| "Employee X" wrote an eye opening article in the | | | | Lessons to be Learned from this Story |
| January '09 Entrepreneur Magazine, titled "Why I Finally | | | | 1. Company A could have successfully retained |
| Quit." Employee X, wishing to remain anonymous, is "a | | | | Employee X if they had held on to their team oriented |
| bright, 28 year old employee with a degree from a top | | | | corporate culture which fostered trust, sharing, |
| university and a ton of high-level computer experience | | | | openness, growth and hard work that was |
| [who chose to] bail on the Company he really believed | | | | acknowledged. |
| in." He was willing to accept a salary "$20,000 below | | | | 2. Instead, Company A's lack of effective |
| market rate with pretty pathetic benefits while working | | | | Compensation Planning and Proactive Performance |
| up to 60 hours a week in a high stress environment." | | | | Team Building lead to a situation where a happily |
| Why He Took the Job | | | | underpaid, hard working, talented employee base went |
| 1. He was part of a team that would create a | | | | looking for greener pastures. |
| revolutionary product. | | | | 3. As illustrated, retaining talent isn't about pay. It is |
| 2. Had strong incentives to help the Company achieve | | | | more about contribution to the Company's success; |
| success with a Stock Option Plan. | | | | progressive compensation structures; open |
| Why He Left the Job | | | | communications; trust fostering culture; team oriented |
| 1. Owners hired new managers from the outside and | | | | success; investment in an individual's growth; and |
| the corporate culture completely changed. | | | | smartly placed perks. |
| 2. The trust employees had built together was | | | | Conclusions |
| immediately extinguished by constant distrust and | | | | The Central Point of this article: Compensation Planning, |
| monitoring by the new management team. | | | | to be effective for both the company and employees, |
| 3. One evening at 9pm, Employee X was asked by a | | | | needs to address certain key areas in a |
| Manager from a different department why he was | | | | comprehensive, yet targeted package: |
| leaving work so early. | | | | 1. Built-in Incentives which aren't a burden to the |
| 4. Low Employee Morale set in under the new | | | | company's cash flow or tax liability yet provide key |
| management scheme; hours were long with little | | | | employees rewards for growth. |
| payoff; no downtime between projects; and labor | | | | 2. Business Continuation Planning and Key Employee |
| lawsuits were filed by employees. | | | | Protection |
| 5. Employee X asked for and received a $10,000 raise | | | | 3. Performance Pre-View System which proactively |
| but it was "too little, too late". | | | | rewards individual and team success toward achieving |
| 6. A mass exodus of employee talent ensued. | | | | the Company's Strategic Plan's Goals. |
| 7. Employee X went to work for a 10 year old | | | | 4. A Comprehensive, Cohesive Benefits package |
| company in the same industry; got paid market rate | | | | which isn't held to be the Golden Parachute, but rather, |
| and overtime; and most importantly, has "an employer | | | | a strong component of a Company's overall |
| who invests in me [Employee X] as an employee, via | | | | Compensation Plan, yet minimizes the financial burden |
| everything from extensive training to Company | | | | on the Company. |
| barbecues...." | | | | 5. The level of Pay is not the central component of an |
| 8. When asked what would keep at his new job five | | | | effective, attractive Compensation Package. |
| years from now, Employee X responded, "if they let | | | | 6. Effective implementation of a Company's |
| me telecommute at least a few times a week, I'd be | | | | well-designed Compensation Plan is vital to and |
| more than happy to do whatever it takes to help my | | | | oriented toward Employee Morale. |
| new employers succeed." | | | | |