Leadership Approaches that Impact Employee Retention
By Cristin Kumar
In the spring of 2020, the American workplace as we knew it became a shell of its former self. Organizations scrambled to transform their structures to accommodate the “new normal” of virtual workplaces. As made apparent by the Great Resignation, the pandemic also highlighted for many the importance of creating a positive work environment. In 2022, employees are searching for an organization with a healthy culture and work that they enjoy.[1] Today’s workforce desires motivating and inspiring work. Effective leaders are the key to motivating and inspiring their employees to engage in and commit to their organization’s success.
Here are some ways in which leadership can effectively inspire, empower, and motivate employees:
Build trust with employees.
Communicate openly and honestly and follow through with your commitments to build trust with employees. Organizational leadership sets the tone for a culture that promotes trust. In one study, behavioral economists organized a trust exercise with the study’s subjects in which they “asked [the] subjects to determine how an endowment should be allocated. Players invested more money, with no guarantee of return, in partners whom they perceived to be more trustworthy on the basis of a glance at their faces.”[2] Ultimately, the study found that perceived trustworthiness is a major factor in an individual’s decision-making. Leaders who are perceived as trustworthy will command employees who are more willing to take risks with them and stay with the company through challenging and uncertain times.
Provide workforce with autonomy and flexibility.
Empower your employees to achieve outcomes without micro-managing them. A 2017 workplace culture study from the University of Birmingham Business School “found that employees with higher levels of autonomy in their work reported positive effects on their overall well-being and higher levels of job satisfaction.” In this study, researchers defined autonomy as the level of control over work tasks, environment, and schedule. They found that more autonomy and flexibility resulted in employees “enjoying” work and improved their overall well-being.[3] Employees who feel empowered and taken care of are more likely to stay at an organization.
Connect employees to the purpose of their work.
Communicate the greater purpose and the impact of the work to employees so they understand that what they do really matters. In a 2014 initiative, a large consulting firm asked employees “’What do you do?’, [encouraging them] to share their own stories of purpose-driven work.” In the company’s annual partner survey following this initiative, 90% of employees “reported that the higher purpose initiatives increased people’s pride in the company.” This initiative greatly improved employees’ morale and investment in their company, establishing the company as the top-ranked Big Four firm in that year’s FORTUNE 100 Best Companies to Work For list for the first time in its history.[4] Employees who are proud of where they work tend to be loyal to the organization and recruit new talent through their positive endorsements.
Promote teamwork and eliminate office politics.
Reward and promote teamwork and squash self-serving office politics. Jeff Weiner, who led the social media giant LinkedIn through a period of incredible transformation and growth, is often praised for being a compassionate and inspiring leader. He holds that, “It’s hard to make better decisions faster when people on the team lack trust in one another and are constantly questioning each other’s motivations. In an environment like that, you’ll spend most of your time navigating corporate politics, rather than focusing on the task at hand. Instead, create a culture where people take the time to understand the other person’s perspective and not assume nefarious intention; build trust; and align around a shared mission."[5] Employees who feel part of a team and enjoy their work environment are more likely to stay put.
Recognize high performers.
Public recognition, congratulatory cards, and other non-monetary awards can be effective ways to motivate employees; in fact, sometimes they can even be more effective than monetary awards.[6] In a 2016 field experiment, researchers “hired more than 300 employees to work on a three-hour data entry task. In a random sample of work groups, workers unexpectedly received recognition after two hours of work. [They found] that recognition increases subsequent performance substantially, and particularly when recognition is exclusively provided to the best performers.”[7] Employees who respond well to deserving recognition are often the top performers that you most want to retain!
These five leadership approaches will enable you to inspire and motivate your employees – leading to increased employee performance, commitment, and tenure. In today’s competitive labor market, leaders should not expect salary and benefits alone to attract and retain the best and the brightest workforce. Leaders must actively connect with employees and create a positive and purpose-driven work environment that empowers and recognizes employees.
[1] Catherine Thorbecke, “Pandemic sparks labor reckoning for some: 'It's not just about the job anymore,'”ABC News, May 24, 2021, https://abcnews.go.com/Business/pandemic-sparks-labor-reckoning-job-anymore/story?id=77870374.
[2] Wout, M. van’t and A.g. Sanfey, “Friend or foe: The effect of implicit trustworthiness judgments in social decision-making.” Elsevier, Volume 108, Issue 3, September 2008. https://www.sciencedirect.com/science/article/abs/pii/S0010027708001662?via%3Dihub (accessed June 3, 2022).
[3] University of Birmingham. "Autonomy in the workplace has positive effects on well-being and job satisfaction, study finds." ScienceDaily. www.sciencedaily.com/releases/2017/04/170424215501.htm (accessed June 3, 2022).
[4] Bruce N. Pfau, Harvard Business Review, “How an Accounting Firm Convinced Its Employees They Could Change the World,” (2015) https://hbr.org/2015/10/how-an-accounting-firm-convinced-its-employees-they-could-change-the-world.
[5] Jeff Weiner, Wharton School of Business Commencement Address, “LinkedIn’s Jeff Weiner: How Compassion Builds Better Companies,” May 17, 2018, https://knowledge.wharton.upenn.edu/article/linkedin-ceo-how-compassion-can-build-a-better-company/.
[6] American Economic Review, “The Currency of Reciprocity: Gift Exchange in the Workplace,” (2012), https://www.jstor.org/stable/23245468.
[7]O’Flaherty, Shibeal, Michael T. Sanders, and Ashley Whillans O’Flaherty, “Research: A Little Recognition Can Provide a Big Morale Boost” (2021), https://hbr.org/2021/03/research-a-little-recognition-can-provide-a-big-morale-boost.