The Value of Values: How to Attract and Retain Productive Employees with Strategic Values-Focused Management

The Value of Values: How to Attract and Retain Productive Employees with Strategic Values-Focused Management

This is the first in a three-part series. The original full-length article was published by CMA Canada's Management Magazine in August/September 2006.

Every organization, profit or not-for-profit, needs employees who want to work for it; customers who require its products or services; suppliers who want to supply to it and shareholders who want to invest in it. While this sounds like the most basic of goals, actually creating that bond takes effort and planning.

David Morgan, CEO of Westpac, an Australian financial services provider, understands how critical this connection is to his business. "By creating a place where people want to work, we have improved employee retention and we are better able to attract quality staff — a critical issue for a service business facing profound demographic changes and a shrinking workforce in the coming decades," he notes. "Motivated employees strongly and positively influence customer satisfaction. Customers feel good about doing business with a responsible and ethical institution. And the community lends its support to companies playing a positive local role."

The war to attract and retain the right talent is intense - newspapers regularly report on the shortage of workers. The intensity will only increase when the economy faces the "tipping point" of 2010 when more individuals will be leaving the workforce than entering it. Progressive organizations recognize this critical juncture and are preparing now to ensure they understand the values and expectations of the new workforce.

It is important to note the terms value and values have different meanings, Value, outside of its monetary definition, also defines a principle, standard, or quality considered worthwhile. In contrast values are commonly described as a person's beliefs, or the beliefs of a group in which individuals have an emotional investment. In the context of these articles value can be described as the most important attributes of how people conduct their work, whereas values can be described as decision-making criteria used by individuals to decide whether or not to work for an employer. Interestingly both values and valuable workplace attributes remain largely unmanaged, despite their obvious importance.

These articles will focus on how to engage employees through the use of a values-focused scorecard. This scorecard isn't meant to replace existing scorecards or be a definitive, stand-alone scorecard; it is simply an example of how some measures can be used to strategically align both values and valuable attributes in the workplace in order to attract and retain productive employees.

Below are the top-10 U.S. companies to work for as determined by Fortune magazine, which rates companies based on benefits, pay, turnover, status of women and minorities in the organization, as well as job growth.

  1. Genentech
  2. Wegmans
  3. Valero Energy
  4. Griffin Hospital
  5. W.L. Gore
  6. Container Store
  7. Vision Service Plan
  8. J.M. Smucker
  9. REI
  10. S.C. Johnson & Son

Besides being the best companies to work for, these organizations share another enviable attribute - consistent, superior financial performance compared to competitors.

Studies have shown the cost to hire, train, develop and integrate a new manager can be $50,000. Reducing turnover and being an employer of choice reduces the costs to hire and retain the right employees.
In the shadow of 2010’s shrinking labor pool, employers still have time to credibly address the liability of a values deficit, or leverage their values surplus in the next decade.

To use a nautical comparison, organizational leaders are in a similar position as ship captains because they each have two navigational choices in order to avoid known and unknown hazards. Captains can use tools such as sonar and radar to look below and above the surface, Leaders can use scorecards and other financial and non-financial tools that combine leading and lagging indicators. Alternatively captains and leaders can ignore these tools, choose destinations and hope they do not hit anything that will cause them to sink.

Most organizations manage approximately 30 percent of the factors employees and other stakeholders find valuable through traditional methods. The other 70 percent of the unmanaged factors are mostly intangible and non-financial factors, such as values. Bob Willard in his book The Sustainability Advantage describes this 30/70 split as the “Company Value Iceberg,” because the largest portions of icebergs remain below the surface, thus one can only see 30 percent of their actual mass. Correspondingly, the 70 percent of the traditionally unmanaged factors, which contain many elements of an organization’s future success, also remain invisible in most organizations.

Dr. Linda Duxbury, a professor at Carleton University’s Sprott School of Business, echoes this iceberg comparison "Companies like to talk about values but manage the bottom line. We’re starting to learn that these values actually improve the bottom line, so companies that sit on the sidelines during this shift are not going to be around."

The most important question employers must answer is, to attract and retain productive employees, which values and valuable attributes matter most to employees?

The second article in this three-part series will answer this question.

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David Crawford, CMA, CCEP, ([email protected]) is the market and technical services manager at Manitoba Product Stewardship Corporation. Todd Scaletta, CMA, MBA, ([email protected]) is an educator and partner with Scoperta Solutions, a management consulting company located in Winnipeg, Manitoba.