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Reduce Turnover In Your Organization

Wednesday, March 06, 2013

Understanding the power of purpose is crucial to Getting FIT. When a company or organization loses its fundamental purpose, the effect trickles down to the staff. Productivity shrinks, teams collapse, and disgruntled employees bide their time until a more suitable position opens up elsewhere. 

 Is there anything more exasperating for a CEO or president than being at the helm of a sinking ship? Many years ago, I joined the management team of a large consumer goods company under similar circumstances.

When I arrived at the plant, morale was low and turnover was high and the hourly associates were dropping like flies.

Work-related accidents were occurring at an alarming rate, and product quality control was a major problem. In my first meeting with the plant manager,  I anticipated a man exasperated about the plant's declining condition. Instead, he disclosed a shrewd business technique that accounted for the whole unhappy lot of his employees.

He began by saying, "I'm saving the company money", which seemed fair enough, until he explained how. The associates were paid an hourly rate that increased over the first year of their probationary period with the company. He explained that if he could keep his associates from making it through their first year, he wouldn't have to pay them the higher rate they earned.

This plant manager meant to perpetuate his own turnover problem, as if it were some fiscally responsible new management technique!

No one cared about their role within the plant, and it showed. The management had not expressed an interest in the individual contributions of employees and how they mattered  to the team. This cost the company much more than the manager believed it saved him fiscally.

When our employees and associates lose their sense of purpose in the workplace, we must accept our role as leaders to help them find it again.

I spent the next few months developing an organizational purpose statement for the company--a reason for being and how this supported the corporate vision.  The plant manager and I established acceptable and unacceptable cultural norms. We published a set of shared principles that the employees felt passionate about. Then we established people goals for reducing turnover, improving safety and intensifying the engagement of hourly associates at work.

The plant manager and I placed a visual performance board in the common areas around the plant to track key performance indicators. We ranked the importance of the plant's goals, from left to right indicating how the company aligned its commitments. Naturally, people came first followed by products, then profitability as outlined below:

1.) People.

2.) Products.

3.) Profitability.

The culture of this plant shifted from its singular focus on budgets and productivity to an atmosphere where people found meaning in their work. We created Fully Integrated Teams around various processes in the plant, and explained to people why we were taking a different approach.

The result? Turnover dropped by 80 percent, product quality and customer services were enhanced, and productivity shot through the roof!  The company cared for its people and the people cared for the company. Fully Integrated Teams address the lack of purpose and direction found in the twenty-first century workplace. People don't want to work for the paycheck but for the sake of a team that enjoys being together. Subscribe to our FIT Newsletter for exclusive tools and other free assessments on how to improve your organization!

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