Employee rewards reduced the 'wrong' turnover

by on May 12, 2009 · 0 Comment POSTED IN: HR Info Center

This case shows how an effective employee rewards and recognition program helped retain the “A” players

Do you ever wonder if your best people feel they’re getting the same treatment in terms of employee rewards like salary as the low-level performers? If they do, you may find retaining your top performers is more difficult.

An Applebee’s restaurant in Albuquerque, NM, had an average length of service of about seven months. That meant lots of recruiting and training – and lots of effort that could be better used providing service to customers. To attack the problem, the company took three steps.

  2. First, it had managers rank workers on several areas, including reliability, attitude, service and teamwork. Workers also filled out self-evaluations, which the managers would review:

    • A’ performers were the top 20%
    • ‘B’ performers were the next 60%,
    • ‘C’ performers were the bottom 20%.
  4. Managers were given money for real time employee rewards, and given the freedom to use their own methods for boosting retention.

    Some managers recognized employees for outstanding efforts by posting photos, other managers gave the best performers preferences in shift assignments, and still others gave ice cream bars to those working Saturdays.

  6. Managers’ merit raise and bonuses were tied to successfully retaining the people in the top two groups.

    The rewards system worked: Turnover dropped to 84% from 146%. Even better – most of that was in the bottom 20%.

Source: Wall Street Journal, 11/21/05.

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