We need to hire more employees. Where should we find them – referrals, newspaper advertising, or advertising on the Internet?
Many of our good employees are leaving. What can we do to keep this from happening (or least decrease the number of employees who are leaving)?
We want to be the kind of company that attracts and keeps top talent. What 2-3 things can we do that are likely to have the most impact on our ability to do that?
Based on a recent Cornell-based research examining data from more than 300 small businesses, three HR strategies were related to increases in sales, higher profits, and lower turnover. These three strategies are:
1. Hiring for organization fit instead of job fit
2. Creating a family-like environment at work
3. Giving employees greater discretion, trust, and empowerment in their jobs
Those of us in HR have always known that certain “people practices” are more effective than others. We have, however, often had difficulty in finding research that supports our gut feel and anecdotal experience. In recent years, consulting firms such as Gallup and Watson Wyatt have examined the relationship between different HR practices and various indicators of organizational performance. These indicators have included employee satisfaction, customer satisfaction, sales, profits, and employee turnover. Much of this research has been based on data collected from large, multi-national organizations.
Recently, Christopher Collins at Cornell University conducted similar research focusing on small businesses. Collins and his colleagues used survey data from 323 small businesses to evaluate the extent to which small businesses used various HR strategies. They also used survey data to assess organizational performance and different organizational characteristics across the same 323 small businesses. Organizations in the study ranged in size from 8-600 employees. The average number of employees in the study was 53. Organizations in the study were located nationwide, however, some 30% of the businesses in the study were in Florida.
MORE ABOUT THE HR STRATEGIES
Hiring for organization fit instead of job fit. Most companies hire for job fit. The hiring manager identifies what knowledge, skills, and abilities are required to do the job. Then, that same hiring manager, in theory, hires the person whose knowledge, skills, abilities most closely match the job requirements. This approach to hiring, at its best, guarantees that you hire someone who CAN DO the job. This approach to hiring, however, does NOT guarantee that you will hire someone who WANTS TO DO the job for your company. That outcome is only achieved when you hire for organization fit. To do that, you must identify the knowledge, skills, abilities, and other characteristics that are required to succeed in your organization. You can then use the interview, tests, and other tools to evaluate an applicant’s fit with the organization. Remember, many people leave jobs because of organization fit issues (e.g., how he or she must do the job) rather than job fit issues (the specific tasks that he or she must do as part of the job). Also, it’s usually easier to train someone to fit with the job than it is to train someone to fit with the organization. As the research suggests, small businesses that hire for organization fit tend to have higher sales, higher profits, and lower turnover than those small businesses that do not.
Creating a family-like environment at work. Doing things that help employees feel more connected to one another is related to better organization performance. Offering profit-sharing programs, sharing information about the company with employees and sponsoring social events for employees are just some of the things that companies can do to create a family atmosphere at work. Creating such an environment helps employees feel more connected to one another and to the company. It also represents another, non-financial, form of payment that is not easily duplicated by another company. If your organization pays well but does not do things to make employees feel like family, employees are likely to be swayed to leave by money. There is always a business out there that is willing to pay more than you do. If money is all you have to offer employees, you’re always going to lose employees to the highest bidder. If, however, you’ve done things in your organization to create a family-like atmosphere, those things are much more difficult for another organization to duplicate. Employees who are considering leaving will think twice because they realize they will lose non-financial things that are important to them. Several years ago, the Gallup Organization found, based on survey results from thousands of managers, that the survey item “I have a best friend at work” was related to improved customer loyalty and other measures of organization productivity. Collins’ small business-based research appears consistent with the Gallup research. That is, small businesses that create a family-like atmosphere at work tend to perform better (e.g., have higher sales, higher profits, and lower turnover) than those small businesses that do not.
Giving employees greater discretion, trust, and empowerment in their jobs. Letting employees know what is expected of them, giving employees feedback on their performance, and involving employees in decisions that affect them are examples of what companies can do to give employees more autonomy in their jobs. Few people like to be micromanaged and top talent really don’t like to be micromanaged. On the other hand, many people don’t like to have to guess about what they should do on the job. Creating ways to clearly communicate work expectations to employees and to have greater levels of accountability and responsibility in their jobs results in more trust and other positive outcomes in organizations. Small businesses that give employees greater discretion, trust, and empowerment in their jobs tend to perform better (e.g., have higher sales, higher profits, and lower turnover) than those who do not.
AN IMPORTANT NOTE
The Cornell research reported in this article is correlational research. That means that the researchers collected data from small businesses about their HR practices and their organizational performance. They then analyzed that data using various statistical methods and found that these three HR strategies WERE RELATED to different indicators of organizational performance (e.g., sales, profits, and turnover). The results of this research do not suggest that these three HR strategies CAUSE better organization results. The results of this research do suggest that these three HR strategies ARE RELATED to better organizational results. It is suggested that you closely assess and monitor your organization’s performance before, during, and after implementing these HR strategies in your organization. By doing so, you will have a clearer idea about the specific outcomes achieved by using these HR practices in your organization.
Joan Brannick, Ph.D., SPHR is President of Brannick HR Connections, a consulting firm in Tampa, FL. She is also co-author of Finding and Keeping Great Employees, a Fortune Magazine, “Best Business Book.” For more information about this article, please contact Joan Brannick, Ph.D., SPHR at 813-672-0500 or visit her website at www.brannickhr.com 
