73. Motivation Up, Attrition Down

Intro: Duration: (04:04)

Opening music jingle & sound effects

Jeff Hunt:

Welcome listeners. This is Jeff Hunt back from a podcast sabbatical with a lot of excitement, not only about today's guests, but also about the amazing lineup we have coming today. We're going to talk about the correlation of motivation and employee attrition. When employee motivation goes up, attrition goes down.

Ultimately, another way of referring to this is employee engagement. I believe attracting and retaining the right talent can be the difference between achieving your vision or not. And to put it differently, the success of your business, the satisfaction of your customers, and even the reputation of your company, all hinge on the commitment and connection of your workforce.

The question is, how do you foster this engagement in a landscape where competition for talent is fierce and the stakes have never been higher? Today, I have a special guest joining me on the show to discuss all of this. Professor Matthew Bidwell from the Wharton School of Business at UPenn is a distinguished expert.

In career and employment patterns and received his Ph. D. from the M. I. T. Sloan school. His research explores causes and effects of short-term market oriented employment. And he's been featured in top publications, like the New York Times. Matthew has received the scholarly achievement award from the Academy of management.

And as a multi recipient of the Wharton Teaching Excellence Award, he's currently faculty director of the Wharton People Analytics Initiative. Welcome, Matthew.

Matthew Bidwell:

Thank you, Jeff. Very nice to be here.

Jeff Hunt:

Thanks so much for coming on the show. This is a kind of a fascinating topic that might feel a little ambiguous to some listeners. So I'm hoping that we can provide some clarity around this today.

Matthew Bidwell:

Sure.

Jeff Hunt:

I originally came across your article, which was titled motivation up attrition down. And it really caught my attention for a couple of reasons. One is because it's relatively brief. It's brief and it's also very pragmatic.

And I was reflecting on how leaders are so busy today. They don't have time and they, well, they don't make time often to read more scholarly or theoretical articles. And the fact that this was pragmatic and sort of actionable was refreshing.

Matthew Bidwell:

You mean when you hear the word professor, brief and pragmatic are not the two words that kind of leap into your mind.

It's not, not what you usually expect from us. That's probably fair. Um, probably particularly for me. You know, it's a, so that comes from a series, I think, nano tools for leaders. It's called the, we put out a Wharton. So we have a great staff that really try and take what we're doing, I think both our research and also just what we're teaching in the classroom and boil it down as much as possible to get the concentrated essence of look, seriously, here's what you need to learn.

So this actually we taught a course for leaders, one week course in the fall last year around, it's called something like leading tomorrow's workforce. Around these issues about how we manage people. And so this came out of that. Somebody saying, okay, let's just take this let's just boil it down kind of the key things we want people to know.

Jeff Hunt:

So, these nano tools for leaders Is this new sort of concept that you're employing in all sorts of different topics? Is that correct? So they'll be able to.

Matthew Bidwell:

Yeah, so there are a bunch of these. I'm not sure where exactly you find it on the website. I should spend more time looking on there.

But yes, there are a bunch of these. Exactly. Like you say. You could launch into the latest issue of the academy of management journal. I don't personally recommend it You know this kind of well I have no idea what these people are talking about and why it's taking them 40 pages to say it the idea is that this gives you kind of just the distilled look. This is the key point.

Topic 1. A thumbnail of Matthew’s career (04:05)

Jeff Hunt:

That's great. Before we get into the content I mentioned in the intro, start out by sharing with our listeners a short thumbnail of your career journey. How did you end up where you are now?

Matthew Bidwell:

Yeah, I bounced around. So, I started off my career, so You might have figured out I'm, I started in the UK.

I spent a couple of years actually working in what people like to call the real world, although arguably, um, I was a consultant. So I spent a couple of years at McKinsey. That was enough to persuade me that working is hard and maybe studying other people working might be easier. So I went off to MIT and did a PhD there.

And I studied topics around managing people, particularly actually there. I was very interested in issues around outsourcing, contract workers, those sorts of things, how organizations manage those. Following that, I did a four year stint in Singapore. I went and taught at INSEAD. I really, I don't know if any of your listeners spend time in Singapore.

I love Singapore. I thought it was a fabulous place. My wife was less enthusiastic. And so, we ended up back in the U. S. And we've been at Wharton for over 15 years now, which makes me feel very old. But it's been a great place to be.

Jeff Hunt:

I believe it. What a remarkable reputation. So, it must be wonderful being part of that.

Matthew Bidwell:

We get great resources, we get wonderful students, we're very privileged.

Jeff Hunt:

Was there anyone that really inspired you along your career journey, both in the quote, real world, unquote, and also in academia?

Matthew Bidwell:

You know, whenever people talk about that being the real world, I'm like, well, if this is a dream, then how come I don't look like George Clooney?

It doesn't feel quite fantasy like enough for me, but anyway. Many people, I mean, my academic advisors and, you know, different people inspire you in different ways. I think there were some of the people I worked with way back at McKinsey. You know, you get to see who the people are you want to be like.

And I think the ones, the ones who are a little more cerebral, enjoyed playing with ideas were just those I gravitated towards. I think that pushed me towards doing a PhD and my PhD, the advisors I hope to emulate are those who are kind of really focused on making a difference in the world, making a better place, and treating everybody with kind of kindness and respect.

So, one advisor in particular was just kind of extraordinary when it came to that. Some of my current colleagues, Peter Capelli has done a lot on HR topics and kind of, I really respect his ability to take kind of some of this very complicated academic stuff and make it useful for people.

Jeff Hunt:

Yeah, there's so much value there. And the amount of research that's available is truly staggering. It's just a matter of how do you actually take that and do something with it to effect change in the businesses that we run, right?

Matthew Bidwell:

Yep. Yeah. And then, you know, it takes a while to go out and figure out what's out there and how to apply it and so on. I understand most people have jobs to do.

Topic 2. Four factors that lead to job satisfaction (07:08)

Jeff Hunt:

Right. Exactly. Now, let's get into the weeds a little bit in this short article that you wrote. One of the things that you talked about was the 4 factors that job satisfaction derived from. What are those four factors? Can you share a little bit about them? Each one of them?

Matthew Bidwell:

Yeah. So I mean, they're probably to say that there are just these four factors is overly simplistic. There are hundreds of factors. So that, so that the reference I came to, so there is kind of again, getting into the Academic weeds because I like to hide out there. There's this survey, the general social survey that is carried out every year and it's been going for like 30 or 40 years and about every two years they ask like a representative sample of people about their bunch of questions about their jobs, including how much they like that job.

For a project I was working on, I started digging around in that. One of the things I was curious about is. Which job, which occupation has the happiest workers? So in which occupation do you find workers who are most satisfied? I don't know. What, what's your guess, Jeff?

Jeff Hunt:

Which occupation are workers most satisfied? That's such a great question. Artists? I don't know.

Matthew Bidwell:

Not a bad guess. I think they're reasonably happy. It's clergy, actually. Members of the clergy, which, yeah, wasn't my top guess, but it kind of makes sense. I was playing with that and one of the things was also just kind of boiling down.

There are all sorts of things about people's jobs, but kind of which of their answers really helped predict. Where the people are happy in their job and I kind of found four dimensions. Other people looking at it would break these up in slightly different ways, but for that really mattered. Kind of the single biggest impact on satisfaction seemed to be some combination of kind of.

The extent to which people are able to do a variety of different things in their job rather than always doing the same thing all the time. And related to that, their opportunity to learn. So people are much happier in jobs where they got to try different things, learn different things versus when it's monotonous.

And repetitive. Second factor that seems to play a really big role, and kind of you see this all over, is relationships. When people like their managers, like their coworkers, enjoy spending time with them, have a good relationship, they like going into work. When they don't have those relationships, they're not so happy.

Third piece, really important, is stress. And not having too much of it. So kind of, and you know, it's, you think there's often a tension there, right, that I think the jobs that are often the most varied and provide the most opportunities to learn end up overloading people. And so kind of, you might think this is, should be a good job, but everybody's miserable.

So finding that balance between I get to try lots of things and do lots of things, but. Not too stressed, not under too much time pressure, all of those sorts of things. Those are probably the biggest three. The fourth one, extrinsic benefits. Money does matter. Job security matters. Having good kind of benefits, it matters.

They're not the main drivers. So kind of if you want to know who's happiest in their job, don't start by asking about their pay. But they do matter a bit. Interesting,

Jeff Hunt:

So, when you look at these 4, it feels like from a leadership standpoint, the executive team could be looking at these 4 from a very strategic standpoint, correct?

So, for instance, they would need to measure and understand how they are doing in each of these core areas and then set forth some key initiatives. To improve, especially where they may be underperforming, correct?

Matthew Bidwell:

I think so. I mean, I think to the extent to which you have an engagement problem, then you want to look at kind of what the source of it.

I mean, another way of looking at it that I often use there's a professor, so I teach at the University of Pennsylvania, there's a professor in psychology there called Martin Seligman. He does a lot of work on happiness, kind of happiness in general, so I get to steal his work and go like, happiness in general, happiness at work, how different can it be?

He has this lovely framework which he calls PERMA. He is positive emotions, kind of we want to experience joy and so on. Take that for granted. The other four, the ERMA seems particularly relevant. The people are happy when they're engaged in what they're doing. So they're doing work that they're able to lose themselves in, that occupies their attention, that kind of pulls them in.

So we want to be engaged. Relationships. Like I said, then the other two are sense of meaning and sense of accomplishment. And so I particularly like that kind of as I think about, like you say, the diagnostics. So why aren't our people happy enough in what they're doing? Is it the work isn't very interesting?

Is it that they don't have good relationships? They don't trust their managers in particular. Do they find what they're doing meaningful? And are they able to finish the day or the week with a sense of personal accomplishment? I think those are, I was going to pick a few things to really focus on. Those are probably the ones I'd go with.

Jeff Hunt:

That's a great acronym. Very easy to remember. Yeah, so I like him. Thanks for sharing.

Matthew Bidwell:

He's a smarter man than I am.

Topic 3. Learning opportunities and variety (12:00)

Jeff Hunt:

So I want to dive a little deeper into each one of these. If you think of learning opportunities and variety. This is definitely something that requires intentionality from a managerial standpoint.

If I'm designing this job. With variety and with learning opportunities, the likelihood that my employee is going to be satisfied in that role goes up. I was reflecting on an example, which is Costco. If you think about Costco, their employees seem to be relatively satisfied. Now, this is not supported by any research or evidence, but when I go shop there.

They're always very kind. And 1 of the things I've noticed is they seem to have different variety in their job. So, if somebody is running carts, at 1 part of their day, they're not going to be doing that later. They're going to be doing something else. I'm wondering if that's a good example, and if you can think of other examples in the workplace, other companies or other examples that would be good to sort of demonstrate this.

Matthew Bidwell:

Yeah, I think that's right. Trader Joe's is another famous example of this. I don't know if you've been shopping at Trader Joe's. When you say people seem happy at Costco, when you're at Trader Joe's, you're like, what are they putting in the water here? Over the top cheerful. Yeah. And similarly there kind of through the day you rotate through different positions, try and get some variety.

I mean, I kind of, when you talk about kind of the, the strategic lens on this part of that, I think, is understanding there are trade offs. So, I mean, one of the challenges, why don't people have more learning opportunities and variety in their work? There are returns to having people specialize.

And so, I think, kind of, ever since Adam Smith writing about his pin factory, and, you know, kind of, you break the work down, everyone does the same thing over and over again. Yeah, they do get better at it. They get bored out of their minds. Mm hmm. Um, But I think this attention for organizations often, which is in terms of productivity, I want you to learn one thing and do that one thing over and over and over again.

Right. And that's very efficient, but then you end up with extraordinary attrition and kind of also motivation is rock bottom as you're trading that off versus kind of more variety. People probably not going to be quite as good at all the things they're doing, but they may enjoy it more and they may stay.

And so I think that is. That is the trade off that the organizations need to wrestle with I think we kind of in my area of the academy. We tend to have a sense that the world has been run by engineers for too long, right? And so it's easy or probably MBAs frankly some run by people with spreadsheets, right?

So it's very easy with that mentality to kind of try and kind of optimize by having everybody specialized to an incredible degree. And so I think it is taking that alternative lens and saying, if you want people actually to be engaged by what they're doing, we need to treat them as human beings rather than the machines becomes really important.

Jeff Hunt:

Very well said. So the next one that you mentioned was relationships with managers and coworkers. And from a leadership standpoint, once again, there are certain things that you could probably do, expectations that you can create for people that are managing to try to enhance those relationships. And then there's some things that are out of your control.

How coworkers maybe engage with each other. How frequently and what sort of types of conversations they're having. My take is that the relationship between the employee and the manager. Can be improved if the manager takes a genuine human interest in the employee, not just about what's going on in their work life, but also what's happening in their personal life. And I'm wondering if you have any reflections on that.

Matthew Bidwell:

I think even beyond that, just do they take an interest in them as a human being? It was interesting google. Probably about 10 years ago did this I didn't have heard of this project oxygen They did this project to try and understand do managers matter and if they do what are some of the things that the most effective managers are doing?

And so they came up with this list of kind of eight behaviors of highly effective managers But they're really defining highly effective managers as managers who keep their workforce engaged to keep attrition down all those sorts of things. I say that because what I found interesting when you look to that list of eight behaviors Three of them were really different versions of my manager cares about me, you know, my manager It's a good listener.

My manager is a good coach. My manager helps me with my career development I used to do when I was teaching rmba students. I would do a survey at the beginning of the semester, and I would ask like, What's the thing that a manager has done for you? In the past that you found the most motivating thing that they did you get I mean to be honest. We can kind of come to this later that the single most common answer was they gave me more responsibility they gave me ownership of a task and it really motivated me. But a surprising number of them said, my manager sat me down when we first met and asked me about my career goals and asked me, you know, where are you trying to get to, what do you want out of this job and committed to help me with those.

And, you know, one of the interesting things is like, I'm talking to MBAs. So. 80 percent of them have left their job for the MBA and not going back, right? And so if they had somebody said, I understand you're not going to be here forever. And when the person said, actually, I want to go to an MBA and leave, and the person didn't say, okay, you are dead to me, but instead said, okay, I'll write you a good letter.

Let's see how we can make that work. Those people were fiercely loyal. And so, yes, I think. Relationships are complicated. You don't need a therapist to help you understand that. We all have children. Well, many of us they're hard, but there are some basic things. And so we often think two, two ways I talk about relationships is sometimes as exchange.

And so in any relationship there is give and take like I help you you help me And the more exchange there is the stronger the relationship. And so like you say the more that the manager is providing in terms of emotional support in terms of caring about you in terms of supporting your career development and so on The more you're going to invest in the relationship as well the other way I sometimes talk about them is contracts.

It's kind of another kind of nice lens, which is to the extent to which we have that exchange creates those expectations about here's what I expect you to do And here's what I will do in return. Sometimes we describe them as psychological contracts. We do know that when those contracts are broken. When you know, I have expectations of my manager and they don't follow up with them It can be tremendously damaging.

So I think the other piece of, you know, how do we build strong relationships? A big part of strong relationships is trusting relationships. And it's being very careful not to violate that trust in various different ways. And again, we see kind of when nice studies are kind of talked about, when are people happy in their job?

The same survey has questions about when are you happy in your life? And it turns out that people who say they trust their managers, Report much greater life satisfaction overall. And so I think that trust is something that is a precious asset that we really want to guard at all costs.

Topic 4. Relationships, stress and productivity (20:29)

Jeff Hunt:

Which really makes sense because it's part of the human condition, regardless of whether you're a worker, it's a personal relationship, so it seems to make perfect sense that the next one that you had described was really about stress and trying to mitigate stress.

And I think. So many companies today are challenged with this, especially for managers, because it seems as though managers are under more stress today than they've ever been under, at least in the past 20 or 30 years. I guess my question is, how do we manage for that? Because there's only so much that you can do if you're dealing with a competitive.

Recruiting environment and significant competitive, pressures from a pricing and margin standpoint, you're trying to recruit top talent. You're trying to get, you know, maximize your shareholder returns, but also have a decent work life balance for your entire workforce. But especially managers, how do you juggle all of these balls effectively?

Matthew Bidwell:

It's really hard. And I mean, I. I think one of the things I find interesting about stress is too much stress is really very damaging, too little stress is not great either. I mean, we talked at the beginning about kind of, you know, this engagement with what we're doing, kind of being sucked into the work we're doing.

There's some evidence that we're most likely to be engaged when there's a good fit between the demands of the work that we're doing and our skills. Right? So, if what we're doing is easy, it's boring. If it's much too hard, we disengage because. It doesn't matter anymore. It needs to be at that middle level.

And so I think there is all these questions about kind of how do we target that? You're right. I mean, there are a lot of stresses in the environment. We might just say that's just the way the cookie crumbles, right? I mean, that's life. I don't think that's a smart answer. Like you say, if I'm sitting in corporate headquarters, it's easy to say, yeah, I kind of care about people's stress.

But at the end of the day, shareholder value is what we're being paid for and relaxing people doesn't pay the shareholders. Kind of does that. I mean, one of the, one of the things that alarms me most and kind of, complaining earlier about kind of we pay too much attention to people with spreadsheets often.

Kind of glibly, but really this challenge between what's easy to measure and what's hard to measure. And one of the things that worries me a lot is, you know, when I talk to HR managers, question I often ask is, do you know your cost of attrition? And everybody says no. We think it's very hard. I've never seen a very convincing analysis of it, but you see all these estimates of, you know, for professional managerial employees of You know, 100 to 200 percent of annual compensation.

And frankly, I think that those estimates are plausible. Right? That when you think partly about the cost of recruiting, but particularly the cost of getting somebody up to speed and kind of a lost productivity when you lose people then attrition is hugely expensive. Why, why am I going off on this tangent about it?

Because that's the cost of not dealing with stress. Right? That you worry if we reduce the stress that people are under, Yeah. It's going to cost us money. We're going to be doing less. We're going to be bringing in less revenue. That's true. The challenge is often that's quite easy to measure. The piece that's hard to measure is we do that and our attrition goes down.

What's the impact on our bottom line? And that is substantial. And so I think, I mean, one of the, over the last few years, we talk about burnout more than stress. I mean, kind of similar things. We often think about that. Again, this balance between what are the demands on people and what are resources that they have to address that.

And so, you know, a lot of research on burnout suggests if you want to reduce burnout, you want to think about both sides. So on the one hand, there is this, maybe we should ask less of people, like let's think of the 20 percent of their tasks that are least value added and just say, we're going to stop doing those.

But then there's a resources side and so kind of making sure people have emotional support. Make sure people have the training and skills that enables them to be more effective at work. And also giving people more autonomy giving them more freedom to decide what needs to be done when does it need to be done those sorts of things?

So I think those are a lot of the levers that we can pull to try and bring that stress down a little

Topic 5. Extrinsic benefits (25:16)

Jeff Hunt: the last one you mentioned is extrinsic benefits and that probably doesn't need a lot of conversation because You can pretty well figure out where should we be as a company relative to our peers, relative to industry, how can we be competitive? So that, and like you said it's interesting because people often think that it's the number one issue or the number one, desire for an employee, but it's not, it's further down the list.

Matthew Bidwell:

It does matter. I mean, when you're trying to predict attrition. Pay is less important than things like do people enjoy their job, but it matters.

I mean one thing I don't know what your experience has been but but one thing that I’ve heard from people more often than you expect is you know, we have an attrition problem because we pay less than our competition and we can't afford to pay as much as that as our competition. And I'm never quite sure what to do with that.

It's like, yes, you're going to continue to have a attrition problem. Come from an economic point of view. It's like, well, clearly these people are just more valuable to your competition than they are to you. And if you can't pay them what they're worth. You either need to figure out how to run your business without them or you need to ask if what you're doing is really valuable.

And so, yes, I think pay does matter. You do need to be competitive. I think obviously the last four years we've seen a lot of competition for workers. We're not used to seeing competition for, I mean, sadly, there has been if you look like 20, 30 years, frontline workers, corporations have treated them as disposable because there were always plenty more where they came from.

And over the last four years, there have not been plenty more where they came from. And so I think particularly there have been a bunch of employers that got used to this is a very cheap resource. And are really struggling to figure out what do we do when they're no longer a cheap resource and you've got to figure out ways to do your work differently.

I understand for an individual manager an individual small business this I just can't afford to pay this you kind of don't have a choice you're gonna have to figure out what you're going to do in order to do so because I don't think like churning through a In effect of employees is really the answer.

Jeff Hunt: It's a lot more costly at the end of the day. Yeah, no question. I love that. You brought up that example, Matthew, because oftentimes it is. It's easy to stop the conversation at the point where you say, well, we can't afford to pay our people that much as much as our competitors. It's easy to stop the conversation there when the reality is there are so many factors that you can look at within the organization.

If you zoom out, what are the ways that you can increase your margins as a result and have more profitability to pay people better? What are the ways that we can increase productivity internally? Let's look at other ways that we can enhance revenue streams that are profitable rather than just stopping the conversation right there. And that's going to benefit the company's long-term vision anyway.

Matthew Bidwell:

Yeah, I mean, put another way, I think when the price of gas goes up you figure out ways to adjust. You know, you don't kind of say we just can't afford to, to pay that. It's like, we've got to pay it. And now how do we use less of it? How do we find new markets? Are there things we, are we going to change the way we operate? It's not that dissimilar.

Topic 6. Lightning round questions (28:46)

Jeff Hunt:

Exactly. So, we're going to shift into some lightning round questions. Are you ready for that? Ooh, they're very simple. And most of them are kind of personal. So, the first one is what are you most grateful for?

Matthew Bidwell:

I live a very privileged existence. It's being professor at a business school is a surprisingly good gig.

Jeff Hunt:

What's the most difficult leadership lesson you've learned over your career?

Matthew Bidwell:

I'm still working on my upwards management.

Jeff Hunt:

Who is one person you would interview if you could, living or not?

Matthew Bidwell:

Oh, wow kind of very clichéd. I'd be fascinated to chat to Einstein. Just how did he think of those things? I would find very interesting.

Jeff Hunt:

That would be fascinating. Do you have a top book recommendation for our listeners?

Matthew Bidwell:

On the HR side, I certainly think kind of Laszlo Bock's work rules is kind of a classic and very useful along many of these topics. I recently read Range by David Epstein, exploring kind of some of the benefits of building out broad experience and really nicely written. I was very impressed with it.

Jeff Hunt:

Very nice. What's the best piece of advice you've ever received?

Matthew Bidwell:

It wasn't phrased in exactly this way, but focus on your strengths. There was a time time in my career when I was doing research in an area where I didn't have particularly strong skills. And eventually somebody went like, you know, you have all these really good other skills.

Why are you not spending more time using them? And it was one of those. Oh, yeah, moments.

Jeff Hunt:

Such a good reminder, isn't it? It's easy to sort of stay down that pathway and those grooves get deep. But if we just zoom out, sometimes the change makes sense. So, yeah, well, if you think about our conversation today and you had to summarize it, what would be a few of the main takeaways to leave our listeners with?

Matthew Bidwell:

I think it is very easy to focus on productivity and efficiency and we want to be productive and efficient and very easy to focus on costs. Those are all important things, but having a workforce that wants to show up every day and do good work is ultimately going to be a huge driver of those. And I think we don't think enough about how the ways that we try and drive productivity and efficiency often end up undermining our ability to reach those goals because of the effect on engagement.

Jeff Hunt:

Great conversation. Thanks for coming on the show today.

Matthew Bidwell:

Thank you very much for inviting me. It was a pleasure.

Outro (31:53)

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Jeff Hunt:

Thanks for listening to Human Capital, if you like this show please tell your friends and also take the time to go rate and review us. Human Capital is a production of GoalSpan, your integrated source for performance management. Now go out and be the inspiration to other humans, and thank you for being human kind.