How to Retain Key Employees
How do you keep key employees? They're the ones who are most likely to be wooed by a competitor or set up their own shop. Three successful entrepreneurs offer suggestions:
* Autonomy, with equity rewards. Donn Rappaport, American List Council, Princeton, N.J.; compiler and broker of mailing lists; 60 employees: "We give a lot of autonomy to our key people. We have six internal directors who are responsible for the business plan, hiring and firing, and setting incentive goals for their people. And the directors are compensated to a large extent on the basis of performance. That gives them a sense of being in business for themselves.
"One of the things we're facing right now is equity participation. My partner and I own 100% of the company. We're considering creating a stock-purchase plan for those six directors. We're not going to give them ownership to keep them. Because of their dedication, they're already acting like owners. We're saying we should reflect reality."
* Flexibility and job ownership. Gaye Torrance, Torrance & Associates, New York City; public-relations business; 8 employees: "I've been able to keep the people I have because they have families, children, and spouses, and I'm flexible about that. I allow them to have a life. In return, they work extra when they have to.
"I can't keep people if they do their job but have no part in deciding how to do it. I try to find out what they're good at, what they like to do, what kind of improvement they feel is needed. When they come up with changes, I may not agree with them, but as long as a change isn't damaging, I'll let them try it."
* Benefits, challenge, and personal development. Jeff Daggett, W & H Pacific, Bellevue, Wash.; engineering and consulting business; 200 employees: "When we established the company, we wanted to become the employer of choice so we wouldn't have to experience the turnover that plagues our industry. We established a comprehensive employee-benefits program that includes a 401(k) plan, an employee stock ownership plan, and an aggressive health-care plan (including cafeteria-style benefits and an employee-assistance program). We've tried to create an environment in which employees don't have to worry about those things.
"The other thing that keeps professionals interested is the challenge of the work. Money tends not to be a big motivator. We focus on aggressive and focused marketing programs so we're able to secure interesting projects.
"Probably the most significant thing we've done is started down the total-quality-management path. We've been providing a lot of training internally for personal improvement, as well as training in the statistical-control method. Our goal is to get all our people up to a point where they're able to write a mission statement for their lives." -- Ellyn E. Spragins* * *