Senior Leadership s Criteria For Retaining An Employee

Senior Leadership’s Criteria For Retaining An Employee

Just as employees consider the notion of staying or leaving, senior leadership also weighs options to retain or let go employees. During a crisis, senior leadership is motivated by three reasons to retain employees:

1. “This job is necessary.” The immediacy of the situation usually results in quick judgments regarding which employees can perform needed tasks. However, senior leadership also needs to ensure that it has the critical human capital—the skills and competencies required for the company to recover and grow. Balancing these two needs requires a human capital review and analysis. (See Chapter 6.)

2. “We are loyal to our employees.” This attitude can have long-term positive results for an organization. Sometimes, however, there is a down side. Many leaders are not realistic about the true capabilities of employees for the future because they are blinded by loyalty. The service and loyalty of employees should be a high priority during difficult times. However, it should not be at the expense of sound judgment regarding the human capital that will be required for the company’s future. Preserving jobs should be a high priority, but maintaining the right combination of skills and competencies should also be given top priority.

3. “We retain good performers.” It makes sense to try to retain high-performing employees. This is perceived by most employees as a fair way to make layoff decisions. Of course, it does not make sense to maintain employment of poor performers in any case. While senior leadership may be motivated to keep good performers, it begs the question, “Who are the good performers?” Without an effective performance management program or other means of assessing skills, there may be disagreement over past performance or prospects for the future. Senior leadership and management should not jump the gun when deciding which employees best fit the company’s future needs.

Senior Leadership’s Criteria For Laying Off An Employee

Senior leadership typically has two motivations to terminate an employee’s services:

1. “This job is no longer needed.” This is the most frequent reason cited when employees are dismissed. However, the motivation of the employer and the message given to the employee are often unclear. Is it the job that is not required or the skills the employee possesses that are no longer needed? If a company does not have a clear path about how to proceed, then senior leadership may retain and terminate the wrong employees for the wrong reasons.

2. “We terminate poor performers.” Poor performance should be considered at the get-go for termination. But the same issues should be used to identify the good and the poor performers. Senior leadership should not base layoff decisions on past performance without a consistent, fair method of evaluating individual employees. Otherwise, lawsuits are invited.

Obtaining Alignment between Employees And Senior Management

Attaining alignment is not easy. The combination of all of the motivations of employees and senior leadership during a crisis appear in Table 3-1. There are potentially conflicting motivations.

Table 3-1: Motivation to Stay and Leave in a Crisis

	Employees	Senior Leadership
Motivation to stay	“I need a job.” “I am truly loyal and committed.” “I see a future with the company”	“This job is necessary.” “We are loyal to our employees” “We retain good performers”
Motivation to leave (voluntarily or involuntarily	“I have lost faith in the company” “I have good options for my career and I should take advantage of them now”: “This is a good time to leave”	“This job is no longer needed” “We terminate poor performers.”

Employees and senior leadership may be conflicted among themselves and with each other. An employee may not know the company’s intent. Or the company may be unsure about whom to keep and what employees will be required to do in the future. The key is to sort through all the potentially conflicting motivations and perceptions. Then leadership should align positive company interests with positive employee motivations by doing the following:

1. Minimize employee motivation to leave and enhance the motivation to stay with the company. Develop and communicate a simple straightforward business turnaround plan. This will reduce fear and increase faith in the company’s future. It will also provide employees with a frame of reference to compare against outside opportunities, hopefully placing the company in a positive light.

2. Focus on the skills and competencies the company needs for future success. When it comes time to determine whom to keep and lay off, place decisions in a framework of skills and competencies necessary for the company’s future. In other words, review the company’s future plans and ask the tough questions that define the requirements needed to ensure the plan’s success.

At the end of the day, companies want the right people to stay for the right reasons. Unfortunately, at this point in a crisis, many leaders do not know who those people will be. Chapter 5 is a guide through the process.