Turning Turnover Into Retention

Transcription

1 Turning Turnover Into Retention An exploration of exit interview best practices By: Margot Baill, MA Product Development Director

2 Introduction The costs of employee turnover to an organization are undeniable (McKenna, 2007). As a result, literature on employee satisfaction has become increasingly available. The field of Industrial and Organizational Psychology revolves much of its efforts around the study of employee motivation and the reasons why people choose to stay at their jobs. The literature has successfully identified several organizational factors that generally contribute to employee retention, such as employee autonomy, availability of feedback, a culture valuing personal development. But, because each organization is unique in its purpose, structure and culture, finding the best way to improve retention based on the specific demands of an individual organization can be difficult. In order for a single organization to address the reasons why its employees choose to leave, it ought to have a way to assess organizational problems as perceived by its employees. Many organizations use the exit interview, a formal procedure used to let employees voice their opinions of the company and reasons for leaving. (Giacalone, Knouse, & Montaglaiani, 1997). While these interviews universally serve as some form of closure for the employees, their effects on organizational improvement can differ depending on how they are facilitated, measured and used (Hutchinson, 2002). This paper will explore exit interview best practices in hopes of discovering an effective way to turn turnover into retention. The Nature of exit interviews Exit interviews can be a powerful tool to organizations because they can capture information that may not have been revealed while the employee was still employed. Not only do exit interviews reveal individual reasons for leaving, they can also reveal organizational trends in turnover. For example, an organization that loses several key employees in one particular department could use exit interviews to discover that a sensitive issue with intradepartmental communication had ultimately led multiple employees to quit. If the exit interviews are carried out in a way that elicits valid and measurable responses, the company can address the problem of intradepartmental communication with evidence of its repercussions. Nevertheless, the nature of an interview requires elicitation of self report data, which yields the potential for biases, especially in the instance of exit interviews. Many companies refrain from using exit interviews because the sample (exiting employees) is not diverse, which automatically creates biased results (Demars, 2007). Lack of motivation, fear of repercussions, retaliation and lack of anonymity are several reasons why employees are motivated to provide biased responses on exit interviews (Giacalone, Knouse, & Montaglaiani, 1997). It is also thought that the mode and timing of an exit interview can affect the accuracy of information (Hinrichs, 1975). Ideal Facilitation of Exit Interviews There are, however, several ways companies can control for biased responses. Much of the research addresses different ways to ensure anonymity to the employee. The more protected the employee s identity, the more information they are willing to reveal since nothing will be held against them. One study found that when an exit interview was conducted by company management, issues of employee satisfaction were not reported. When the same interviews were conducted by an outside consultant, exiting employees revealed significantly more sensitive issues (Hinrichs, 1975). 1

3 Evidence also suggests that an employee will reveal accurate information depending on his or her general perception of the organization. If exiting employees feel that they have been historically treated well and honestly by the company, their reports will be honest. Conversely, when exiting employees feel they have been extremely mistreated, they are often motivated to be candid despite the possible repercussions of their report (Giacalone, Knouse, & Montaglaiani, 1997). Similarly, the method of exit interview can affect answers. While the most frequently used methods are face to face and take-home questionnaire (Hutchinson, 2002), some organizations have begun the use of online exit interviews. Since Fifth Third Bank adopted the use of WebExit from Nobscot Corp. (a web-based exit interview tool), the company reports getting higher quality information in an efficient manor from exit interviews. Teresa Tanner, vice-president of Human resources commented, Because it s from an outside vendor, employees feel that their confidentiality is secured (Valentine, 2005). Any form of questionnaire tends to be cheaper and take less time than a face-to-face interview. Despite their cost in time and money, face to face interviews are seen as the most beneficial to the exiting employee because he or she has a chance to be heard (Hutchinson, 2002). For the organization, the benefits of face to face over questionnaire (online or take-home) are a more in depth assessment of the core reasons an employee left the organization. Due to the personalized questions of an experienced interviewer, a semi structured face-to-face interview can uncover the root of a problem when a questionnaire could not (Hutchinson, 2002). When possible, a combination of face to face and questionnaire may be best. Ideal Measurement of Exit Interviews The answers to exit interview questions best be categorical and consistent from time to time so that they can be interpreted appropriately (Valentine, 2005), or statistically analyzed. This poses a problem for face-to-face interviews that ask unstructured, open ended questions. This type of interview elicits information that is unique, and therefore, it can not be categorized for comparison with other exiting employees. Research suggests that the information gained from exit interviews is only useful to the whole organization if the answers can be compared with other exiting employees to find trends (Giacalone, Knouse, & Montaglaiani, 1997). When the Nebraska Department of Correctional Services asked the Center for Applied Psychological Services at the University of Nebraska to evaluate their current exit interview process, they were given several pieces of advice. First, they were told to eliminate the answer option, Other, on the questions that asked employees to check their reason for leaving because it would not evoke enough information. Next, they suggested the creation of many more answer options with very specific reasons for leaving. After coming up with 54 rating-scale statements (such as I feel that I was treaded unfairly by my boss ) they suggested adding three open ended questions regarding suggestions for the company, from which answers would be grouped into one of six categories for analysis. The results of the exit interviews were then easily analyzed and measured (Layman Et. Al., 2007). 2

4 Ideal Use of Exit Interview Results In order to turn exit interviews into an effective mode of organizational improvement, their analysis must be put to use. Surprisingly, a survey of CEOs in America reported that while 81% regularly conduct exit interviews, only 17% always or somewhat frequently use their results (Demars, 2007). Other literature suggests that organizations use the results of exit interviews on an individual basis, viewing each interview as its own story rather than as a part of a turnover trend (Valentine, 2005). The results of this survey and a review of the literature suggest that more research is needed regarding the organizational use of exit interviews. There are, however, organizations that effectively use their exit interview results to identify problems on a larger scale. Web based exit interviewing has made understanding company turnover trends easy. Now that Fifth Third Bank uses Online exit interviews, its Human Resources department runs reports each month on each department to find out the top reasons why people are leaving at that moment (Valentine, 2005). Other companies use data analysis from answer categories to find out trends in turnover. After the Nebraska Department of Correctional Services perfected their exit interview, they were able to detect a turnover trend: employees were leaving largely because their concerns were not dealt with by the management. The company took the information to create an ongoing Leadership Development Program for its managers. The organization has significantly improved retention of its employees as a result (Layman Et. al., 2007). Implications for Organizations that Want to Improve Retention Organizations can effectively use turnover to improve employee retention, if done right. Depending on its available time, money and size, an organization can use structured face-to-face interviews with categorical answers, or web-based questionnaires with specific rating questions to elicit honest information during exit interviews. To reflect best practice and increase validity, exit interviews might be conducted by an outside consultant or group. Successful organizations aim to keep information as anonymous as possible, and ensure that exiting employees know the purpose of the exit interview. Using exit interviews in an effective way requires analyzing results data in search of trends. Singularly reviewing each exit interview may improve small-scale problems. But, analyzing trends in exit interviews assesses the organization as a whole. If used correctly, exit interviews have the potential to detect departmental problems, managerial problems and larger-scale organizational problems. Once a company accurately identifies a turnover trend, it can begin to address the larger issue with a good chance improving retention. 3

5 References Demars, L. (2007). Parting Shots. CFO, 23(2), Feburary. CFO Publishing Corporation. Extracted from Business Source Elite Database. Giacalone, R.A., Knouse, S.B., & Montagliani, A., (1997). Motivation for and Prevention of Honest Responding in Exit Interviews and Surveys. The Journal of Psychology, 131, Hinrichs, J.R., (1975). Measurement of Reasons for Resignation of Professionals: Questionnaire versus company and consultant exit interviews. Journal of Applied Psychology, 60, Hutchinson, A. (2002). Exit Interviews: A missed opportunity for the compliance professional. Journal of Health Care Compliance, March April: Layman, M., Farris, L., Reiter-Palmon, R., Gallagher, E., & Williams, S. (2007). Making Exit Interviews Useful to a Correctional Agency. Corrections Today, 69, McKenna, T. (2007). The Turnover Conundrum: Understanding the revolving door. NPN Magazine, April, 15. Valentine, L. (2005). Making an Informed Exit. ABA Banking Journal, 97,