Money Won't Buy You Love
That’s what you’ll find if you look around your organization, talk to your people or talk to your managers. Grade inflation, professional edition, is alive and well in your company. Solid performers are labeled "stars," based on merely being reliable, dependable and getting the work done on schedule and within specifications.
A recent BusinessWeek "Future of Work" poll highlights the trend toward narcissism: Ninety percent of surveyed managers counted themselves as being among the "top 10 percent of performers" within their respective companies. Imagine how downtrodden the other 10 percent must feel!
Most of the managers surveyed aren’t stars; neither are most employees. With luck and a little attention from you, the majority are actually solid, steady performers your company needs to get the daily work done. But they aren’t true stars, and subsequently, aren’t acute retention risks.
True stars (the real top 10 percent) are easy to spot but hard to keep. They’re not only productive, but innovate and create while getting the day-to-day work done. True stars also like to learn new things.
As a result, they usually have multiple self-directed, professional projects going on inside and outside the workplace. Add the recruiting twist that social networks like LinkedIn and Facebook bring to the mix, and you'll be lucky to keep the true stars on your payroll for the remainder of the year.
Forget money when focusing on how to retain stars. Your managers will tell you cash is king when seeking to retain top talent. It’s always part of the mix, but as an HR pro you'll never deliver enough money to keep the stars from moving across the street. Here’s why:
1. You are hopelessly constrained by your compensation guidelines. Face it: You aren’t set up politically to increase a star’s compensation enough to lock them in. Rare is the company with room to generate a 20 percent increase in pay without at least three required levels of approval that will kill the move to reward the star. The average nationwide merit increase for top performers is 5.7 percent. That won’t retain this group.
2. You like to treat everyone the same. For most HR managers, consistency is king. Treat everyone the same, and no one can say they left because of inequitable treatment. In talent management, stars get treated differently because their innovation and creativity produce different results. Keep treating everyone the same, and stars will look for a more capitalist venue where the producers rule.
3. You don’t make jobs for stars sexy enough. Stars are motivated by learning new things. Once they learn how to do the day-to-day grind, you have to throw additional content to keep them engaged and happy. Tie additional project work to an area they want to learn more about, or give them greater exposure in your company, and you have the formula for retention that transcends the need for additional cash.
4. The competition can buy your talent outright with a juicy promotion. The cold, hard reality in the talent game is that there is always a set of deeper pockets around the corner. Additionally, the company down the street isn’t constrained by merit increase guidelines. There’s never an easier time to spend what it takes than the offer stage for an external candidate. Advantage to your competition. With this realization in mind, your competition won’t think twice about packaging their opportunity as a promotion (even if it is a lateral move), including a 20 percent bump in base pay. Your stretch merit increase of 5 percent to 7 percent won’t fare well without the other intangibles in play.
But you don’t have to accept these limitations; you just have to think differently. Shower your star with occasional reminders they are different from the pack, and you can save your best talent. Here’s how:
1. Link at least 10 percent of the star’s job to learning something new. It doesn’t matter what it is, and you can further your advantage in this area by allowing the stars to determine their own paths based on your business challenges. This approach plays to the star’s capabilities to innovate and create and drips with the perception of your trust and confidence in the star. If the star ever looks around, ask them to inquire with the prospective employer if this type of development time is available with the prospective new job/company. The silence they’ll hear when asking that question turns the advantage back to you.
2. Figure out a way to mentor the star with someone cool. Find an informal mentor the star can learn from, and have them guide the developmental time outlined above. Meaningful professional relationships with informal mentors are often as effective as cash when it comes to retention.
3. Give them high-visibility projects and provide the necessary feedback. Stars like to have at least one project that has meaning beyond the daily grind. Find one for them and get them involved, providing developmental feedback beyond what they get in their normal gig. Recognizing them publicly for their contributions is also a savvy move in this area.
4. Do what you can on the compensation front. Cash isn’t enough to retain your stars, but you have to do the minimum. You may not be able to give the star a 20 percent boost, but be as aggressive as you can. Stars don’t need you to match dollar for dollar what they can find in the marketplace, but they need an honest effort.
Accept your compensation limitations and get the package of intangibles in place ASAP. Cash alone won’t cost you a star, but not treating them differently will cause them to walk.