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The #1 Predictor Of Whether Your Employees Will Stay Or Go

by Linley Watson CEO Peak Performance International

Record numbers of people all over the world are leaving their jobs. As employees switch back into work mode after their holidays, smart employers are making retention an urgent business priority.


What your culture needs to get right

Recently published research by MIT Sloan Management Review (MIT SMR) provides useful insights on what is most important to employees when they are making their decision to stay or go.


Company culture is the single best predictor of employee satisfaction and it is one of the most important reasons why people stay with or leave their employer. But what aspects of culture matter the most to employees?


By far, the top predictor of whether employees love or loathe their company culture is whether they feel respected. Employees feel respected when they are treated with consideration, courtesy, and dignity, and their perspectives are taken seriously. Feeling respected is almost twice as important as the next predictive factor which is whether leaders are supportive.


In order of importance, other factors that influence how employees rate their organisation's culture (positive and negative) include:

  • whether leaders consistently live the organisation's core values

  • the prevalence of 'toxic managers' described as abusive, disrespectful and non-inclusive

  • incidence of unethical behaviour or a lack of integrity

  • benefits provided

  • perks and amenities offered

  • learning and development opportunities

  • concerns about job security

  • reorganisations and how they are perceived


Industry variants

In my 25+ years of working in or with corporates I have witnessed organisations at both ends of the respect/disrespect continuum and as the research points out, respect for employees varies widely across sectors. Those in industries with a high percentage of professional and technical staff tend to feel more positively regarded, whereas those in industries with a large number of frontline employees fared the worst. Feeling demeaned and degraded, being treated like a child or second-class citizen, feeling like a disposable cog in a wheel, a robot, trash or an idiot is how some described their experience at work.


Disrespect in action

Lack of respect shown to others or feeling disrespected is at the root of much poor behaviour in society and in organisations of all types and sizes. Feeling disrespected affects people deeply and can have detrimental and long-term repercussions on employee mental health and wellbeing and business outcomes.


In an example close to home, my twenty-something daughter was on the receiving end of an unacceptable exchange on the last day of work before heading off for the Christmas break. One of her three bosses came into the staff room, slammed the door, sat opposite her and proceeded to air his ill-informed grievances by yelling, clenching and unclenching his fists and shutting her down when she tried to speak. Having been through Airforce training, she has experienced and survived similar tactics but later commented to me that she had never felt so disrespected in her life.


The experience certainly made her question whether she was valued and mull over her options during the holidays. In a larger organisation, she may have some recourse through the human resources department. In a small start-up such as this, there is no such luxury. This owner/manager’s legendary tantrums will continue to go unaddressed, undermine their culture and ultimately the organisation’s success, as staff come and go.


Far from an isolated workplace incident, this type of behaviour is hiding in corners, couched as jest or in some instances flagrantly exposed as “the way we do things around here”. Employees are voting with their feet and oblivious employers are paying the price.


Top leaders drive culture

There is a maxim that “people don’t leave companies, they leave managers” which puts the onus on immediate managers or supervisors. However, this MIT SMR study found that the collective assessment of leaders at the top of the organisation is twice as important as a predictor of how employees rate their organisational culture. As those in the C-suite are responsible for the big and important things that affect culture, employees appear to assign more of the credit or blame to them, rather than their immediate boss.


When it comes to leaders living their organisation’s values, employees are cynical and complain that “managers pay lip service to core values”. On the other hand, when leaders’ behaviours are consistent with the organisation’s core values it provides a big boost to their culture rating.


The value of respect

Cultural analytics company Barrett Values Centre tracked the most commonly occurring personal and organisational values from Cultural Values Assessments done in Australia and New Zealand over a nine-year period from 2010-2018. Respect was the second most important personal value behind honesty, as voted for by 131,250 respondents in 215 organisations, across 32 industries.


The human need for respect is universal and it may be even more important for the younger generations. In a 2021 culture study done by my company Peak Performance International in the education sector, respect was found to be of significant importance to senior high school students. From almost 1000 responses, respect was the only core value that made the top 10 across all three categories being measured. It was an important personal value for the students, they felt respected within their school culture and they considered respect a desired value in the future.


Nurturing a respectful culture

Navigating the pandemic-affected return to work is fraught with myriad challenges. With unemployment rates low and employers scrambling for staff, quitting is likely to be the easiest and most attractive option for many who do not feel respected and supported.


Nurturing a respectful culture is common sense but is it common practice? Given the importance and downstream impact of employees feeling respected - or not, leaders are remiss if they take respect for granted in their organisation. Here are some questions to ponder:

  • Do you consistently demonstrate self-respect and respect for others?

  • What does respect look like in your organisation?

  • Do your people feel respected? How do you know?

  • What do you do when you see disrespectful behaviour? What are the consequences?

  • How can you show more respect and support for your people?


Paraphrasing the lyrics of Aretha Franklin’s hit song R-E-S-P-E-C-T, the key is to find out what respect means to your employees and give them ‘just a little bit’, or you might just walk in and find out they’re gone!


ACTIONS

Read the full article 10 Things Your Corporate Culture Needs To Get Right that includes the MIT SMR/Glassdoor Culture 500, an annual index and research project that uses over 1.4 million employee reviews to analyse culture in leading companies, along with new research focused on measuring organisational culture using a scientific approach.


Check out the rousing Blues Brothers 2000 – Aretha Franklin – Respect clip on YouTube.


Contact Peak Performance if you’d like help to build a more respectful, supportive and values-driven culture.


#organisationalculture #companyculture #thegreatresignation #corevalues

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