Employee Retention Engagement and Careers

320 PART 1 INTRODUCTION
10
Employee Retention,
Engagement, and Careers
Source: Steven Senne/AP Images.
LEARNING OBJECTIVES Company s
1. Describe a comprehensive approach to retaining Strategic Goals
employees.
2. Explain why employee engagement is important, and
how to foster such engagement.
3. Discuss what employers and supervisors can do to
support employees career development needs. Employee Competencies
and Behaviors Required
4. List and discuss the four steps in effectively coaching for Company to Achieve
an employee. These Strategic Goals
5. List the main decisions employers should address in
reaching promotion decisions.
Training and
opment
Devel
I
BM celebrated its centenary in 2011, marking 100 years
since Charles Flint founded it to provide punch card
Co
Placem t and
mp
tabulating machines for making business computations.1
ent
Recruitmen
ensa
Staying in business that many years is a feat shared by few
HR Policies and Practices
tion
companies. Most credit IBM s ability to adapt to changing Required to Produce
customer needs for its longevity. Today, IBM faces a new Employee Competencies
threat. Technology is changing so fast that IBM will soon and Behaviors
need a workforce with dramatically different skills than its
l
Le t
m
ga
Re m
l
en
workforce has now. What should it do to build that new work- dn noriv ita
sno olp
E
force, and to retain the employees it needs to move ahead? a c nE
iget
artS eey
WHERE ARE WE NOW . . .

Having invested time and resources in
selecting, training, and appraising
employees, the employer naturally wants
its employees to stay with the firm.
Unfortunately, keeping good employees can
be challenging. The main purpose of this
chapter is to help you be more effective
at improving employee retention,
engagement, and careers. The main topics
we ll address include employee retention,
employee engagement, career development,
coaching employees, and promotions.
Access a host of interactive learning aids at

www.mymanagementlab.com to help strengthen
your understanding of the chapter concepts.
MyManagementLab 321
322 PART 3 TRAINING AND DEVELOPMENT
MANAGING EMPLOYEE TURNOVER

AND RETENTION
Turnover the rate at which employees leave the firm varies markedly among industries.
For example, turnover in the accommodation and food services industry is chronically
high, with over half the industry s employees voluntarily leaving each year. In contrast,
voluntary turnover in educational services is about 12%.2
Furthermore, such figures only reflect employees who leave voluntarily, such as for
better jobs or for retirement. They do not include involuntary separations, such as those
due to poor performance, disability, or corporate downsizings.3 Combining voluntary
and involuntary turnover produces some astounding statistics. For example, the turnover
in many food service organizations is around 100% per year. This means that (other
things equal) many restaurants need to replace just about all their employees every year.
Costs of Turnover
The costs to employers of turnover are high.4 The accompanying HR as a Profit Center
feature illustrates this.
HR AS A PROFIT CENTER
A research team analyzed the tangible and intangible costs of turnover in a call
center with 31 agents and 4 supervisors.5 Tangible costs associated with an agent s
leaving included, for instance, the costs of recruiting, screening, interviewing, and
testing applicants, as well as the cost of wages while the new agent was oriented
and trained. Intangible costs included the cost of lost productivity for the new
agent (who is less productive at first than his or her predecessor), the cost of rework
for errors the new agent makes, and the supervisory cost for coaching the new
agent. For this call center, the researchers mathematical model estimated the cost
of an agent leaving at about $21,551. This call center averaged 18.6 vacancies per
year (about a 60% turnover rate). Therefore, the researchers estimated the total
annual cost of agent turnover at $400,853. Taking steps to cut this turnover rate in,
say, half could save this firm about $200,000 per year.
Reducing turnover requires identifying and managing the reasons for both
voluntary and involuntary turnover. We address managing voluntary turnover here,
and managing involuntary turnover in Chapter 14 (ethics and fair treatment).
Managing Voluntary Turnover

Managing voluntary turnover requires identifying its causes and then addressing
them. Unfortunately, identifying why employees voluntarily leave is easier said
than done. People who are dissatisfied with their jobs are more likely to leave,
but the sources of dissatisfaction are many and varied. Figure 10-1 provides an
example. 6 The consultants collected survey data from 262 U.S. organizations
having a minimum of 1,000 employees. In this survey, the five top reasons high
commitment/top-performing employees gave for leaving (ranked from high to
low) were pay, promotional opportunities, work life balance, career development,
and health care benefits. In contrast, employers ranked the top five reasons employ-
ees left as promotion, career development, pay, relationship with supervisor, and
work life balance. Other reasons employees voluntarily leave include unfairness, not
having their voices heard, and a lack of recognition.7 Sometimes simply asking,
All things considered, how satisfied are you with your job? can be as effective as
soliciting employees attitudes toward various facets of the job (such as supervision
and pay).8 Practical considerations affect turnover. For example, high unemployment
reduces voluntary turnover, and some locales have fewer job opportunities (and
thus turnover) than do others.
CHAPTER 10 EMPLOYEE RETENTION, ENGAGEMENT, AND CAREERS 323
FIGURE 10-1 Reasons

Top-Performing Employees
Leave an Organization
Source: www.worldatwork.org/
waw/adimLink?id=17180, accessed
April 3, 2011.
Of course, turnover isn t necessarily bad. For example, losing low-performing

employees isn t as problematical as losing high-performing ones. Some firms, such as
the restaurant chain Applebee s, even incentivize their managers differentially, with
higher incentives for reducing turnover among top-performing employees.9
Retention Strategies for Reducing Voluntary Turnover

In any case, given the variety of things prompting employees to leave voluntarily, what
can one do to manage voluntary turnover? There is no silver bullet. The manager should
understand that retaining employees is a talent management issue, and that the best
retention strategies are therefore multifunctional. For example, employees who aren t
interested in their jobs, sense that they re not suited for their jobs, or who feel undercom-
pensated are more likely to leave. Employers can only address such issues by instituting
effective and comprehensive talent management (recruitment, selection, training,
appraisal, and compensation) practices. Put another way, turnovers (both voluntary
and involuntary) often start with poor selection decisions, compounded by inadequate
training, insensitive appraisals, and inequitable pay. Therefore trying to formulate a
retention strategy without considering all of one s HR practices is generally futile.
Identifying the issues is an important first step in any retention strategy. As we ll
explain in Chapter 14, effectively conducted exit interviews provide useful insights
into potential turnover problem areas. Many employers routinely administer attitude
surveys to monitor employees feelings about matters such as supervision and pay.
Open door policies and anonymous hotlines help management identify and remedy
morale problems before they get out of hand. Sometimes, analyzing the situation
leads to simple solutions. For example, Walmart discovered it could significantly
reduce voluntary turnover by providing aggressively realistic previews about the job s
demands and work hours. Then, having identified potential problems, the employer
can take steps like the following to boost employee retention.
1 Describe a comprehensive
A Comprehensive Approach to Retaining Employees
approach to retaining Experts from the consulting company Development Dimensions International (DDI)
employees. and the employment firm Robert Half International suggest building comprehensive
retention programs around the following steps.
Selection. Retention starts up front, in the selection and hiring of the right
employees. 10 Selection refers not just to the worker but to choosing the right
supervisors as well. For example, FedEx conducts periodic employee attitude
surveys. The supervisor then meets to review the results with his or her
employees to address any problems the surveys raise.
Professional growth. Inadequate career and professional development prospects
prompt many employees to leave. Conversely, a well-thought-out training and
career development program can provide a strong incentive for staying with the
company. As one expert says, professionals who feel their company cares
about their development and progress are much more likely to stay. 11 The
accompanying Strategic Context feature illustrates this, and we also address
career development later in the chapter.
Provide career direction. Periodically discuss with employees their career
preferences and prospects at your firm, and help them lay out potential career
plans. Furthermore, don t wait until performance reviews to remind top
employees how valuable they are to your company. 12
Meaningful work and ownership of goals. People can t do their jobs if they
don t know what to do or what their goals are. Therefore, an important part
of retaining employees is making it clear what your expectations are regarding
their performance and what their responsibilities are.
Recognition and rewards. We ve seen that in addition to pay and benefits,
employees need and appreciate recognition for a job well done.
Culture and environment. For example, companies that are very tense and
political may prompt employees to leave, while companies that make them
feel comfortable encourage them to stay.
Promote work life balance. In one survey conducted by Robert Half and
careerbuilder.com, workers identified flexible work arrangements and
telecommuting as the two top benefits that would encourage them to
choose one job or another.
Acknowledge achievements. When employees feel underappreciated,
they re more likely to leave. Surveys suggest that frequent recognition
of accomplishments is an effective nonmonetary reward.
THE STRATEGIC CONTEXT

IBM Aims for Flexibility
Technological change is occurring so fast that IBM will soon need a workforce with
dramatically different skills than its workforce has now, one capable of reacting to
customers changing needs on demand. IBM could, of course, merely size up its
employees periodically and let go those who don t measure up. Instead, IBM
chose to put in place an on-demand staffing strategy. This aims to ensure that its
current employees get the training and coaching they need to play roles in IBM s
future.13 To do this, IBM budgeted $700 million per year to identify needed skills,
spot gaps for skills that are in short supply, and to train and assess its executives,
managers, and rank-and-file employees. IBM s on-demand staffing effort is having
at least two big effects. It is supporting IBM s strategy, which depends on being
able to offer the fast-evolving technological services its customers need, at once,
on demand. The staffing program is also improving employee retention, by
minimizing the layoffs and resignations that might occur if employees skill sets
were inconsistent with IBM s needs.
Managing Involuntary Turnover

We discuss involuntary turnover in Chapter 14, but several points are pertinent here.
Involuntary turnovers are inevitable. Even under the best conditions, the employer
will have to let some employers go when jobs are restructured, or when competitive
pressures necessitate reductions in force. However, dismissals due to poor perform-
ance are sometimes avoidable. As with voluntary turnover, performance-based
dismissals may stem from breakdowns in the employer s talent management system.
Therefore, here, too, reviewing and improving one s recruitment, selection, training,
appraisal, and compensation/incentive plans can reduce dismissals by addressing
the reasons for poor performance. We discuss strategies for managing involuntary
turnover in Chapter 14.
Talent Management and Employee Retention

All employees are important, but as we explained earlier in this book, talent
management oriented employers put special emphasis on developing and retaining
their most critical employees. For example, we saw that Accenture uses a 4 * 4
strategic role assessment matrix. It plots employees by performance and by
value to the organization. Accenture then ties pay, development, dismissal, and
other personnel decisions to each employee s position in the matrix. Compass
Group identifies top performers, and then assesses them for promotability and
leadership potential. Shell China appoints career stewards to meet regularly with
emerging leaders. Novartis China uses a checklist to assess the attitudes of its most
mission-critical employees. The point is that taking a talent management approach to
retaining employees suggests focusing augmented retention efforts on the company s
most important employees.
Job Withdrawal
Unfortunately, voluntary turnover is just one way that employees withdraw.
Withdrawal in general means separating oneself from one s current situation it s a
means of escape for someone who is dissatisfied or fearful. At work, job withdrawal has
been defined as actions intended to place physical or psychological distance between
employees and their work environments. 14
Poor attendance and voluntary turnover are two job withdrawal examples. Other
types of job withdrawal can be less obvious if no less corrosive. Some examples
include taking undeserved work breaks, spending time in idle conversation and
neglecting aspects of the job one is obligated to perform. 15 Other employees stop
showing up mentally ( psychological withdrawal ), perhaps daydreaming at their
desks while productivity suffers.16 The employee is there, but mentally absent. In fact,
the job withdrawal process tends to be incremental, often evolving from daydreaming
to absences to quitting: [W]hen an employee perceives that temporary withdrawal
will not resolve his/her problems, then the employee is apt to choose a more perma-
nent form of withdrawal (i.e., turnover, assuming that alternative work opportunities
are available). 17
DEALING WITH JOB WITHDRAWAL Studies confirm the high costs of job
withdrawal behavior, so understanding its causes is important.18 Because many people
have experienced the desire to withdraw to get away from some situation
it s perhaps not difficult to empathize with those who feel they must escape. The
simplest way to think about it is in terms of pain versus pleasure. People tend to
move toward situations that make them feel good, and move away from those that
make them feel bad. More technically, negative emotional states make people
aware that their current situation is problematic, and this awareness motivates
them to take action. 19 People are repelled by situations that produce unpleasant,
uncomfortable emotions, and are attracted to those that produce pleasant,
comfortable ones.20 The point is that the more negative and less positive the person s
mood about a situation, the more likely he or she will try to avoid or withdraw from
the situation.21
The manager can therefore think of withdrawal-reducing strategies in terms of
reducing the job s negative effects, and/or of raising its positive effects. Because poten-
tial negatives and positives are virtually limitless, addressing withdrawal problems
again requires a comprehensive human resource management approach. Illustrative
potential negatives include, for instance, boring jobs, poor supervision, low pay,
bullying, lack of career prospects, and poor working conditions. Potential positives
include job enrichment, supportive supervision, equitable pay/family-friendly
benefits, disciplinary/appeals processes, career development opportunities, safe and
healthy working conditions, and having high-morale colleagues.22 Interviews, surveys,
and observation can help identify issues to address.
EMPLOYEE ENGAGEMENT
Poor attendance, voluntary turnover, and psychological withdrawal often also reflect
diminished employee engagement. Engagement refers to being psychologically involved
in, connected to, and committed to getting one s jobs done.
2 Explain why employee

Why Engagement Is Important
engagement is important, Employee engagement is an important topic, because many employee behaviors,
and how to foster such including turnover, reflect the degree to which employees are engaged. For example,
engagement. based on surveys by the Gallup organization, business units with the highest levels of
employee engagement have an 83% chance of performing above the company
median, while those with the lowest employee engagement have only a 17% chance of
performing better than the company median.23 A survey by consultants Watson
Wyatt Worldwide concluded that companies with highly engaged employees have
26% higher revenue per employee.24 The director of recruiting at the nonprofit Fair
Trade USA believes boosting engagement helps to explain the firm s subsequent 10%
drop in turnover. A recent Harvard Business Review article notes that when it comes
to customer service, satisfied employees aren t enough. Instead, Employees should be
engaged by providing them with reasons and methods to satisfy customers and then
rewarded for appropriate behavior. 25 Yet studies, including one from the consulting
firm TowersPerrin, concluded that only about 21% of the global workforce is
engaged, while almost 40% is disengaged.26
Actions That Foster Engagement

The same TowersPerrin findings illustrate the sorts of managerial actions that can
foster employee engagement. Figure 10-2 summarizes these findings.27 Engagement-
supporting actions include making sure employees (1) understand how their depart-
ments contribute to the company s success, (2) see how their own efforts contribute
to achieving the company s goals, and (3) get a sense of accomplishment from working
at the firm.
Monitoring Employee Engagement

Monitoring employee engagement needn t be complicated. With about 180,000
employees worldwide, the consulting firm Accenture uses a three-part shorthand
method they call say, stay, and strive to identify which employees are engaged, and
why. First, Accenture assesses the employee s pride in being with the organization
in terms of how positively he or she speaks about the company and recommends it
to others. Second, it looks at who stays with a company, and why. Finally, it looks
at strive. For instance, do employees take an active role in the overall success of the
organization by moving beyond just doing tasks to going above and beyond? 28
FIGURE 10-2 Employer

Actions that Make Employees
Feel More Engaged
Source: Working Today:

Understanding What Drives Employee
Engagement, www.towersperrin.
com/tp/getwebcachedoc?webc=
hrs/usa/2003/200309/talent_2003.pdf,
accessed April 3, 2011.
CAREER MANAGEMENT
Career development plays an important role in engaging and retaining employees. For
example, a survey by the human resource management consulting firm Mercer found
that as of 2010, employers planned to focus both on money and on career development
to retain and engage the right talent.29 One observer similarly says that rather than
focusing on incentives and perks to entice and retain employees, organizations . . .
will hold onto the most talented workers . . . by offering them a range of professional
experiences, broad functional and geographic exposure within the organization,
and more targeted leadership opportunities. 30 These experiences become part of the
employer s total rewards package.
Employers, not just employees, therefore benefit from offering employees career
development support. The employees, armed with better insights about their occupa-
tional strengths, should be better equipped to serve the company.31 Supporting your
employees career development may also boost employee engagement and support
your recruitment and retention efforts. As one expert said, The most attractive
proposition an employer can make today is that in 5 years the employee will have
more knowledge and be more employable than now. That should be the acid test
for any career development program. 32
Careers Terminology
We may define career as the occupational positions a person holds over the years.
Career management is a process for enabling employees to better understand and
develop their career skills and interests and to use these skills and interests
most effectively both within the company and after they leave the firm. Career
development is the lifelong series of activities (such as workshops) that contribute
career career management career development

The occupational positions a person has had The process for enabling employees to better The lifelong series of activities that
over many years. understand and develop their career skills contribute to a person s career exploration,
and interests, and to use these skills and establishment, success, and fulfillment.
interests more effectively.
to a person s career exploration, establishment, success, and fulfillment. Career

planning is the deliberate process through which someone becomes aware of
personal skills, interests, knowledge, motivations, and other characteristics; acquires
information about opportunities and choices; identifies career-related goals; and
establishes action plans to attain specific goals.
We ll see that the employee s manager and employer should play roles in guiding
and developing the employee s career. However, the employee must always accept full
responsibility for his or her own career development and career success.
Careers Today
People once viewed careers as a sort of upward stairway from job to job, more often
than not with one or at most a few firms. Today, recessions, mergers, outsourcing,
consolidations, and more or less endless downsizings have changed the rules. Many
people do still move up from job to job. But more often employees find themselves
having to reinvent themselves. For example, the sales rep, laid off by a publishing firm
that s just merged, may reinvent her career as an account executive at a media-
oriented advertising firm.33
Careers today differ in other ways from a few years ago. With more women pursuing
professional and managerial careers, families must balance the challenges associated with
dual career pressures. At the same time, what people want from their careers seems to be
changing. Baby boomers those retiring in the next few years tended to be job- and
employer-focused. People entering the job market now often value work arrangements
that provide more opportunities for balanced work family lives.
Psychological Contract
One implication is that what employers and employees expect from each other
is changing. What the employer and employee expect of each other is part of what
psychologists call a psychological contract. This is an unwritten agreement that exists
between employers and employees. 34 The psychological contract identifies each
party s mutual expectations. For example, the unstated agreement is that manage-
ment will treat employees fairly and provide satisfactory work conditions, hopefully
in a long-term relationship. Employees are expected to respond by demonstrating a
good attitude, following directions, and showing loyalty to the organization. 35
But with today s tumultuous labor markets, neither the employer nor the
employee can count on long term commitments from each other. That fact changes
the terms of the psychological contract, and makes career management even more
critical for the employee.
The Employee s Role in Career Management

The employer and manager have roles in guiding employees careers, but particularly in
today s environment, no employee should ever abandon this task to others. For the
employee, career planning means matching individual strengths and weaknesses with
occupational opportunities and threats. In other words, the person wants to pursue
occupations, jobs, and a career that capitalize on his or her interests, aptitudes, values,
and skills. He or she also wants to choose occupations, jobs, and a career that make sense
in terms of projected future demand for various types of occupations. The consequences
of a bad choice (or of no choice) are too severe to leave to others. There is a wealth
of sources to turn to.
As one example, career-counseling expert John Holland says that personality
(including values, motives, and needs) is one career choice determinant. For example,
a person with a strong social orientation might be attracted to careers that entail
interpersonal rather than intellectual or physical activities and to occupations such as
social work. Holland found six basic personality types or orientations. Individuals
can use his Self-Directed Search (SDS) test (available online at www.self-directed-
search.com) to assess their occupational orientations and preferred occupations.
The SDS has an excellent reputation, but the career seeker needs to be wary of some
of the other online career assessment sites. One study of 24 no-cost online career assess-
ment Web sites concluded that they were easy to use, but suffered from insufficient vali-
dation and confidentiality. However, a number of online career assessment instruments
such as Career Key (www.careerkey.org) do reportedly provide validated and useful
information.36 O*Net offers a free comprehensive online My Next Move occupations
and career assessment system (http://www.onetcenter.org/mynextmove.html). You will
find other examples at Workday.com, and in the following exercises.
EXERCISE 1 One useful exercise for identifying occupational skills is to head a

page The School or Occupational Tasks I Was Best At. Then write a short essay
describing the tasks. Provide as much detail as you can about your duties and respon-
sibilities, and what you found enjoyable about each task. (It s not necessarily the most
enjoyable job you ve had, but the most enjoyable task you ve had to perform within
your jobs.) Next, on other pages, do the same thing for two other tasks you ve had.
Now scrutinize the three essays. Underline the skills that you mentioned the most
often. For example, did you especially enjoy the hours you spent in the library doing
research for your boss when you worked one summer as an office clerk?37
EXERCISE 2 Another exercise can prove enlightening. On a page, answer the

question: If you could have any kind of job, what would it be? Invent your own job
if need be, and don t worry about what you can do just what you want to do.38
career planning
The deliberate process through which
someone becomes aware of personal skills,
interests, knowledge, motivations, and other
characteristics and establishes action plans
to attain specific goals.
3 Discuss what employers and

The Employer s Role in Career Management
supervisors can do to sup- The employer s career development tasks depend partly on how long the employee has
port employees career been with the firm. For example, before hiring, realistic job interviews can help prospec-
development needs. tive employees more accurately gauge whether the job is a good fit with the candidate s
skills and interests.
Especially for recent college graduates, the first job can be crucial for building con-
fidence and a more realistic picture of what he or she can and cannot do: Providing
challenging first jobs (rather than relegating new employees to jobs where they can t
do any harm ) and having an experienced mentor who can help the person learn the
ropes are important. Some refer to this as preventing reality shock, a phenomenon
that occurs when a new employee s high expectations and enthusiasm confront the
reality of a boring, unchallenging job.
After the person has been on the job for a while, new employer career-management
roles arise. Career-oriented appraisals in which the manager is trained not just to
appraise the employee but also to match the person s strengths and weaknesses with a
feasible career path and required development work is one important step. Similarly,
providing periodic job rotation can help the person develop a more realistic picture of
what he or she is (and is not) good at, and thus the sort of future career moves that
might be best.
Career Management Systems

Most employers aren t inclined to provide a wide range of expensive career develop-
ment options. However, career development systems needn t be complicated. Even just
receiving performance feedback from supervisors, having individual development
plans, and having access to training is enough for most employees. Beyond that, job
postings, formal career-oriented performance appraisals, career development centers,
formal counseling and mentoring with managers, and individual succession planning
for high-potential employees are valuable career development tools.39 Yet only about a
fourth of the respondents in one survey even had individual development plans.40
Figure 10-3 illustrates a simple employee career planning form.41
CAREER CENTERS Other systems are more comprehensive. Some employers create
Web-based or offline libraries of career development materials, plus career workshops,
workshops on related topics (such as time management), and individual career coaches
for career guidance. First USA Bank has its Opportunity Knocks program. Its aim is
to help employees crystallize their career goals and achieve them within the company.
In addition to career development training and follow-up support, the program includes
career development centers at work sites that employees use on company time. The latter
contain materials such as career assessment and planning tools.42
CAREER PLANNING WORKSHOPS A career planning workshop is a planned

learning event in which participants are expected to be actively involved, completing
career planning exercises and inventories and participating in career skills practice
sessions. 43 A typical workshop includes self-assessment exercises (skills, interests,
values, and so on), an assessment of important occupational trends, and goal-setting
and action-planning segments.
LIFELONG LEARNING BUDGETS As we explained in Chapter 8 (Training),

several employers provide 401(k)-type lifelong learning accounts for their employees.
Both employers and employees contribute, and the employees can tap into these to
get the career-related education and development they desire.44
PROVIDE CAREER COACHES For example, Allmerica Financial Corp. hired

20 career development coaches to assist its 850-person information technology staff.
The coaches helped individual employees identify their development needs and
obtain the training, professional development, and networking opportunities that
they require to satisfy those needs.45
FIGURE 10-3 Employee

Career Development Plan
Employee Career Development Plan
Source: Reprinted from
www.HR.BLR.com with permission Employee: Position:
of the publisher Business and Legal
Resources, Inc., 141 Mill Rock Road Manager: Department:
East, Old Saybrook, CT © 2004. BLR®
(Business and Legal Resources, Inc.). Date of Appraisal:
1. What is the next logical step up for this employee, and when do
you think he or she will be ready for it?
When Ready:
Probable Next Job:
Now 6 Months 1 Year 2 Years
1.
2.
3.
2. What is the highest probable promotion within five years?
3. What does this employee need to prepare for promotion?
Knowledge:
Action Plan:
Still Training:
Action Plan:
Management Training:
Action Plan:
Career coaches generally help employees create 1- to 5-year plans showing where
their careers with the firm may lead. Then, the employer and employee base the latter s
development plans on what he or she will need to move up.46
OFFER ONLINE PROGRAMS For example, WorkforceVision from Criterion,
Inc., supplies online systems that help the employer analyze an employee s training
needs. Clicking on the employee s name launches his or her work history, competencies,
career path, and other information. For each competency (such as leadership and
customer focus), a bar chart graphically shows a gap analysis highlighting the person s
strengths and weaknesses. The firm can then organize developmental activities around
the person s needs.47
CAREER-ORIENTED APPRAISALS In brief, if you use the performance review
only to tell the employee how he or she is doing, you ll miss an opportunity to
support the employee s career development. Performance appraisals also provide an
reality shock
Results of a period that may occur at the initial
career entry when the new employee s high
job expectations confront the reality of a
boring or otherwise unattractive work situation.
opportunity to discuss and link the employee s performance, career interests, and
developmental needs into a coherent career plan.
Many employers have formal programs to do this. For example, JCPenney s
managerial performance appraisal form contains a listing of all jobs by title, function,
and level that employees could conceivably want to consider. The company trains its
supervisors to link the employee s performance, career interests, and corporate needs,
and develop a career plan including development activities for the employee.
However, even a simple form like the one shown in Figure 10-4 can suffice. The
main thing is to help the manager and employee translate the latter s performance-based
FIGURE 10-4 Sample experiences for the year into tangible development plans and goals.
Performance Review
Development Plan
Gender Issues in Career Development
Source: Reprinted from Women and men face different challenges as they advance through their careers. In one
www.HR.BLR.com with permission
of the publisher Business and Legal study, promoted women had to receive higher performance ratings than promoted
Resources, Inc., 141 Mill Rock Road men to get promoted, suggesting that women were held to stricter standards for
East, Old Saybrook, CT © 2004. promotion. 48 Women report greater barriers (such as being excluded from informal
BLR® (Business and Legal
Resources, Inc.).
A. Employee s Major Strengths

1.
2.
3.
B. Areas for Improvement/Development
1.
2.
3.
C. Development Plans: Areas for Development
1.
2.
3.
4.
Development Strategy:
D. Employee s Comments on This Review:
E. Reviewer s Comments:
Growth potential in present position and future growth potential for increased
responsibilities:
Employer s Signature: Date:

Reviewer s Signature: Date:
Reviewer s Manager s Signature: Date:
networks) than do men, and more difficulty getting developmental assignments and
geographic mobility opportunities. Women have to be more proactive than men just to
be considered for such assignments, and employers therefore need to focus on breaking
down the barriers that impede women s career progress. One study concluded that three
corporate career development activities fast-track programs, individual career coun-
seling, and career planning workshops were less available to women than to men.49
Many call this combination of subtle and not-so-subtle barriers to women s progress the
glass ceiling. Because developmental experiences like these are so important, organiza-
tions that are interested in helping female managers advance should focus on breaking
down barriers that interfere with women s access to developmental experiences. 50
The Manager s Role

It s hard to overstate the impact that a supervisor can have on his or her employee s
career development. With little or no additional effort than realistic performance reviews
and candid career advice, a competent supervisor can help the employee get on and stay
on the right career track. At the other extreme, an uncaring or unsupportive supervisor
may look back on years of having inhibited his or her employees career development.
The manager can do several things to support his or her subordinates career
development needs. For example, when the subordinate first begins his or her job,
make sure (through orientation and training) that he or she develops the skills
required to get off to a good start. Schedule regular performance appraisals and, at
these reviews, cover the extent to which the employee s current skills and performance
are consistent with the person s career aspirations. Provide the employee with an
informal career development plan like that in Figure 10-4. Keep subordinates
informed about how they can utilize the firm s current career-related benefits,
and encourage them to do so.51 And, know how to coach employees and provide
mentoring assistance. Let s look at this next.
IMPROVING COACHING SKILLS

4 List and discuss the four
steps in effectively coaching Coaching and the closely related mentoring are key managerial skills. Coaching
an employee. means educating, instructing, and training subordinates. Mentoring means advising,
counseling, and guiding. Coaching focuses on teaching shorter-term job-related
skills. Mentoring focuses on helping employees navigate longer-term career hazards.
Supervisors have coached and mentored employees from the dawn of management
(in Greek mythology, Mentor advised Odysseus s son during Odysseus absence).
But with more managers leading highly trained employees and self-managing teams,
supporting, coaching, and mentoring are fast replacing formal authority and giving
orders for getting things done.
Employers understand that coaching and mentoring are important. One consulting
firm surveyed about 2,500 senior human resource and training and development
managers to see what their training programs offered.52 The survey found that the
top skills their firms development programs taught were coaching a performance
problem (72%), communicating performance standards (69%), coaching a devel-
opment opportunity (69%), and conducting a performance appraisal (67%).
Building Your Coaching Skills

Coaching and mentoring require both analytical and interpersonal skills. They require
analysis because it s futile to teach or advise someone if you don t know what the problem
is. They require interpersonal skills because it s equally futile to know the problem if you
can t get the person to listen or change.
coaching mentoring
Educating, instructing, and training Advising, counseling, and guiding.
subordinates.
Some performance situations don t require coaching. For example, if your new
employee learns the first time through how to do the job, or if your employee s perform-
ance review is flawless, you won t need to do much coaching. But things rarely go so
smoothly. And when they don t, you re probably going to have to coach the employee.
Coaching does not mean just telling someone what to do. We can best think of
coaching in terms of a four-step process: preparation, planning, active coaching, and
follow-up.53 Preparation means understanding the problem, the employee, and the
employee s skills. Your aim is to formulate a hypothesis about what the problem is. You ll
watch the employee to see what he or she is doing, and observe the workflow and how
coworkers interact with the employee. In addition to observation, you may review (as we
explained in Chapter 8, Training) objective data on things like productivity, absenteeism
and tardiness, accidents, grievances, waste, product quality, downtime, repairs, customer
complaints, and the employee s previous performance reviews and training.
Planning the solution is next. Perhaps the most powerful way to get someone to
change is to obtain his or her enthusiastic agreement on what change is required. This
requires reaching agreement on the problem and on what to change. In practice,
you ll then lay out a change plan in the form of steps to take, measures of success, and
date to complete.
With agreement on a plan, you can start the actual coaching. Here you are, in
essence, the teacher. Your toolkit will include what you learned about on-the-job
training in Chapter 8 ( Explain quantity and quality requirements, Go through the
job at the normal work pace, and so on). As one writer says, [a]n effective coach
offers ideas and advice in such a way that the subordinate can hear them, respond to
them, and appreciate their value. 54
Finally, bad habits sometimes reemerge. It s therefore necessary to follow-up and
re-observe the person s progress periodically.
Figure 10-5 presents a self-evaluation checklist for assessing your coaching skills.
Building Your Mentoring Skills

Mentoring traditionally means having experienced senior people advising, counseling,
and guiding employees longer-term career development. An employee who agonizes
over which career to pursue or how to navigate office politics might need mentoring.
Mentoring may be formal or informal. Informally, mid- and senior-level managers
may voluntarily help less-experienced employees for instance, by giving them career
advice and helping them to navigate office politics. Many employers also have formal
mentoring programs. For instance, the employer may pair protégés with potential
mentors, and provide training to help mentor and protégé better understand their
respective responsibilities. Either formal or informal, studies show that having a
mentor give career-related guidance and act as a sounding board can significantly
enhance one s career satisfaction and success.55
MENTORING CAVEATS For the supervisor, mentoring is both valuable and

dangerous. It can be valuable insofar as it allows you to influence, in a positive way, the
careers and lives of your less experienced subordinates and colleagues. The danger lies
on the other side of that same coin. Coaching focuses on daily tasks that you can easily
re-learn, so coaching s downside is usually limited. Mentoring focuses on relatively
hard-to-reverse longer-term issues, and often touches on the person s psychology
(motives, needs, aptitudes, and how one gets along with others, for instance). Because
the supervisor is usually not a psychologist or trained career advisor, he or she must
be extra cautious in the mentoring advice he or she gives.
THE EFFECTIVE MENTOR Research on what supervisors can do to be better

mentors reveals few surprises. Effective mentors set high standards, are willing to
invest the time and effort the mentoring relationship requires, and actively steer
protégés into important projects, teams, and jobs.56 Effective mentoring requires trust,
and the level of trust reflects the mentor s professional competence, consistency, ability
to communicate, and readiness to share control.57
FIGURE 10-5 Coach s

Self-Evaluation Checklist
Coach s Self-Evaluation Checklist
Source: Based on Richard Luecke,
Coaching and Mentoring
(Boston: Harvard Business School The questions below relate to the skills and qualities needed to be an effective coach.
Press, 2004), pp. 8 9. Use this tool to evaluate your own effectiveness as a coach.
Question Yes No
1. Do you show interest in career development, not just short-term

performance?
2. Do you provide both support and autonomy?
3. Do you set high yet attainable goals?
4. Do you serve as a role model?
5. Do you communicate business strategies and expected behaviors as a
basis for establishing objectives?
6. Do you work with the individual you are coaching to generate alternative
approaches or solutions which you can consider together?
7. Before giving feedback, do you observe carefully, and without bias, the
individual you are coaching?
8. Do you separate observations from judgments or assumptions?
9. Do you test your theories about a person s behavior before acting on them?
10. Are you careful to avoid using your own performance as a yardstick to
measure others?
11. Do you focus your attention and avoid distractions when someone is
talking to you?
12. Do you paraphrase or use some other method to clarify what is being said
in a discussion?
13. Do you use relaxed body language and verbal cues to encourage a speaker
during conversations?
14. Do you use open-ended questions to promote sharing of ideas and
information?
15. Do you give specific feedback?
16. Do you give timely feedback?
17. Do you give feedback that focuses on behavior and its consequences
(rather than on vague judgments)?
18. Do you give positive as well as negative feedback?
19. Do you try to reach agreement on desired goals and outcomes rather than
simply dictate them?
20. Do you try to prepare for coaching discussions in advance?
21. Do you always follow up on a coaching discussion to make sure
progress is proceeding as planned?
TOTALS
When you have these characteristics and use these strategies, people trust you and tum to you
for both professional and personal support.
If you answered yes to most of these questions, you are probably an effective coach.
If you answered no to some or many of these questions, you may want to consider how you
can further develop your coaching skills.
Source: Harvard ManageMentor* Coaching.
However, studies suggest that traditional mentoring is less effective for women
that it is for men. For example, in one survey of employees who had active mentoring
relationships in one recent year, 72% of the men received one or more promotions
in the ensuing 2 years, compared with 65% of the women. A CEO or other senior
executive mentored 78% of the men, compared with 69% of women.58
Figures like these are prompting employers to assign women to mentor/sponsors
who have more organizational clout. For example, when Deutsche Bank discovered
that several female managing directors had left the firm for better jobs at competitors,
it began pairing them with mentor/sponsors from the bank s executive committee. The
latter were in a position to advocate the women for promotion.
THE PROTÉGÉ S RESPONSIBILITIES Effective mentoring is a two-way street.

It s important to have effective mentors. But as the one with the most to gain, the
protégé is still largely responsible for making the relationship work. Suggestions
for protégés include:
* Choose an appropriate potential mentor. The mentor should be objective
enough to offer good career advice. Many people seek out someone who is one or
two levels above their current boss.
* Don t be surprised if you re turned down. Not everyone is willing to undertake
this time-consuming commitment.
* Make it easier for a potential mentor to agree to your request. Do so by making
it clear ahead of time what you expect in terms of time and advice.
* Respect the mentor s time. Be selective about the work-related issues that you
bring to the table. The mentoring relationship generally should not involve
personal problems or issues.59
Improving Productivity through HRIS: Integrating Talent

Management and Career and Succession Planning
Talent management is the goal-oriented and integrated process of planning, recruiting,
developing, managing, and compensating employees. Talent management oriented
employers therefore actively integrate related human resource functions. For example,
the employee s career planning and development needs should reflect the employee
strengths and weaknesses that the performance appraisal brings to light, while employees
career interests and appraisals should factor into the firm s succession planning.
Achieving such integration usually means using integrated talent management
software. For example, the company that manages the trans-Alaska pipeline has a
user-friendly portal that lets employees see their full training history, development
plans and upcoming deadlines, register for courses, or do career planning usually
without having to ask for help. 60 At the same time, managers can get a quick picture
of the training needs for a particular group, or see all the employees who have a
specific qualification. 61
Various talent management systems enable employers to achieve such appraisal,
career development, training, and succession planning integration. For example, Kenexa
CareerTracker helps organizations optimize workforce productivity by providing an
easily accessible platform for ongoing employee performance management, succession
planning, and career development. 62 Halogen eSuccession enables the employer to
Identify the skills and competencies required to support your 3 5 year strategic plans
and cultivate these in your high-potential employees with career and development
planning . . . [and] establish and develop a large number of promotable employees for
all key areas in your organization. 63 Cornerstone Succession manages succession
management through automated talent profiles, career management, internal recruiting
and comprehensive succession planning capabilities.64 Sum-Total Succession Planning
supports a holistic, end-to-end talent management strategy including:65
* 360 Feedback: Competency reviews by peers can be used as inputs into succession
gap analysis;
* Career Development: As employees map out their career progressions, plans can
be established that address competency, skill, and behavior gaps;
* Compensation Management: Financial plans can be tied to future succession
plans so that the financial impact can be modeled;
* Career Progression: Historical information regarding past positions and career
progression can be used to guide future succession decisions;
* Learning Management: Learning paths and courses can be established for

desired future positions;
* Performance Management: Performance reviews can identify consistent high
performers and top talent in the organization; and
* Recruiting & Hiring: Job profiles can be shared with Succession Planning;
External candidates can be tagged as successors.66
5 List the main decisions

MAKING PROMOTION DECISIONS
employers should address in Career planning and mentoring often precede promotion decisions. Most people
reaching promotion decisions. crave promotions, which usually mean more pay, responsibility, and (often) job
satisfaction. For employers, promotions can provide opportunities to reward excep-
tional performance, and to fill open positions with tested and loyal employees. Yet
the promotion process isn t always a positive experience. Unfairness, arbitrariness,
or secrecy can diminish the effectiveness of the process. Furthermore, with more
employers downsizing, some promotions take the form of more challenging but not
necessarily higher-ranked or better-paid jobs. Several decisions, therefore, loom large
in any firm s promotion process.
Decision 1: Is Seniority or Competence the Rule?

Probably the most important decision is whether to base promotion on seniority or
competence, or some combination of the two.
Today s focus on competitiveness favors competence. However, a company s
ability to use competence as the criterion depends on several things. Union agree-
ments sometimes contain clauses that emphasize seniority. Civil service regulations
that stress seniority rather than competence often govern promotions in many
public-sector organizations.
Decision 2: How Should We Measure Competence?

If the firm opts for competence, how should it define and measure competence?
The question highlights an important managerial adage called the Peter Principle,
after its founder. In brief, the Peter Principle says that companies often promote
competent employees up to their level of incompetence, where they then sit,
sometimes underperforming for years. The point is that defining and measuring
past performance is relatively straightforward. But promotions should require
something more. You also need a valid procedure for predicting the candidate s
future performance.
For better or worse, most employers use prior performance as a guide, and
assume that (based on exemplary prior performance) the person will do well on the
new job. This is the simplest procedure. Many others use tests or assessment centers to
evaluate promotable employees and to identify those with executive potential.
For example, given the public safety issues involved, police departments and the
military tend to take a relatively systematic approach when evaluating candidates for
promotion to command positions. For the police, traditional promotional reviews
include a written knowledge test, an assessment center, credit for seniority, and a score
based on recent performance appraisal ratings. Others include a personnel records
review. This includes evaluation of job-related influences such as supervisory-related
education and experience, ratings from multiple sources, and systematic evaluation
of behavioral evidence.67
THE 9-BOX ASSESSMENT In assessing candidates for promotions, it s not just

current performance but performance potential that s important. For example, some
high-performing candidates may already be at their limit and have no potential for
future growth. Some high potential candidates may be performing poorly but be
salvageable. That idea is at the heart of the 9-box matrix approach to assessing cur-
rent employees promotional prospects.68 The 9-box matrix displays three levels of
current job performance (exceptional, fully performing, not yet fully performing)
across the top. It also shows three levels of likely potential (eligible for promotion,
room for growth in current position, not likely to grow beyond current position)
down the side. This 3 * 3 design results in 9 possible combinations of current job per-
formance and likely potential. For example, an employee may be eligible for promotion
and exceptional in his or her current performance. He or she is therefore ready for
promotion. As another example, an employee may have room to grow in his or her
current position, but not fully performing yet. Here you would want to identify the
reasons for the underperformance and improve the employee s skills.
Decision 3: Is the Process Formal or Informal?

Many firms have informal promotion processes. They may or may not post open posi-
tions, and key managers may use their own unpublished criteria to make decisions.
Here employees may (reasonably) conclude that factors like who you know are more
important than performance, and that working hard to get ahead at least in this firm
is futile.
Other employers set formal, published promotion policies and procedures.
Employees receive a formal promotion policy describing the criteria by which the firm
awards promotions. A job posting policy states the firm will post open positions and
their requirements, and circulate these to all employees. As explained in Chapter 5
(Recruiting), many employers also maintain employee qualification databanks and use
replacement charts and computerized employee information systems.
Decision 4: Vertical, Horizontal, or Other?

Promotions aren t necessarily upwards. For example, how do you motivate employees
with the prospect of promotion when your firm is downsizing? And how do you
provide promotional opportunities for those, like engineers, who may have little or no
interest in managerial roles?
Several options are available. Some firms, such as the exploration division of British
Petroleum (BP), create two parallel career paths, one for managers and another for indi-
vidual contributors such as high-performing engineers. At BP, individual contributors
can move up to nonsupervisory but senior positions, such as senior engineer. These jobs
have most of the financial rewards attached to management-track positions at that level.
Another option is to move the person horizontally. For instance, move a produc-
tion employee to human resources, to develop his or her skills and to test and chal-
lenge his or her aptitudes. And, in a sense, promotions are possible even when
leaving the person in the same job. For example, you can usually enrich the job and
provide training to enhance the opportunity for assuming more responsibility.
Practical Considerations
In any case, there are practical steps to take in formulating promotion policies.69
Establish eligibility requirements, for instance, in terms of minimum tenure and
performance ratings. Require managers to review the job description, and revise if
necessary. Vigorously review all candidates performance and history, including those
now in the firm. Preferably hire only those who meet the requirements.
Sources of Bias in Promotion Decisions

Women and people of color still experience relatively less career progress in organiza-
tions, and bias and more subtle barriers are often the cause. Yet this is not necessarily the
result of decision makers racist sentiments. Instead, secondary factors such as having
few people of color employed in the hiring department may be the cause. In any case,
the bottom line seems to be that whether it s bias or some other reason, barriers still
exist. Employers and supervisors need to identify and abolish them.
Similarly, women still don t make it to the top of the career ladder in numbers
proportionate to their numbers in U.S. industry. Women constitute more than
40% of the workforce, but hold less than 2% of top management positions. Blatant or
subtle discrimination probably accounts for much of this. Some hiring managers
erroneously believe that women belong at home and are not committed to careers.
The old-boy network of informal (mostly male) friendships forged over lunch, at
social events, or at club meetings is still a problem. More women than men must also
make the career versus family decision, since the responsibilities of raising children
still fall disproportionately on women.
Similarly, a lack of female mentors makes it harder for women to find the role models
and supporters they need to help guide their careers. Special networking and mentoring
opportunities can reduce some of these problems, as can more flexible employment
policies. For example, when the accounting firm Deloitte & Touche noticed it was losing
good female auditors, it instituted a new flexible/reduced work schedule. This enabled
many working mothers who might otherwise have left to stay with the firm.70
Promotions and the Law

In general, the employer s promotion processes must comply with all the same antidis-
crimination laws as do procedures for recruiting and selecting employees or any other
HR actions. But beyond that general caveat, there are several specific things to keep in
mind regarding promotion decisions.
One concerns retaliation. Most federal and state employment laws contain anti-
retaliation provisions. For example, one U.S. Appeals Court allowed a claim of retaliation
to proceed when a female employee provided evidence that her employer turned her
down for promotion because a supervisor she had previously accused of sexual harass-
ment made comments that persuaded her current supervisor not to promote her.71
The evidence confirmed that, in a meeting at which supervisors reviewed the person s
performance, the former supervisor (and object of the sexual harassment accusation)
made comments regarding the employee s ability to work effectively with others.
A second concerns using inconsistent, unsystematic processes to decide who to
promote. For example, one employer turned down a 61-year-old applicant for a
promotion because of his interview performance; the person who interviewed him
said he did not get a real feeling of confidence from the candidate.72 In this case,
the court made it clear that while subjective reasons can justify adverse
employment decisions, an employer must articulate any clear and reason-
ably specific factual bases upon which it based its decision. In other words,
you should be able to provide objective evidence supporting your subjective
assessment for promotion.
Managing Transfers
A transfer is a move from one job to another, usually with no change
in salary or grade. Employers may transfer a worker to vacate a position
where he or she is no longer needed, to fill one where he or she is needed, or
Source: Shutterstock.
more generally to find a better fit for the employee within the firm. Many
firms today boost productivity by consolidating positions. Transfers are a
way to give displaced employees a chance for another assignment or,
perhaps, some personal growth. Employees seek transfers for many
reasons, including personal enrichment, more interesting jobs, greater
Employers are transferring employees less convenience better hours, location of work, and so on or to jobs offering
often, partly because of family resistance. greater advancement possibilities.
9-box matrix transfer

In workforce planning, this displays three levels Reassignments to similar positions in other
of current job performance (exceptional, fully parts of the firm.
performing, not yet fully performing) across
the top, and also shows three levels of likely
potential (eligible for promotion, room for
growth in current position, not likely to grow
beyond current position) down the side.
Managing Retirements
For many employees, years of appraisals and career planning end with retirement.
Retirement planning is a significant long-term issue for employers. In the
United States, the number of 25- to 34-year-olds is growing relatively slowly, and
the number of 35- to 44-year olds is declining. So, with many employees in their
50s and 60s moving toward traditional retirement age, employers face a longer-term
labor shortage: companies have been so focused on downsizing to contain costs
that they largely neglected a looming threat to their competitiveness . . . a severe
shortage of talented workers. 73
Many have wisely chosen to fill their staffing gaps in part with current or soon-to-be
retirees. Fortuitously, 78% of employees in one survey said they expect to continue
working in some capacity after normal retirement age (64% said they want to do so part-
time). Only about a third said they plan to continue work for financial reasons; about
43% said they just wanted to remain active.74
The bottom line is that retirement planning is no longer just for helping
current employees slip into retirement.75 It can also enable the employer to retain, in
some capacity, the skills and brain power of those who would normally retire and
leave the firm.
WORKFORCE RETIREMENT PLANNING A reasonable first step is to conduct

numerical analyses of pending retirements. This should include a demographic
analysis (including a census of the company s employees), a determination of the
average retirement age for the company s employees, and a review of how retirement
is going to affect the employer s health care and pension benefits. The employer can
then determine the extent of the retirement problem, and take fact-based steps to
address it.76
METHODS Employers seeking to attract and/or retain retirees need to take

several steps. The general idea is to institute human resource policies that encourage
and support older workers. Not surprisingly, studies show that employees who are
more committed and loyal to the employer are more likely to stay beyond their
normal retirement age.77 This often starts by creating a culture that honors experience.
For example, the CVS pharmacy chain knows that traditional recruiting media such
as help-wanted signs might not attract older workers; CVS thus works through
The National Council on Aging, city agencies, and community organizations to
find new employees. They also made it clear to retirees that they welcome older
workers: I m too young to retire. [CVS] is willing to hire older people. They don t
look at your age but your experience, said one dedicated older worker.78 Others
modify selection procedures. For example, one British bank stopped using psycho-
metric tests, replacing them with role-playing exercises to gauge how candidates
deal with customers.
The techniques employers use to keep older workers include offering them
part-time positions, hiring them as consultants or temporary workers, offering
them flexible work arrangements, encouraging them to work past traditional retire-
ment age, providing training to upgrade skills, and instituting a phased retirement
program. The latter lets older workers ease into retirement with gradually reduced
work schedules.79
REVIEW
MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to
continue practicing and applying the concepts you ve learned.
CHAPTER SECTION SUMMARIES

1. Managing voluntary turnover requires identifying its online career development workshops and programs.
causes and then addressing them. A comprehensive Perhaps the simplest and most direct is to make the
approach to retaining employees should be multi- appraisal itself career-oriented, insofar as the appraisal
faceted, and include improved selection, a well- feedback is a link to the employee s aspirations and
thought-out training and career development program, plans. Supervisors can play a major role in their
assistance in helping employees lay out potential career employee s career development. For example, make sure
plans, providing employees with meaningful work and the employee gets the training he or she requires, and
recognition and rewards, promoting work life balance, make sure appraisals are discussed in the context of the
acknowledging employees achievements, and providing employee s career aspirations.
all this within a supportive company culture. 4. Getting employees to do better requires improving your
2. Employee engagement is important. Numerous employee coaching skills. Ideally, the coaching process involves
outcomes including turnover and performance preparation (in terms of analyzing the issues), developing
reflect the degree to which employees are engaged. For an improvement plan, active coaching, and follow-up.
example, business units with the highest levels Effective mentors set high standards, invest the time, steer
of employee engagement have an 83% chance of protégés into important projects, and exhibit professional
performing above the company median, while those competence and consistency.
with the lowest employee engagement have only a 5. For employers, promotions can provide opportunities
17% chance. Engagement-supporting actions include to reward exceptional performance, and to fill open
making sure employees (1) understand how their positions with tested and loyal employees. Several deci-
departments contribute to the company s success, sions loom large in any firm s promotion process: Is
(2) see how their own efforts contribute to achieving the seniority or competence the rule? How should we meas-
company s goals, and (3) get a sense of accomplishment ure competence? Is the process formal or informal? and,
from working at the firm. Vertical, horizontal, or other? Women and people of
3. Employees ultimately need to take responsibility for color still experience relatively less career progress in
their own careers, but employers and managers should organizations, and bias and more subtle barriers are
also understand what career management methods are often the cause. In general, the employer s promotion
available. These include establishing company-based processes must comply with all the same antidiscrimi-
career centers, offering career planning workshops, nation laws as do procedures for recruiting and selecting
providing employee development budgets, and offering employees or any other HR actions.
DISCUSSION QUESTIONS
1. Why is it advisable for an employee retention effort to be 3. What is the employee s role in the career development
comprehensive? To what extent does IBM s on-demand process? The manager s role? The employer s role?
program fit that description, and why? 4. List and discuss the four steps in effectively coaching
2. Explain why employee engagement is important, and an employee. How could (and would) a professional
how to foster such engagement. What exactly would football coach apply these steps?
you as a supervisor do to increase your employees 5. What are the main decisions employers should address
engagement? in reaching promotion decisions?
INDIVIDUAL AND GROUP ACTIVITIES

1. Many rightfully offer IBM as an example of an employer to the required knowledge the appendix lists; (3) write
that works hard to improve employee retention and four multiple-choice exam questions on this material
engagement. Browse through the employment pages that you believe would be suitable for inclusion in the
of IBM.com s Web site (such as www-03.ibm.com/ HRCI exam; and (4) if time permits, have someone
employment/build_your_career.html). In this chapter, we from your team post your team s questions in front of
discussed actions employers can take to improve employee the class, so the students in other teams can take each
retention and engagement. From the information on others exam questions
IBM s Web pages, what is IBM doing to support retention 7. Several years ago, a survey of college graduates in the
and engagement? United Kingdom found that although many hadn t
2. In groups of four or five students, meet with one or two found their first jobs, most were already planning
administrators and faculty members in your college or career breaks and to keep up their hobbies and inter-
university and, based on this, write a 2-page paper on ests outside work. As one report of the findings put it,
the topic the faculty promotion process at our college. the next generation of workers is determined not to
What do you think of the process? Based on our discus- wind up on the hamster wheel of long hours with no
sion in this chapter, could you make any suggestions for play. 80 Part of the problem seems to be that many
improving it? already see their friends putting in more than 48 hours
3. Working individually or in groups, choose two occupa- a week at work. Career experts reviewing the results
tions (such as management consultant, HR manager, or concluded that many of these recent college grads are
salesperson) and use sources such as O*Net to size up not looking for high-pay, high-profile jobs anymore. 81
the future demand for this occupation in the next Instead, they seem to be looking to compartmentalize
10 years or so. Does this seem like a good occupation their lives. They want to keep the number of hours they
to pursue? Why or why not? spend at work down, so they can maintain their hobbies
4. In groups of four or five students, interview a small and outside interests. If you were mentoring one of
business owner or an HR manager with the aim of these people at work, what three bits of career advice
writing a 2-page paper addressing the topic steps our would you give him or her? Why? What (if anything)
company is taking to reduce voluntary employee would you suggest their employers do to accommodate
turnover. What is this employer s turnover rate now? these graduates stated career wishes?
How would you suggest it improve its turnover rate? 8. Sporting News (http://aol.sportingnews.com/ncaa-
5. The HRCI Test Specifications Appendix at the end of basketball/story/2009-07-29/sporting-news-50-greatest-
this book (pages 633 640) lists the knowledge someone coaches-all-time) ran a story listing what they called the
studying for the HRCI certification exam needs to have 50 greatest basketball coaches. Look at this list, and pick
in each area of human resource management (such as in out two of the names. Then research these people online
Strategic Management, Workforce Planning, and to determine what behaviors they exhibited that seem to
Human Resource Development). In groups of four to account for why they were great coaches. How do these
five students, do four things: (1) review that appendix behaviors compare with what this chapter had to say
now; (2) identify the material in this chapter that relates about effective coaching?
EXPERIENTIAL EXERCISE
Where Am I Going . . . and Why?
Purpose: The purpose of this exercise is to provide you with you may do this analysis in teams of three or four
experience in analyzing your career preferences. students).
Required Understanding: Students should be thoroughly
familiar with the Employee s Role in Career Management 1. What does your research suggest to you about what
section in this chapter, as well as using O*Net (which we would be your preferable occupational options?
discussed in Chapter 4). 2. What are the prospects for these occupations?
3. Given these prospects and your own occupational
How to Set Up the Exercise/Instructions: inclinations, outline a brief, 1-page career plan for
Using O*Net and the Employee s Role in Career Manage- yourself, including current occupational inclinations,
ment section in this chapter, analyze your career-related career goals, and an action plan listing four or five
inclinations (you can take the self-directed search for development steps you will need to take in order to
about $10 at www.self-directed-search.com). Based on get from where you are now career-wise to where you
this analysis, answer the following questions (if you wish, want to be, based on your career goals.
APPLICATION CASE
GOOGLE REACTS
On the face of it, Google would seem to be the last company Google management knew that pay was just part of the
that one would expect to have an employee retention solution. It had to take other steps.
problem. Google usually shows up in Best Employers to
Work for lists; it s famous for full benefits, from dry-cleaning
to free Web-enabled transportation from San Francisco Questions
to great pensions; it offers great stock options; and as a fast- 1. Without doing any further research than what you learned
growing company, it usually has many job applicants. in this chapter, what other steps would you suggest Google
So when its employee turnover began creeping up around take to improve employee retention?
2010, Google s human resource team had to decide what to 2. Was there any information in previous chapters of this
do. Part of the problem is that as attractive as Google is to book that would help to illustrate other steps Google
work for, Silicon Valley is filled with attractive employers, took to improve retention?
from Apple to Facebook. One of Google s first steps was to 3. Use other Internet sources, including Google.com, to
boost compensation. It gave all 23,000 Google employees a finalize an answer to the question, What other steps
10% raise, plus a $1,000 tax-free holiday bonus. 82 But still, should Google take to improve employee retention?
CONTINUING CASE
CARTER CLEANING COMPANY
The Career Planning Program Questions
Career planning has always been a pretty low-priority item for 1. What would be the advantages to Carter Cleaning of
Carter Cleaning, since just getting workers to come to work setting up a career planning program?
and then keeping them honest is enough of a problem, as Jack 2. Who should participate in the program? All employees?
likes to say. Yet Jennifer thought it might not be a bad idea to Selected employees?
give some thought to what a career planning program might 3. Outline and describe the career development pro-
involve for Carter. Many of their employees had been with gram you would propose for the cleaners, pressers,
them for years in dead-end jobs, and she frankly felt a little counter people, and managers at the Carter Cleaning
badly for them: Perhaps we could help them gain a better Centers.
perspective on what they want to do, she thought. And she
definitely believed that career support would have an effect on
improving Carter s employee retention.
TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE

THE HOTEL PARIS CASE
The New Career Management System sure that the employees were doing their jobs. But in a hotel,
The Hotel Paris s competitive strategy is To use superior guest just about every employee is on the front line. There is usu-
service to differentiate the Hotel Paris properties, and to ally no one there to supervise the limousine driver when he
thereby increase the length of stay and return rate of guests, and or she picks up a guest at the airport, or when the valet takes
thus boost revenues and profitability. HR manager Lisa Cruz the guest s car, or the front-desk clerk signs the guest in, or
must now formulate functional policies and activities that sup- the housekeeping clerk needs to handle a guest s special
port this competitive strategy by eliciting the required employee request. If the hotel wanted satisfied guests, they had to have
behaviors and competencies. committed employees who did their jobs as if they owned
Lisa Cruz knew that as a hospitality business, the Hotel the company, even when the supervisor was nowhere in
Paris was uniquely dependent upon having committed, sight. But for the employees to be committed, Lisa knew the
high-morale employees. In a factory or small retail shop, the Hotel Paris had to make it clear that the company was also
employer might be able to rely on direct supervision to make committed to its employees.
From her experience, she knew that one way to do this chapter). For example, the new performance management
was to help her employees have successful and satisfying system required that the supervisor appraise the employee
careers, and she was therefore concerned to find that the based on goals and competencies that were driven by the
Hotel Paris had no career management process at all. Super- company s strategic needs, and the appraisal itself produced
visors weren t trained to discuss employees developmental new goals for the coming year and specific development
needs or promotional options during the performance plans for the employee.
appraisal interviews. Promotional processes were informal.
And the firm did not attempt to provide any career develop-
ment services that might help its employees to develop a Questions
better understanding of what their career options were, 1. Many hotel jobs are inherently dead end ; for example,
or should be. Lisa was sure that committed employees were maids, laundry workers, and valets either have no great
the key to improving the experiences of its guests, and that aspirations to move up, or are just using these jobs
she couldn t boost employee commitment without doing a temporarily, for instance, to help out with household
better job of attending to her employees career needs. expenses. First, do you agree with this statement why,
For Lisa and the CFO, preliminary research left little or why not? Second, list three specific career activities you
doubt about the advisability of instituting a new career man- would recommend Lisa implement for these employees.
agement system at the Hotel Paris. The CFO therefore gave 2. Build on the company s current performance manage-
the go-ahead to design and institute a new Hotel Paris career ment system by recommending two other specific career
management program. Lisa and her team knew that they development activities the hotel should implement.
already had some of the building blocks in place, thanks 3. What specific career development activities would you
to the new performance management system they had recommend in light of the fact that the Paris s hotels and
instituted just a few weeks earlier (as noted in the previous employees are disbursed around the world?
KEY TERMS
career, 327 career planning, 328 mentoring, 333
career management, 327 reality shock, 330 9-box matrix, 339
career development, 328 coaching, 333 transfers, 339
ENDNOTES
1. IBM s Centenary: The Test of Time, The 10. Max Messmer, Employee Retention: Why Withdrawal Behavior, Journal of Manage-
Economist, June 11, 2011, p. 20; IBM is It Matters Now, CPA Magazine, June/July ment 25, no. 6 (1999), pp. 875 895.
Founded, http://www.ibm.com/ibm100/ 2009, p. 28; and The Employee Retention 18. Ibid.
us/en/icons/founded/, accessed August 28, Challenge, Development Dimensions 19. Pelled and Xin, Down and Out.
2011. International, 2009. 20. Ibid.
2. See, for example, www.nobscot.com/ 11. Messmer, Employee Retention. 21. For an examination of this, see ibid.
survey/index.cfm www.bls.gov/jlt/, accessed 12. Ibid. 22. See, for example, Margaret Shaffer and
April 27, 2011. 13. Jessica Marquez, IBM Cuts Costs and David Harrison, Expatriates Psycho-
3. Jean Phillips and Stanley Gulley, Strategic Reduces Layoffs as It Prepares Workers for logical Withdrawal from International
Staffing (Upper Saddle River, NJ: Pearson an On Demand World, Workforce Man- Assignments: Work, Nonwork, and
Education, 2012). agement 84, no. 5 (May 2005), pp. 84 85. Family Influences, Personnel Psychol-
4. The following example is based on 14. David Wilson, Comparative Effects of ogy 51, no. 1 (Spring 1998), pp. 87 118;
Barbara Hillmer, Steve Hillmer, and Gale Race/Ethnicity and Employee Engage- Karl Pajo, Alan Coetzer, and Nigel
McRoberts, The Real Costs of Turnover: ment on Withdrawal Behavior, Journal Guenole, Formal Development Oppor-
Lessons from a Call Center, Human of Managerial Issues 21, no. 2 (Summer tunities and Withdrawal Behaviors
Resource Planning 27, no. 3 (2004), 2009), pp. 165 166, 195 215. by Employees in Small and Medium-
pp. 34 41. 15. Paul Eder and Robert Eisenberger, Per- Sized Enterprises, Journal of Small
5. Ibid. ceived Organizational Support: Reducing Business Management 48, no. 3 (July
6. www.worldatwork.org/waw/adimLink? the Negative Influence of Coworker With- 2010), pp. 281 301; and P. Eder, et. al.,
id=17180, accessed April 27, 2011. drawal Behavior, Journal of Management 34, Perceived Organizational Support:
7. Phillips and Gulley, Strategic Staffing, no. 1 (February 2008), pp. 55 68. Reducing the Negative Influence of
p. 329. 16. Wilson, Comparative Effects of Race/ Coworker Withdrawal Behavior, Jour-
8. Stephen Robbins and Timothy Judge, Ethnicity and Employee Engagement. nal of Management 34 no. 1 (February
Organizational Behavior (Upper Saddle 17. Lisa Hope Pelled and Katherine R. Xin, 2008), pp. 55 68.
River, NJ: Pearson Education, 2011), p. 81. Down and Out: An Investigation of the 23. Adrienne Facts, Raising Engagement,
9. Phillips and Gulley, Strategic Staffing, p. 328. Relationship between Mood and Employee HR Magazine, May 2010, pp. 35 40.

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320 PART 1 INTRODUCTION

WHERE ARE WE NOW . . .

Access a host of interactive learning aids at

MANAGING EMPLOYEE TURNOVER

Managing Voluntary Turnover

FIGURE 10-1 Reasons

Of course, turnover isn t necessarily bad. For example, losing low-performing

Retention Strategies for Reducing Voluntary Turnover

THE STRATEGIC CONTEXT

Managing Involuntary Turnover

Talent Management and Employee Retention

2 Explain why employee

Actions That Foster Engagement

Monitoring Employee Engagement

FIGURE 10-2 Employer

Source: Working Today:

career career management career development

to a person s career exploration, establishment, success, and fulfillment. Career

The Employee s Role in Career Management

EXERCISE 1 One useful exercise for identifying occupational skills is to head a

EXERCISE 2 Another exercise can prove enlightening. On a page, answer the

3 Discuss what employers and

Career Management Systems

CAREER PLANNING WORKSHOPS A career planning workshop is a planned

LIFELONG LEARNING BUDGETS As we explained in Chapter 8 (Training),

PROVIDE CAREER COACHES For example, Allmerica Financial Corp. hired

FIGURE 10-3 Employee

2. What is the highest probable promotion within five years?

3. What does this employee need to prepare for promotion?

A. Employee s Major Strengths

D. Employee s Comments on This Review:

Employer s Signature: Date:

The Manager s Role

IMPROVING COACHING SKILLS

Building Your Coaching Skills

Building Your Mentoring Skills

MENTORING CAVEATS For the supervisor, mentoring is both valuable and

THE EFFECTIVE MENTOR Research on what supervisors can do to be better

FIGURE 10-5 Coach s

1. Do you show interest in career development, not just short-term

Source: Harvard ManageMentor* Coaching.

THE PROTÉGÉ S RESPONSIBILITIES Effective mentoring is a two-way street.

Improving Productivity through HRIS: Integrating Talent

* Learning Management: Learning paths and courses can be established for

5 List the main decisions

Decision 1: Is Seniority or Competence the Rule?

Decision 2: How Should We Measure Competence?

THE 9-BOX ASSESSMENT In assessing candidates for promotions, it s not just

Decision 3: Is the Process Formal or Informal?

Decision 4: Vertical, Horizontal, or Other?

Sources of Bias in Promotion Decisions

Promotions and the Law

9-box matrix transfer

WORKFORCE RETIREMENT PLANNING A reasonable first step is to conduct

METHODS Employers seeking to attract and/or retain retirees need to take

CHAPTER SECTION SUMMARIES

INDIVIDUAL AND GROUP ACTIVITIES

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE

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