Five mistakes CEOs commit which make employees quit

Five mistakes CEOs make to make employees quit

The best thing about success is; it comes in all sizes, colours and flavours. Everyone desires it. That’s why you see the enthusiasm in people when they join a new company. The hope of finding success through a new role makes them more confident and positive.

Why it fades down? Why do people leave?

Once after an event on HR best practices, a CEO of a medium-sized company walked up to me and asked: “why people leave once they learn tricks of business?” He was unhappy with my take that people leave when they are undervalued, mistreated or underpaid. His concern was that in a small to medium company, employees leave easily if they find a salary hike or job title raise. He was genuine; employee attrition is a big challenge for MSME. No doubt, it takes a lot of effort to find a person, train them and fine-tune them. Losing them to competition or any other reason comes as a setback when you invest in people.

Making people stay in your company is a strategic as well as culture issue apart from being a leadership challenge.

In my view following are the five mistakes CEOs; yes CEOs not HR managers make

1.    Disempowered HR department

Often, HR division is looked down as a recruiting and Payroll section in a company. Their role is restricted to hiring, orientation, and payroll. Their interventions in handling employees are often written off by vertical heads and pseudo intellects in the company. This is one of the biggest mistake CEOs or the top line makes in a growing company. For incidence, under such circumstances, hiring is often based on vertical heads opinion of candidate wherein HR has to neglect the intent part mostly. Technically sound people are hired without checking their motivations, intent or alignment with companies’ goals.  HR is one of the biggest support function and shall be empowered enough to take right measures in employees interventions, fair play for each employee and scrutinizing motives and intentions at all levels. One of the best examples of an empowered HR is Google. The philosophy of Google is that with the right tools, you can attract the best talent, and develop happier and more productive employees.

2.    Lack of MBO

The term MBO (Management by Objective) was first coined by management guru Peter Drucker in the 1950s. It simply means defining objectives that are agreed to by both management and employees. In layman terms, it means employees participation in target setting. Most CEOs only involve the top line and heads in planning and goals setting. The team members are told about the targets without observing their commitments and capacity. It leads to a lack of performance as per benchmarks and eventually leads to demotivation and finally people looking for new options.

3.    High-pressure culture

When in a company the roles are very demanding, late sitting is common, weekend attendance is important and people are often under pressure to perform. The result; they feel demoralized. No matter which industry you belong to creating the right culture of performance, sharing and bonding is important. When employees are celebrated for their strengths and given importance, they will stick through during difficult phase as well. But when just to achieve numbers or kill competition, a culture of pressure is created, people leave. Take the recent example of Wells Fargo Bank a toxic high-pressure sales culture drove some workers to cheat customers and open unauthorized accounts. Those workers were fired later when the company got into scandalizing position.

4.    Strong Values and Ethics      

Ethics are those guiding principles which define moral grounds of your relationships with customers, clients, employees, and shareholders. Values and ethics of a company eventually come out in their day to day dealings. Companies with a low value for ethics and contradicting values face high attritions. As CEO or leader, the role shall be to not only define but follow a high ethical code and conduct. This trickles down in the verticals heads and key players in the company. When you stand for the right values employees respect you more. Take for e.g. Tata, Wipro or IBM.           

5.    Lack of appreciation and recognition   

Tony Robbins says Significance is one of six human needs; Maslow theory also contemplates this in a slightly different way. Fact is people have a need to feel important, recognized and appreciated. If this need is not met they feel disappointed or demotivated. Topbrass in a company often gets busy in reaching new milestones often neglecting to implement this as a culture or part of company rituals. As a leader, if you are not making sure that people feel significant despite their levels or hierarchy, be prepared to lose them.

Setting up a culture specifically in SMBs might be a challenge because of the dire need to succeed with a small team and fewer resources. However, if it’s done right since the beginning, it pays off in the future and also when the company grows you don’t have to reinvent the wheel.

If you have any thoughts or challenges feel free to connect via LinkedIn inbox or at [email protected]. Happy to help!