Should You Reward Managers With Low Turnover?

I know, you look at this one and automatically say, "of course"!!  After all, low turnover is good, high turnover is bad.

On second thought, maybe rewarding low turnover isn't such a great idea.

I was prompted to pop a post on this topic because of a line I saw in the whitepaper recently released by The Workforce Institute on the role of Front-line Managers in retaining hourly workers.  Here's Action Item #2 from the paper:

"Action Item #2 - Penalize or move managers who generate excessive turnover"

Now, I'm going to agree with part of that statement - you should find a solution for the manager who is clearly generating excessive turnover over time due to his or her style, issues, etc.  If you can't coach them up, or develop them, then you probably need to get them out of that role.

But penalize managers/departments who generate light turnover?  That sounds like you are ready to reward managers with low turnover.  That's the wrong way to go, and here's why:

1.  All Turnover is not created equal.  Some is good, some is bad.

2.  Low Turnover doesn't mean your employees are engaged, care about your mission, or are contributing to the cause...

3.  Penalizing or rewarding turnover stats is a sure way to make managers manage the stats rather than their teams.

4.  When managers try to appease employees who shouldn't be driving the agenda, guess what happens?  Your best employees see it, get appalled, and start looking for other gigs,  which means the turnover you do have may be the worst possible kind - your stars leaving you....

Those are my reasons not to penalize or reward based on turnover stats.  I'm all for managing someone who has a problem, but systematically rewarding or penalizing based on voluntary turnover? 

That's an agenda that has a lot of holes....

Comments

[Ask a Manager]

So true. In fact, in some cases, low turnover can indicate a manager isn't doing his/her job and not moving out low or mediocre performers.

[chris]

Another one-size-fits-all recommendation. Of course there's problems with it. One problem with the Workforce Institute's recommendations is that they appear to be based solely on driving cost reduction. Sure, the document gives some lip service to the benefits, but they themselves say:

"Outlining a methodology for accurately calculating the payoff of retention is beyond the scope of this chapter."

Which basically means they've only solved half the problem.

[Donna Van Gundy]

I think we should always be talking about optimizing turnover- analyzing turnover by performance rating to see if we're losing our best or if we're encouraging those who are not a good fit to move on-- otherwise, as you point out, we're going to end up with a lackluster group of employees.

[Joyce Maroney]

Thanks again for the insightful post and comments. In fact, we agree with you that not all turnover is created equal. We wrote a prior white paper on that topic to kick off the series which you can find at:

http://www.workforceinstitute.org/wp-content/uploads/2008/02/Intro-to-book07.pdf

Please visit and let us know what you think of our content and direction.

Thanks!
Joyce Maroney

[Steve Roesler]

Thoughtful take, Kris.

It prompts some thinking about how things get measured and why, as well as bad assumptions that prompt "conventional wisdom."

Low turnover on its face looks like motherhood and apple pie; underneath, it could obviously have lots of ramifications.

This is the kind of measurement that should be explored in meetings when casually tossed out as gospel.

[Scott Lewis]

33% of this conversation is missing. How are you measuring those same managers on making good hires in the first place?

Don't give them good grades for pushing out bad performers if they are the ones hiring them in the first place.

Manager-tools.com had a good podcast on managers' talent scouting averages that seems to fit here: http://www.manager-tools.com/2008/04/the-manager-tools-talent-scouting-averages/