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What makes employees loyal

March 29, 2007 08:53 IST

For some, the decision is the result of a bitter fight with a boss. Others win the lottery, get a better job offer or leave because a spouse is transferred to another city.

But a recent review of 15 years of research on employee job satisfaction and voluntary job turnover shows that employers might be better at retaining workers if they focus less on what makes people quit and more on what makes them want to stay.

Thomas Lee, professor of management at the University of Washington and president-elect of the Academy of Management at Pace University in New York, says leaders should realize people may be leaving their positions for reasons that have nothing to do with being unhappy.

But focusing on building a social network that makes people feel like they fit in can prevent them from quitting and potentially save the company the expensive loss of institutional knowledge.

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"Most companies should very seriously think about the value of creating a community," says Lee, who, with UW professor Terrence Mitchell, conducted the review, the results of which appeared in the February issue of Current Directions in Psychological Science.

Embedded At Work

People begin to feel this sense of community, or "job embeddedness," when their work matches their personality--for instance, a creative person who has outlets to express him- or herself.

It also happens when people feel a sense of interdependence with their co-workers or within their communities, such as a recognition that other people may not be able to get their jobs done if you don't do yours. Or when that person in the office who has accumulated eight weeks of vacation doesn't take it all because they feel they'd cause too much disruption.

Or maybe they're heavily involved in activities ranging from Little League to Kiwanis and wouldn't want to break up their family's social network by relocating.

Last, it's a matter of the strength of people's individual connections to a company and the sacrifice they feel they'd be making by moving on. Maybe their 401(k) is nearly fully vested or they've got a great parking space and a cushy, corner office. Lee says that in Seattle, they call it the "Mount Rainier effect."

"On a sunny day, you see Mount Rainier, Puget Sound; people are out boating," he says. "You're really an outdoors person and you have a wonderful job. You are comfortable in that location. The cumulative effect of all of these pressures keeps you enmeshed."

The Flip Side

Of course, this kind of focus won't work for every boss, company or industry.

"Turnover rates in general are a very dangerous statistic for leaders," says John Boudreau, professor at USC's Marshall School of Business and research director of its Center for Effective Organizations.

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While many assume high turnover rates are bad, they can also be helpful by bringing new blood into a company and winnowing out people who don't quite fit. It all depends on the situation.

But if voluntary turnover and the brain drain that may accompany it is a concern, there are lots of things companies can do to make employees want to stay. Highlight the perks of your organization's benefits system, or offer services that cater to your employees' specific needs, like day care or career counseling.

Get employees involved in community groups by offering discounted memberships or just providing them with contact information, Lee says.

"Just by making that kind of contact a little easier, you tie them to the organization," Lee says. "You make them feel wanted."

Allison Van Dusen, Forbes