Retaining top talent during crisis

Amid large-scale disruptions, organizations are faced with the challenge of maintaining employee productivity and retaining top talent. Two recent studies from the Ateneo Center for Organization Research & Development (Ateneo CORD) shed light on the importance of effective leadership behaviors in performance management and rewards management in achieving these goals. Both studies, involving a total of 263 employees, were conducted at the height of the COVID-19 pandemic, where respondents' experiences were heavily influenced by the crisis.

Leaders play four key roles to manage employee performance during a crisis and ensure organizational goals are met. As a performance driver, they must balance focus on goal achievement with people management. As a performance enabler, they must assess and adapt to the situation, provide resources, support, and feedback to help employees be efficient and effective. As performance coach, they use various monitoring tools, have regular check-ins and on-going coaching conversations. As a performance rewards allocator, they must allocate and align rewards and recognition with performance standards. The behaviors in each role play a critical part in guiding employees toward success and predicting better productivity, retention, and perception of organizational justice.

But here's the twist - the study found that two important elements must also be present for these to be executed successfully: compassion and fairness. Leaders who show compassion build stronger relationships with their team members, creating a more supportive work environment and ultimately resulting in higher employee engagement and improved productivity. Fairness, on the other hand, helps maintain employee trust and a sense of equity in the workplace, reducing the risk of turnover and creating a more positive work environment. So, to amplify the four key roles of performance management, leaders must also prioritize compassion and fairness to create a truly effective and supportive workplace.

Employee retention is a key challenge for many organizations, and it's no secret that rewards management can play a significant role in this effort. The relationship between rewards management and employee attachment has been oftentimes assumed. A study found that while good rewards management is important, affective commitment conditionally affects its relationship to the employee’s decision to leave. Based on this local study, effective rewards management practices include asking employees what rewards they prefer (e.g. through surveys); ensuring transparency, clarity, and fairness on the process and rewards metrics/qualifications used; balancing material rewards and recognition; awarding rewards publicly and basing them on individual and/or team performance.

 The research found that employees who are already highly committed to the company may not be swayed by rewards or perceptions of fairness. But for those who have lower levels of commitment, perceptions of rewards management and fairness will keep them or pull them out of the company. The study highlights that while rewards management is important, it's only part of the equation when it comes to employee attachment and retention. By focusing on building perceptions of fairness and creating a system that rewards what matters to employees, organizations can create a more engaged and committed workforce.

Crisis situations such as COVID-19 presented challenges for organizations in maintaining productivity and retaining top talent. These hurdles continue even if the crisis has started to wane. These two studies highlight the importance of revisiting old assumptions about performance and rewards management and encourage leaders and practitioners alike to consider a holistic approach that combines multiple employee and organizational elements. Leaders must assess their organization’s context in a BANI (brittle, anxious, non-linear, incomprehensible) world to build a more engaged and committed workforce.