too much. We take our ball home, real simple.
In the workplace, we’re typically more restrained, but the ability to recognize unfairness and experience it never leaves us. We know it when we see it. Last week, we also talked about the implied social contract that exists in the employee employer relationship and indeed all relationships. How it’s a fundamental mistake to ignore the human social aspect of workplace relationships and treat it as a purely transactional one.
The social contract represents the expectations we bring to the relationship of how we believe things should work. And since those expectations are not discussed and certainly not written down, they’re implied. They rarely get talked about until something drastically goes wrong. And then we should on each other. Oh, you should have done this and that and oh, you should have told me. And we’re off to the races.
Sure. In the workplace, work product gets discussed. We need such and such project done by this date. So many new customer orders this month, and so forth. But a lot of important issues fall between the cracks, such as how we talk to each other, reasonable recognition, respect, innovation, loyalty, and a host of other things that are important to each of us, whether we’re employees or managers.
Today, we’re going to pick up the discussion to answer why employees have any reasonable expectations of fairness beyond what management is willing to give them. In other words, what right do they have to expect fairness when management gets to set the rules?
That’s not only a great question, it’s pivotal in establishing who’s responsible for what in the workplace relationship, especially if you’re interested in retaining top talent because like the kids on the playground, they’re not going to stick around if the playing field is unfair.
As a practical matter, retaining top talent is fundamentally no different than retaining the rest of your workforce. The big difference is it can hurt more when a top performer leaves. Retaining top talent is therefore important, you know that. So getting back to why top talent or any of your workforce talent has a reasonable expectation of fairness. It’s important to remember the implied social contract that exists by virtue of the employee employer relationship. It’s the unspoken duty to work together, right?
Okay, good. What many people don’t realize is that every agreement carries with it an inescapable obligation of good faith and fair dealing, even implied agreements. These are covenants. Now, this legalese basically means both parties need to play nice. The parties need to be faithful to the scope and purpose of the terms of the employee employer relationship. Another way to think of it is sticking to community standards of decency, fairness or reasonableness.
Now these are obligations that cannot be waived. They can’t be ignored. So in a nutshell, fairness is about acting in good faith and fair dealing. There are standards. It’s not subjective.
Now, as a quick aside, please don’t confuse this good faith covenant with the duty of good faith in fiduciary relationships. It’s different. A fiduciary is required to put the best interests of the beneficiary first. You’ll find that duty in relationships between attorneys and their clients, between guardians and their wards.
That’s not the case in an employee employer arrangement. Even though workers receive compensation, they’re not beneficiaries in a legal sense. In a legal definition. What that means for employers is that they’re not required to put employee best interests first. But that doesn’t mean those interests should be ignored. You’d be stepping on a huge banana peel if you do.
What good faith in the employee employer relationship does require is honesty in the social contracts performance. Good faith is about honest compensation and safe working conditions. Taking advantage of employees by shortchanging these needs is not only unfair, it’s also highly demotivating and diminishes trust. Another way to think about the covenant of good faith is how it corresponds with our most basic human motivational needs that were identified by Abraham Maslow in his 1943 paper, A Theory of Human Motivation.
Maslow says, we’re motivated at the most basic human level to secure our physical safety and our physiological needs of food, water, and shelter. The necessity to meet those basic needs ties directly to the need for honest compensation and safe working conditions, so we’re able to satisfy those physiological needs. That’s why it’s so demotivating when working conditions fall short on this front. And it should come as no surprise to management that employee satisfaction and engagement goes down. It’s really pretty simple.
The findings of Maslow’s seminal paper, also they’re called Maslow’s Hierarchy of Human Motivational needs, is a roadmap of performance incentives that dovetails with the covenants of good faith and fair dealing. When you look at them side by side, they’re highly instructive on how to boost employee engagement. Maslow’s basic needs of physical safety and the ability to have adequate food, water, and shelter are the equivalent of employees minimum expectations, and they equate to minimum employee engagement. Right? It’s the bare needs.
But remember, there’s two obligations under every contract, including the implied social contract. Good faith is just one of them. The second is the covenant of fair dealing. And that’s about management providing reasonable support to employees so they can do their jobs. In Maslow’s world, fair dealing translates into meeting employees psychological needs of esteem and belonging. It’s one step up from those basic needs in terms of motivation.
Research from BetterUp Labs, for example, confirms that a sense of belonging is both motivational for employees and financially rewarding for employers. It’s research revealed that if a 10,000 employee workforce experienced a high degree of belonging, it would correlate to an annual increased productivity of more than $52 million.
Okay, so maybe you don’t have that many employees and the benefit is proportionately less. But let’s not forget that the operational word is benefit.
The same study found that when employees experienced exclusion, they participate less. Now you may have sense that that’s happening, but now you know why. It’s because something in the area of esteem and sense of belonging is missing for them. People are feeling excluded or less than and they pull back.
That kind of diminished collaboration is really not a surprise. After all, if someone feels isolated, are they the first to raise their hand and volunteer for a new idea? Do they jump in and advance a conversation? Of course not. They’re too afraid of taking that risk because they’ve already been treated as other.
BetterUp labs also discovered in their study that employees who did not have a sense of belonging at work suffered from a 158% more anxiety and depression, 109% more burnout, and 77% more stress than their more engaged peers. With mental health being more openly discussed. And in the past, such findings don’t bode well for organizations that don’t take belonging seriously.
So for executives, managers and entrepreneurs interested in retaining top talent and improving workforce retention rates, it pays to remember that even the implied social contract that is foundational to the employee employer relationship carries an obligation of good faith and fair dealing.
Those covenants are intrinsic to the very nature of a relationship, and they legitimize employees expectations, even though management has the power to make the rules. So when those basic human values get trampled, they’ll be recognized for what they are and they result in lower engagement. That’s why a fair work environment is the key to retaining top talent, as well as the rest of your workforce.
To gain a deeper understanding of low employee engagement and why it manifests in the workplace, next week, in the third episode of this five part series on workplace fairness and engagement, I’ll explain why the terms low employee engagement is misleading. Stay tuned.
But in the meantime, thanks so much for listening today. A transcript of this episode can be found in the show notes at BusinessConfidentialRadio.com. If you missed part one of this series, a link to that is also going to be in the show notes.
For a lot more on this topic, including a five part strategy for greater employee engagement, retention, and satisfaction. My new book, Seeking Fairness at Work, will be available starting April 18th, so circle your calendar now.
If you found today’s episode thought provoking, please be sure to tell your friends, share a link and leave a positive review. I’ll be back next week with part three. Until then, have a great day and an even better tomorrow.
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