Cash is NOT King: The Real Reason for Employee Turnover

We’ve all heard the worn out phrase that “cash is king,” referring to the critical nature of financial cash flow.

However, when applying this phrase to employee satisfaction, there are several items that take precedence over money. Don’t get me wrong, compensation is important consideration. But, it’s not the most important consideration in most situations. And, when it is number one, it simply indicates a cultural problem to be solved by management. More accurately stated, cash should never be king unless we’re talking about financial cash flow.

When people leave an organization, it is rarely because of compensation. This fact has been validated by numerous studies. The reason why owners and managers often believe that most people leave for more money is because it’s the easiest answer to give when resigning as to the reason why. It’s a cop out; no different than when a prospect informs us that we lost a sale based on price. Being honest requires transparency and may lead to all sorts of uncomfortable conversations. Why bother? Don’t be fooled by this deceptive feedback. There’s almost always a more truthful answer.

Would you like to know what is king? The most common reason for employee dissatisfaction and turnover is a lack of appreciation. People want to be appreciated for their efforts and achievements. They want to be noticed, listened to, and respected. When people feel truly appreciated, compensation drops down the list of satisfaction criteria.

Displaying sincere appreciation seems like such a simple thing to do. But it’s not. At the organizational level, it requires intentional action and investment. Organizations that do a good job in this area spend significant amounts of time and resources to ensure that their investments produce the intended affect. With a robust employee appreciation strategy in place, organizations are able to send a powerful message to their people.

At the supervisory level, expressions of appreciation, or the lack thereof, take on an even more critical meaning. Even when organizations are doing all they can do to express appreciation, it’s the person’s direct supervisor that has the most impact on an individual’s job satisfaction. People don’t quit organizations, they quit their managers.

Managers with the ability to express appreciation freely and on a regular basis generally have high emotional competency scores. For these managers, showing appreciation is effortless and natural. They do it without thinking.

Organizations not only need to concern themselves with showing appreciation at the organizational level; they also need to be very concerned with their managers’ capacity to show appreciation.

Of course, there are many other factors that affect employee satisfaction in addition to appreciation. However, this is a great place to start when looking at creating a more attractive employment situation for your people.

What about you and your organization? What is your strategy for expressing appreciation at the organizational level and is it sufficient? What about your managers? Are they emotionally competent and regularly showing how much they care about their people? What are your action steps?

Now go forth.

photo credit: paper money