Competitive Advantage: How to Retain Your Best People

Think you have to pay more to hold on to your top performers?

Think again, says Vistage speaker Barry Deutsch.

“Losing great people is not about money,” he suggests. “Instead, it’s all about work, contribution, personal development and personal growth. The very best talent will often take a lesser compensation package if they have the opportunity to learn, grow and become something better. In most cases, money becomes a factor only when you pay below market wages.”

According to Deutsch, retaining top talent requires a process called “success retention,” which consists of four essential elements:

1. Defining success
2. Success-factor methodology hiring
3. Establishing a world-class culture
4. Offering rewards and recognition that tie to success

Do these four things on a consistent basis, says Deutsch, and you will significantly reduce employee turnover, especially among your top performers.

Defining Success

To hire and retain top talent, which Deutsch defines as the top 25 percent of performers, set very clear expectations of success and then use those success standards to:

• Recruit the right person for the job
• Validate that they are doing the work correctly once they are in the job
• Ensure that they remain motivated to do the work

How do you set clear expectations of success? Start by writing a good description of work based on Deutsch’s methodology of defining Success Factors, called “SOARing”:

1. Substantial departmental goals
2. Obstacles to be overcome
3. Actions that need to be taken
4. Results and metrics

Define the major challenges (substantial departmental goals) you’re currently facing in the job, then identify the obstacles that need to be overcome to resolve those challenges and achieve the major goals of the position.

Next, define the implementation part of the job. What actions must be taken to produce the desired results? Finally, identify how and when you will know when you achieve the goals (results and metrics).

“Stop thinking about tasks and activities in a job and start focusing on deliverables, accomplishments and results,” advises Deutsch. “Define the six or eight key elements that someone has to master or do well to successfully perform the job. For each of these substantial departmental goals or objectives, apply the SOAR methodology to create Success Factors that define what must be done in each area. In this way, you come up with quantifiable, success-based goals and objectives that can be used to define and measure success.”

In addition to clear standards of success, top performers also want a supervisor who helps them learn and grow. This requires dedicating a portion of your training and education budget to enhancing the skills of your front-line managers so they can become better mentors for your top performers.

The greatest leverage in your organization, suggests Deutsch, will come from training your front-line managers to become outstanding coaches.

Success Factor Methodology for Hiring

Retention starts with hiring the right people in the first place.

To hire effectively, Deutsch recommends using their Success Factor Methodology™ process, which includes the following steps:

1. Build the Success Factor Snapshot™. The Success Factor Snapshot ties an individual’s performance to the company’s operating plan and helps ensure that the employee achieves the key results required by the position. It clearly defines what the new employee must achieve during the first twelve to eighteen months and dramatically increases hiring accuracy.

   The six to eight key Success Factors listed on the Success Factor Snapshot are defined through the SOAR methodology described above. This document replaces the traditional job description and becomes a dynamic tool to drive managerial processes around hiring and success management.

2. Develop a sourcing strategy. Based on the Success Factor Snapshot, create a Compelling Marketing Statement that will appeal to and attract top talent. Identify the best formal and informal sourcing networks, and develop a thorough sourcing plan that identifies specific channels where highly desirable candidates may be reached.
3. Conduct Success Factor interviews. Using the Success Factor Snapshot, use five core questions that determine who can do the job and who will best fit the company’s culture and working environment. This step helps separate the best performers from the best interviewers and uncovers the true success potential of each candidate.
4. Assess the candidate using an effective scorecard. Pull together all the information from the various interviews into a structured scorecard (Deutsch’s methodology uses an “Eight-Dimension Success Matrix”) that allows an “apples-to-apples” comparison among the final candidates.
5. Validate the information collected in the interview. Use homework assignments, deep reference checking and work style and communication assessments to verify what the candidate told you during the interview.

“No system can guarantee the right hire every time,” notes Deutsch. “But these five steps will provide a systematic business process that dramatically raises your hiring accuracy of top talent.”

Establishing a World-Class Culture

Top performers want to work in an organization with a great reputation. They want to feel excited about working for you. They want to buy into the company’s philosophy and values and feel a level of ownership. Your challenge as CEO consists of creating a culture that meets these needs.

According to Deutsch, building a culture that attracts and retains top talent starts with creating a culture around success. He recommends the following:

1. Change your job descriptions. Instead of job descriptions that identify tasks and activities, use Success Factor Snapshots that focus on measurable results and outcomes.
2. Discuss expectations with employees. Tell employees what needs to be accomplished on the job and allow them to help you define their performance expectations. Then talk about those expectations in one-to-one coaching sessions on a regular basis.
3. Create the scorecards. Each person should have six to eight key factors that they must accomplish in order to achieve success. Track and measure these items on an ongoing basis.
4. Understand that top performers want to continually learn and grow. When their personal learning curve starts to flatten out, top performers will try to change the job around them (e.g., take on new things) or they will leave. Pay close attention (by asking during your one-to-one coaching sessions) to where your top employees are on their personal learning curve.

“In addition, get rid of traditional annual performance appraisals,” advises Deutsch. “They’re painful for employees and managers, and they don’t accomplish anything useful. Instead, use the Success Factor Snapshot as an ongoing tool in managing individual success over time. When you define success, measure it, and hold people accountable for delivering it, your top performers will stick around.”

In addition to creating Success Factor Snapshots for every individual in the organization:

• Hold your managers accountable for “walking the talk.” Make sure their actions are consistent with the words on your mission statement and your corporate values.
• Insist on open communication. Allow people to challenge you in order to encourage others to rise to the next level.
• Build learning and growth into the culture so that people feel good about themselves and their jobs.

“Success and culture are inextricably linked,” adds Deutsch. “It starts with defining success and then using the culture to reinforce that performance. Once you have the key elements in place, you can use your culture as a recruiting and retention tool.”

Rewards and Recognition

Deutsch believes that the most powerful reward for top performers is the opportunity to work in a compelling job, one that offers plenty of challenge, learning and growth while allowing the individual to feel that they are having an impact.

Beyond that, there are all kinds of ways to recognize and reward employees. The key is to set up systems and processes that ensure employees receive the amount and type of recognition they want rather that what you think they want.

“To retain top performers, put them up on a pedestal,” suggests Deutsch. “Set them up as role models so that others can emulate their behaviors. People want to feel good about what they’re doing, and when you recognize and reward their performance, they will rise to the next level.”

Success Factors Snapshots = Better Retention

Ultimately, suggests Deutsch, defining a Success Factor Snapshot for each position becomes the hub for all other retention strategies.

“When you clearly define success, you can use it to attract, recruit and hire the best talent in your industry,” he concludes. “Once you have the right people on board, it then becomes a performance management tool that helps to create a world-class culture of excellence and high performance.

“The key is to anchor success with effective rewards and recognition systems and build your training and coaching programs around it. In particular, make sure to compensate people based on the key success factors in their Success Factor Snapshots. If your compensation package doesn’t align with expectations, you won’t get the culture or the results that you intend.

“When you have a culture of success, reinforced by a solid compensation program, learning and growth opportunities and meaningful work, people — including your top performers — have no reason to look anywhere else.