
The Psychology of Employee Retention - romymisra
http://www.romymisra.com/the-psychology-of-employee-retention-all-about-stories/
======
nhashem
This is a great point, and I wish some of the executives as my previous
employers understood this. For awhile, things seem great. The company has a
core product that is showing great growth. That in turn leads to even more
ambitious goals. The value from the above allows the company to offer generous
perks. Life is good.

Then what happens? The core product begins to plateau. Executives begin to
abandon long-term, ambitious projects, in order to squeeze more juice from the
lemon to hit quarterly goals. Finally, perks are cut because it's just way too
lavish to have free soda when you're only growing profit 33% year over year
instead of 100%. As the OP indicated, the employees are no longer left with
any stories. You may still enjoy your day to day work, you may still be well
compensated in terms of salary. But without that intrinsic motivation, it's
only a matter of time before your enthusiasm flags and you're looking for
another job that can offer you what you had before.

For company leaders, products plateau and nobody is successful all the time.
But goals and perks _are_ under their complete control, and especially for the
latter, it usually requires only as nominal amount of money. It can mean all
the difference in retaining your talent during bumpy times, or having everyone
abandon ship because they feel abandoned already.

------
btipling
I never understood perks. I work where I work because I like the people, the
technology, and the product in that order.

The lack of money and success create anxiety, but an abundance of these in
terms of what an employee can hope to achieve do not influence my decision
about where I work.

As for perks, I don't care about trivial asides that people think up in order
to retain talent. This is an artificial device that will not stop the
bleeding. Don't waste your time doing this if it's something you have to think
up in order to achieve yet another metric. If you're going to do something fun
do it because you want to do it because you yourself would enjoy it and know
that at least a few of the others on your team would too. But then you're not
doing it for retention, you're doing it because you want to.

Bottom line is if the factors don't add up, an employee will leave, but things
like people, technology and product are what candidates should consider before
they join, and they're not likely to change much over the duration of an
employment, so if someone is leaving, they probably didn't know what they were
getting themselves into, something big changed, or they think they are really
failing.

Or maybe they just found a new thing that interests them, in which case let
them go.

~~~
rdl
Perks which improve my productivity are things I care about (good computer,
ability to get needed books and other resources, functional IT support, fast
Internet connection, private office when/if desired, wfh when optimal,
comfortable chair, easy commute/parking). For most of those things I'd trade
$1 in salary for $0.50 or less allocated to them optimally. Not having to deal
with admin stuff like expense or hour tracking is worth $5 in salary for $0.50
in benefit.

Free food, on site gym, nice offices, etc I'd trade at a discount to salary,
like$1 in salary for $2-3 in perks.

~~~
rprasad
[Reply to the dead comment; you need to be logged in witht showdead to see
it.] Benefits in kind does not refer to work equipment, since those aren't
things you get to take with you--the company owns that stuff, you just get to
use it. Benefits in kind means something like receiving a personal laptop on
company dime that you can take with you even if you leave.

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DanielRibeiro
Github recently shared some of its secrets on this topic[1]:

 _"We've gained 100+ employees in two years and we've never had anyone quit.
That won't last forever, but I think it's a good indication of the type of
company we've built. There are certain things you can do to retain employees,
and by worrying about employee happiness you'll ultimately create a much
better product."_

[1] <http://zachholman.com/talk/how-to-build-a-github>

------
DigitalSea
You know what's great for employee retention without sugar-coating it? Pay
your employee's correctly (you can't expect talent for peanuts), don't make
them feel like they can't leave at a normal time, treat your employees with
respect, offer a clear path of progress in the company (where you are now,
where you could be) and one of the most important: innovate and excite.

~~~
yesimahuman
The "respect" aspect isn't touched on much in these comments. It's shitty when
your boss belittles your team in front of guests and makes you feel like
you're all his "peons." No perks can fix that kind of disrespect.

~~~
DigitalSea
I worked at a place like that once, they churned through so many system
administrators especially and in the end found themselves in a situation where
they were finding it hard to get system administrators and after all of that
eventually fired the manager who had single-handedly damaged the company by
that stage it was too late. So respect is something I definitely agree a
company and its higher-ups should possess.

------
poezn
In my opinion it's a mistake to come up with perks just so you can tell the
right story. In his most recent book Clay Christensen describes what makes you
love your job better than anything else I've read. He distinguishes between
motivators and hygiene factors (mainly citing Frederick Herzberg's research):
"Motivation factors include challenging work, recognition, responsibility, and
personal growth. Motivation is much less about external prodding or
stimulation, and much more about what’s inside of you and inside of your
work." On the other hand he lists hygiene factors: "status, compensation, job
security, work conditions, company policies, and supervisory practices." (from
[http://www.fastcompany.com/1836982/clayton-christensen-
how-f...](http://www.fastcompany.com/1836982/clayton-christensen-how-find-
work-you-love) and his book). You can pile up perks as much as you want; they
just serve as hygiene factors. As long as your motivators are not met, a high
retention quote is wishful thinking. HR departments at bigger startups (and
bigger perks) know that all too well.

At the end of the day you don't work for the big colorful slide at your
office, or Whiskey Fridays, or your favorite 80's arcade video game. Cynically
speaking, these are just there to make your long work days a bit sweeter.

So what's left for startups to retain their top employees? It's figuring out
what truly motivates them. This takes a lot of hard work, empathy, and will.
It's a long term investment. As such it might not pay off in the short term,
but it might well give you in return the high retention rate you're looking
for.

~~~
Knighty
Absolutely, people have been studying motivation theory for decades. Making up
'stories' might help, but without any supporting evidence or research it seems
mostly like pseudo-science to call this the 'Psychology of retention'.

For instance, how many people did he poll? Where did they work? Are they
representative of the startup phenomena as a whole? What question was asked
and what were their verbatim responses?

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BadassFractal
Sounds a lot like Guy Kawasaki's MAP: Mastery, Autonomy, Purpose. From
[http://hiring.monster.com/hr/hr-best-practices/workforce-
man...](http://hiring.monster.com/hr/hr-best-practices/workforce-
management/improving-employee-relations/small-business-owners.aspx) :

"First, the most powerful way to enchant employees is to provide a MAP. “M”
stands for mastery -- that is, a way to master new skills on the job. “A”
stands for autonomy -- so that employees can master new skills while working
autonomously and not be micro-managed. Finally, “P” stands for purpose.
Employees love to master new skills in autonomous positions while working
towards an organization with a high purpose such as making the world a better
place."

~~~
DanielRibeiro
That actually comes from Dan Pink[1]:
<http://www.youtube.com/watch?v=u6XAPnuFjJc>

[1] Also a book [http://www.amazon.com/Drive-Surprising-Truth-About-
Motivates...](http://www.amazon.com/Drive-Surprising-Truth-About-
Motivates/dp/1594488843)

~~~
SatvikBeri
...and this framework has been around even longer than that, although the
vocabulary has typically been "Autonomy, Competence, and Relatedness":
<http://en.wikipedia.org/wiki/Self-determination_theory>

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Tichy
What about "teams"? I have come to the conclusion that "team spirit" and so on
are also main strategies to make people stick to crappy jobs. Case in point:
soldiers - I think being a soldier is probably one of the worst jobs ever
(simply because you have a high risk of being killed on the job), yet people
stick it out for the sake of their mates. Or mining - doesn't sound very
attractive, but apparently actual miners love the companionship. Personally I
have also frequently delayed quitting a job for too long because I didn't want
to disappoint my colleagues. In the end I should probably have inspired them
to leave, too... (I know, that is just an anecdote, but still).

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VLM
Most posts have been citations of authorities, or anecdotes WRT to perks and
stories.

Could I break the trend and make a simple request instead?

"Make it a gift not a reactive response to bad news".

I've never worked startups or dotcoms so all the perks I've experienced have
been in response to low scores on morale surveys and similar situations.
Frankly if morale is low due to terminal mismangement the only thing that
makes morale worse is "pop corn machine" or "mandatory PR kickoff meeting
after hours" or "offsite meeting" or "casino night" or "barbecue lunch day" or
"pizza day". Please find out why it sucks and fix it, don't just simply buy a
popcorn maker machine and call it good.

"Oh, so the problem is the boss couldn't lead starving wolves to raw meat but
he can't be disciplined because he's on his boss's golf team, well I know lets
have casual dress monday just this one time, I'm sure that'll make everyone
happy and productive"

It gets to the point where if you hear about a team doing a "perk" thing you
automatically start wondering how they screwed up or whats wrong.

"That dept is having free pizza day at lunch today" "Oh no, that's terrible, I
thought they were doing OK, whats wrong?"

------
pif
The most important part for me, as an employee, is what _I_ do at work. More
than how my company changes the world, I'm interested in what I'm asked to
change in the company. And, rather than than a project like: "Here are the
specs, when will it be done?", I prefer a lot: "Here is an idea, do you think
it can be done?".

------
eavc
I would suggest those who are interested in the literal psychology of employee
retention do some reading of the academic research on the subject.

There's an interesting review of the literature about job burnout, for
example, that was published in the Annual Review of Psychology in 2001.

[http://igitur-
archive.library.uu.nl/fss/2006-1104-200110/mas...](http://igitur-
archive.library.uu.nl/fss/2006-1104-200110/maslach_01_jobburnout.pdf)

I know that psychology isn't held in as high regard around here as the harder
sciences, but as much anecdote about the laws of human behavior as there is on
HN and in the startup scene in general, I'd think there would be more interest
in what science has to say.

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lars512
This article is really about the importance of the stories people tell
themselves, stories which explain how what they're doing now fits into some
greater purpose in their life.

Basically, it argues that as an employer, you can help people craft these
stories by trying to get people on board with the company's main goal, or else
to help people feel unique and interesting to others through a company culture
with strong perks or curious features.

This is really about career development too. Not so much in the sense of
onward and upward, but in the sense of helping people feel that this aspect of
their life has meaning and direction.

------
enraged_camel
I think perks matter if and only if they reinforce an existing positive
culture.

For example, I work for a medium-sized software company where employees tend
to be fairly athletic. We have groups of runners, surfers, soccer players,
tennis players and softball players. We have a licensed yoga instructor come
in twice a week for yoga lessons (paid for by the company). We even have a
group of people who participate in sailing races every week on the CEO's sail-
boat. This aspect of our culture makes it very easy for new hires to quickly
make friends and feel like they have become a part of the company. Also, all
of these sports are fully sponsored - all sport-related expenses can be
reimbursed.

Last year, management approved building showers on the first floor of the
building for the sole purpose of making it easier for lunch-time runners to
clean up before going back to work. The effect was immediate: many more people
started running at lunch time, as they no longer had to worry about being
sweaty and stinky after lunch. The showers themselves are a very small perk,
but they reinforce the perception that management cares about and supports the
active lifestyles of employees.

I somehow doubt having a "Whiskey Fridays" would have the same effect, as we
don't have many heavy-drinkers at our company. But one of my friends works for
Zappos (based in Las Vegas) and I'm told that everyone there drinks at work.
Makes sense, since it's Vegas.

------
thaisan
Great point. I think having a story is spot on. It's why founder's myths are
so enthralling to all of us and why having a concise and digestible message is
so important to a company. I work in the hiring space and I've come to believe
that recruiting is really the same thing as selling... It's the same idea
pitching your company and product to VCs or selling your product to consumers.
In all these cases, people want to know where they fit into the tapestry - why
should they buy your product, invest in you, or join your team?

Point 3, "These make for a unique story. A unique cult to want to be a part of
and more importantly tell people about." is also really interesting. The
companies with the best recruiting and team-dynamics are those that harness
these inclusive, cult-like cultures. You can see it everywhere, in little
things like team t-shirts, quirky events, or big things, like cult-leader
CEOs.

------
curtin
_formal dress up days_

For me, that would be opposite of a good retention strategy.

------
ruswick
They are forgetting the most powerful story of all:

"I am making a lot of money."

~~~
viscanti
"I am making ENOUGH money" is important, and different for everyone, but it's
not enough to retain top talent. There will always be someone willing to throw
more money at a great employee. Basing any retention policy on salary (beyond
making sure the salary is "enough") is doomed to fail.

For startups, equity is a big motivator, because the employee has some level
of control over how the company does. This allows the employee to dream of the
perfect beach house somewhere, that if they work hard enough, they will be
able to get. Even selling that dream isn't enough to keep the best talent.
There needs to be a good team in place, and tasks need to be delegated in a
way that employees are constantly challenged and rewarded by being able to
build awesome things. If those aren't in place, no amount of equity or salary
is going to make things better.

------
michaelochurch
"Advertising is based on one thing, happiness. And you know what happiness is?
Happiness is the smell of a new car. It's freedom from fear. It's a billboard
on the side of the road that screams reassurance that whatever you are doing
is okay. You are okay." -- Don Draper

I think that this quote hits on what most people want out of their careers.
It's not about million-dollar salaries or being the boss or "changing the
world". It's about validation. People are only happy in their careers when
they feel that what they've accomplished, relative to their level of ability,
is socially acceptable. Ambitious people, almost by definition, want to Get
Out of middle-class mediocrity, but that doesn't mean everyone has to get
rich. Being respected and famous or well-connected is enough for most people,
but most people don't even get that. The present-time proxy is prestige and
visible progress toward getting there. If you have a job at Google or Goldman
or DE Shaw-- _any_ job-- that's being on the putting green as most people see
it, but if you're not a brand-name company you have to keep reaffirming to
your people that you're capable of providing a ticket out of Blahville.

Startups give a reprieve from the traditional metrics. You don't have a lot of
money right now, but that's OK, because it's part of the process and the
story. No one has heard of your company, but that's OK, because people will.
They're very good at making people feel OK about what they're doing based on
the promise of future wealth and prestige. And because we're in a bubble,
startups are prestigious even among a crowd that (a) has no business being
involved (e.g. MBA-culture carpetbaggers who become founders on account of VC
contacts rather than ability) and (b) would usually find them risky and a bit
undignified. So right now it's fairly easy for a company to just say, "We're a
funded startup" and become prestigious overnight.

The ivory tower is phenomenally good at creating this validation: the money
isn't there, but "prestige" is. If you're successful in academia, you will
legitimately feel like you're living the best possible life-- a "life of the
mind". Finance can do the same thing: sure, there are people making $200,000
per year from lifestyle businesses in Madison rather than working 90 hours per
week and living in a Manhattan shoebox, but you, the IBD analyst, are just 4
short years away from getting face-time with Fortune-500 CEOs. When a work
culture develops the attitude that people outside of it are failures (cf.
academia, high finance, "biglaw") that's usually for the purpose of keeping
people captive. VC-istan is playing the same game, exaggerating the difference
between the life of a "corporate drone" and what it offers. (Note: if you're
not VP or higher in the startup, your work experience will _NOT_ be higher
quality than the corporate-drone life, the differences will be shitty health
benefits, no name on the resume, a lower salary, and no severance if you get
fired or the startup tanks.)

People tend to leave their jobs when they feel they can do better, because the
stakes of the career game (even up to what kinds of opportunities your kids
have and whether they'll be taken seriously by the world rather than being
another generation of middle-class meat for society to process) are so high
that it's just not acceptable to have an outcome below one's ability. You
don't have to take the highest-paying opportunity at each juncture, but if you
aren't re-evaluating every year or so whether you're at the best opportunity
possible for your age, experience, and economic environment, you're at risk of
falling behind, being labelled a B-player, and never catching up.

Most of these perks that seem like bullshit are actually about this validation
effect. No one ambitious would tolerate, after 5 years at a job, having to ask
permission to call a work-relevant conference a business trip (and be
reimbursed) or being turned down on an attempt to start one's own project, but
no one is going to expect to have that kind of support from the first day.
People want autonomy and resources, in the long term, and the perks are a
proxy: if they have nice pens, Macs, and free dinner on Day 1, they feel more
confident that the company will provide the resources to really accomplish
something and to live well by Day 1001.

~~~
crixlet
salient points. thanks!

