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8 Retaining Top Employees

What “Employee Retention” Means Now

By the time we reached the late ’80s, organizations had made
most of the one-time realignments of compensation and bene-
fits possible. Although the issue of compensation and benefits
would continue to form part of every organization’s employee
retention toolkit, there was a growing realization—on the part of
both employers and employees—that there was more to
employee retention than hygiene factors.
Most important to the development of the now fully fledged
employee retention industry was the realization that if employee
retention was to be effective and sustainable—if it was to work
in the long run and not just produce a single, temporary dip in
employee turnover—there was a need for a holistic approach to
the individual employee that would go beyond simply adjusting
the employee’s compensation and benefits.
Meeting “Higher” Needs
What came into play was something called Maslow’s hierarchy
of needs—a well-accepted concept that began in psychology,
spread to other areas of life, and then slowly began to make a
profound impact on working life and, in particular, on the under-
standing of what employee retention really means.
Abraham Maslow was a psychologist who focused on

Competitive Compensation Is Just the Entry Fee
As we’ll see over and over again in this book,it’s impossible
to build a sustainable,effective employee retention strategy
on the basis of competitive compensation and benefits alone. (We dis-
cuss the role of compensation and benefits in effective employee
retention later in this chapter and in detail in Chapter 5.) Ensuring
that your compensation and benefits are competitive is just the entry
fee to playing the “employee retention strategy game.”
In other words,if your compensation and benefits aren’t competi-
tive,you’ve got to fix them before you start thinking seriously about
serious,effective employee retention. However,making your compen-
sation and benefits competitive only brings you to the starting gate—
it’s what you do after that point that makes all the difference.