EOR_Publications_Book_Reviews

The Journal of Diversity Praxis

Volume I, Number 3
Summer 2004
Literature Review - A Look at Current Books and Articles of Interest to Diversity and Vitality Practitioners

Affiliation in the Workplace: Value Creation in the New Organization
by Ron Elsdon
Praeger, 2003

SYNOPSIS:
Review by Richard Vicenzi
Global Diversity Institute

"The decision a person makes about joining an organization is a values-laden decision that is not equivalent to buying a container of soap powder. It is about practices and behaviors in the organization. It is about the respect with which people are treated, their participation in decisions and the openness of communications. It is about the substance of the organization, not how it appears. "
Ron Elsdon - AFFILIATION IN THE WORKPLACE

How does an organization increase the probability that its valuable employees do not leave for "greener pastures"? Intellectual capital is becoming a more critical asset for organizations of all sizes who compete in more than a purely "local"market. Attrition is a very costly event in any circumstance. Recent research puts the average cost of an employee leaving at 1.5 times their average salary, varying according to position, but with the highest multiples at higher paid positions. It's been calculated that the average annual attrition cost for healthcare organizations is $146 million. There are many direct costs, not only hiring and training, but also productivity losses, termination costs, and impact on revenue, productivity, and morale. But when someone leaves who takes with them a great deal of institutional knowledge, or who has skills that are not easily replaceable, the impact is even greater, not only on the bottom line, but on potential lost knowledge, on others in the organization, and on the costs of strategic missteps.

As the economy continues to expand and the job market is perceived to be more inviting, organizations that have done a poor job of fostering affiliation among their employees will become more and more vulnerable. This is especially true of those companies who have sought to shore up stock prices during their down times through extensive layoffs or questionable financial practices. The largest danger comes from the fact that the most talented and/or highest performing employees are the most marketable, and therefore are the most likely to be aware of professional options. Companies who have had severe employee cutbacks have already suffered loss of intellectual capital. Those that have lost the trust of external constituents are not likely to have retained the trust of their internal constituents. Companies in both categories are highly vulnerable to attrition of the people that will be the most difficult and most costly to do without or to replace.

A widely recognized gradation of form of commitment was defined by Meyer and Allen.* Most effective bonding is what they call Affective Commitment. In this case individuals identify with the organization's objectives and want to remain because they have a personal resonance with its activities. Next dedicating is Normative Commitment, where individuals remain with an organization because they have a sense of personal commitment. Weakest commitment is Continuance Commitment. Here individuals feel the need to remain with an organization because they are not aware of, or believe they have, any good alternatives.

Historically, many organizations have approached the battle for employee retention through limiting options. The U.S. appears to be coming out of an economic period where many employees have been constrained by a feeling that they are lucky to have a job. Conversely, Peter Drucker has famously argued that every employee should be approached as if s/he were a volunteer, who has the ability to choose on a daily basis wether to stay or leave. The key to this kind of approach is clearly a reciprocal relationship where both the organization and the employee are aligned through clear purpose, open communication, and attention to employee development.

In the book quoted above, Ron Elsdon comments on the counterintuitiveness of this paradox, He notes that the traditional approach of organizations to the connection with employees mirrors the definition of "retention": to hold back, keep, restrain, or to keep in one's pay or service. It implies a one-way bond. He states, "The bond of affiliation is stronger when the bonds of tethering are weaker? Affiliation at its core is a two-way relationship, supported by both the individual and the organization. In the emerging world of work, both parties have an equal say. Such a two-way relationship is strong only when both parties willingly participate without one being coerced by the other."

He goes on to be even more precise: "...the nature of the relationship and engagement needs to be crafted for each individual. This is a one-to-one relationship, not one to many. It requires significantly enhanced personal skills for those chartered with building these relationships. Furthermore, it requires deep knowledge of organizational direction and opportunities as the relationship is built and grows around the provision of options and choices."

This level of attention and commitment to the individual employee is a true challenge to leadership and the HR function. It becomes even more daunting as we contemplate the changing nature of workforce composition and the rapidity with which identities that have not been historically manifest are confronting our organizations. But shying away from inclusion is not an option for survival. Elsdon makes this clear on page 9: "Inclusion is central to affiliation. That means inclusion to support breadth of viewpoint, breadth of perspective and breadth of experience. The engine of intellectual capital generation is stimulated by the fuel of diversity and by the mechanism of inclusion, which leads to broader community."

The importance of dealing with your people on an individual level is highlighted by a study on attrition conducted over two years in five different U.S. organizations of between 10,000 and 200,000 employees. It was clear, as it has been in innumerable studies over time, that dissatisfaction with workplace factors is the primary reason why employees look to leave an organization (71% in this study). Also of note is the finding that 60% of people who left voluntarily were in their first 4 years with the organization, and another 25% had over 30 years. Another of the findings was that reasons for voluntary resignation by men and women differed. For women, their dissatisfaction most often centered around issues of relationships and environment. For men they tended to be more related to accomplishment.

Most Prevalent Reasons for Voluntary Attrition

WOMEN
-Negative work environment opportunities
-Poor communication
-Manager did not accept input
-Lack of career development opportunities
-Lack of recognition/appreciation

MEN
-Lack of career development
-Lack of meaningful work/adding value
-Lack of promotional opportunities
-Financial reasons
-Negative work environment

All of the above reasons for being dissatisfied (disenchanted) in a particular work environment are demotivating. Although these reasons show somewhat different persoectives, all of them are related strongly to individual contribution and recognition. The point of specifying how they differ between men and women is to realize that if retention efforts were focused on either of these two different perspectives, without equal attention to the other, those efforts would be essentially irrelevant to a large proportion of the workforce (male/female). Consider that this difference exists in spite of the fact that of all historically marginalized people, women have made the most progress toward achieving a fair playing field for success and recognition within organizations. Forebodingly, in seven out of nine cases that provided meaningful data, the minority gender in the organization had higher attrition rates than the majority gender, regardless of whether women or men were in the minority, and in one other case it was equal. Imagine what the dissatisfaction factors might be for those people who see less inclusion and more barriers to being a valued member of the team.

The implications of these findings are tremendous. Companies that risk higher than optimal attrition rates are playing Russian Roulette with their continued existence. Companies must staff to not only replace those who leave voluntarily, but also to fuel any growth and expansion that they enjoy. What is the workforce to whom they will be appealing to enter into the complex, ambiguous, tension-laden employment relationship? The growth rate of the U.S. workforce is projected to decline to almost zero by 2025. The majority of graduate technical degrees awarded in U.S. universities today go to students not born in the United States. Almost 60% of all college degrees from U.S. academic institutions today go to women. Growing ethnic diversity is evident in the workforce of all developed economies. In the U.S., non-whites project to account for almost 40% of the workforce by 2025, up from less than 20% in 1980.

In addition, we can expect the job market to continue to become increasingly efficient. Just within the last three years, we have seen the amount and quality of information mushroom that candidates for positions have, virtually at their fingers tips via the internet, assorted data bases and search engines, and networking contacts. Diligence can provide a lot of sound information from the outside about what it is really like to work in a given organization, what values really drive its decision making processes, and what their current employees really think and feel about them as an "employer of choice." This differs markedly from the information advantages enjoyed by recruiting companies just a few years ago.

Successful retention efforts then, must seek to identify and minimize the drivers of personal disenchantment in each given organization. Failure to succeed at this undermines any ability to inspire those employees who thrive on Affective Commitment, especially those with relatively short tenure. Failure also jeopardizes Normative Commitment, straining the binding sense of duty. Workplace disenchantment risks silencing voice and entrenching conformity, stultifying the risk taking of new approaches and burying innovation. The resulting environment moves toward stagnation and rigidity, forcing employees to choose between the Continuous Commitment of no better alternative or finding that alternative. This is not to say that we wish to completely eliminate attrition. Zero attrition is not desirable because it means growth must account for all new perspectives entering the organization.

Affiliation In the Workplace provides some hope for the practitioner charged with moving an organization toward enchantment and away from disenchantment. Borrowing from Catastrophe Theory, Elsdon builds a series of equations that allows him to map the relationships between organizational value creation, individual fulfillment, leadership's ability to create a sense of individual fulfillment, and the length of time an employee intends to remain with the organization. The model predicts a sharp discontinuity between two regions of stability: one region of high anticipated tenure and a strong sense of inspiring purpose and fulfillment, and the other region of low anticipated tenure and lower sense of inspiring purpose and fulfillment. The hopeful ( and, alternatively, frightening ) aspect is that the sharp discontinuity indicates that a small change in the degree of inspiring purpose and fulfillment can result in sudden movement from one region of stability to the other. So for companies striving to reduce their attrition rates, "as a person's sense of inspiring purpose and fulfillment increases, there is a sudden, dramatic increase in the anticipated tenure with the organization..." For companies that enjoy low attrition rates, this also implies that they cannot afford to relax their efforts at inspiring purpose. Intent to stay with the company can move in the other direction just as suddenly if fulfillment and inspired purpose declines.

Thus we again are drawn to the core Vitality Elements, all of which are directly tied to enchantment and willingness to affiliate: - Anxiety Containment: Proactive organizational pursuit of a "safe place for creativity - based in trusted leadership, access to meaningful information, and continuous opportunity to keep skills current; - Use of Power: Leadership allows for subversive creativity (play), development of knowledge and skills, and spontaneous self-organization that shapes the organization; - Sense of Association: Connections that enable contribution, awareness of common goals, access to necessary resources; ability to strengthen connections when seen as helpful and to loosen them when not necessary; - Information Flow: Availability of information across organizational boundaries both horizontally and vertically; access to useful information and protection from superfluous data; - Diversity: the greater the diversity of agents, the more options and choices present themselves, the more kinds of information are available; individuals are invited to draw upon their fluctuating identities in pursuit of the common goals defining their work within recognized and accepted boundaries.

AFFILIATION IN THE WORKPLACE: Value Creation in the New Organization Ron Elsdon Praeger 2003

*Meyer, J.P. & Allen, N.J. (1991). "A Three-Component Conceptualization of Organizational Commitment," Human Resource Management Review, 1(1): 61-89.