Staff Turnover | Employee Engagement and Employee Retention
Engagement vs retention
Every CEO, manager and HR staffer is aware of the financial burden unmanaged staff turnover places on an organisation. The ongoing recruitment costs, the knowledge and productivity drain, the reduced morale among those left behind — just to name a few factors.
These expensive consequences are why companies dangle large financial carrots in an attempt to retain their top performers.
Unfortunately, rewards and bonuses secure one thing only: temporary compliance. When it comes to producing lasting change in behaviour, they are strikingly ineffective.
This is why people inevitably leave, despite the 'golden handcuffs' management use to try to retain them.
The cost of using rewards to extrinsically motivate and retain people is the adverse effect they inevitably have on your employees' intrinsic motivation and engagement.
Overemphasis on external rewards eventually diminishes the intrinsic motivation that is responsible for passion, drive and commitment. They become disengaged.
The focus becomes the rewards, rather than the work itself.
Simply put: rewards undermine interest in the task. And the bigger the incentive, the greater the erosion of interest.
Thus, the more you use rewards (pay increases and incentives) to motivate your people, the more they lose interest in their work. And, eventually, they leave anyway.
Employee remuneration
Arguing against a focus on rewards, incentives and 'golden handcuffs' isn't an argument against decent remuneration.
Rather, the point is that management needs to stop attributing more importance to money than it actually has and stop pushing it into a position of unwarranted prominence.
The problem isn't the dollars themselves, but using the dollars to bribe people to jump through hoops.