By Mark Herbert, Principle Mark F. Herbert & Associates, Inc. and New Paradigms LLC

Over the last few days it has been interesting for me to see a number of discussions pop up on blog sites and social and business networking relationship sites that I belong to about the correlation between employee retention and employee satisfaction. The dialogue includes questions like:

• Is there a direct or indirect correlation between employee retention and employee satisfaction?
• Which is the more important measurement to employers; employee satisfaction or employee retention?
• What is employee engagement and should I be measuring it?

I will respond to those questions the same way I responded to them on the sites- assuming that there is a direct or indirect correlation between retention as measured by average tenure and satisfaction is potentially dangerous and misleading.

Employee retention at its most basic is a function of turnover. How many people join and how many people leave your organization over a given period of time. If you want to be more sophisticated you might measure “regretted turnover”, those you wanted to keep; versus “unregretted” turnover, those you didn’t mind seeing leave. I would concur that those can be very different.

Where I get lost is drawing an absolute correlation between an individual’s length of employment and their perceived “satisfaction”. Employees stay in organizations for a lot of reasons, satisfaction may even be one of them. Unfortunately, there may be other reasons as well-

•  They lack the motivation to look for a “better” job.
• They are in a situation where they are tied to the position/geography for family or other reasons.
• They are “invested” in staying long enough to qualify for a retirement plan, stock options, or other “retention” devices.

I have found over my experience as a manager and consultant for the last 30 years that there is something worse employees can do rather then leave when they are unhappy- they can stay! They can stay and take up room. They can stay and “poison the well” for others. They can stay and impede the ability to promote other more capable staff.

Another “measurement” that I ponder is “experience”.  Even in my own case, do I really have thirty years of experience, or do I have one year of experience repeated thirty times?

I don’t want to be misunderstood in that employees who have a long term relationship with their employer or who have been performing their responsibilities for a significant period of time are drones- I am just saying let’s examine a different measurement.

I would challenge you to measure engagement. In my context engagement is the employee who comes to work in your organization with a clear sense of their personal contribution to the goals of the company and the connection to their own goals. They share a vision with you. They have moved from what my partner and I call compliance to Commitment™.

Commitment isn’t measured in years or tenure; it is measured in productivity and enthusiasm. We have all seen organizations like Google, Starbucks, Apple, and the “old” Nordstrom’s. These companies almost resemble a cult. They believe in the mission and they come to work every day prepared to do their part.

We have been in a recessionary economy now for over four years. Although the stock market is back up, unemployment and other key indicators aren’t showing the kind of progress that we would like and expect to see.

As recently as this week we saw that on the anniversary of OWS the protestors were back out. Is that surprising given that for many Americans they haven’t reaped the benefits of the improvement to the economy?

I hear employers lament that they can’t find the talent they need even though unemployment remains high. Could it be that they are using the wrong process and looking for the wrong things?

There was a great article out this week indicating that top talent will leave organizations where they feel the employer isn’t invested in them and they are not receiving mentoring, coaching, and an opportunity to learn new skills. This isn’t new, but for the last few years employers have hidden behind the old posture that employees should be grateful to have a job.

Candidate Romney had been criticized for making a comment among a group of his peers (rich people) that 47% of the population is in some type of codependent relationship with the government or status quo and unlikely to move of their own inertia.

He wasn’t necessarily wrong, his comments just didn’t take into account that that 47% has multiple subsets and that retirees are very different than people on unemployment or other forms of government assistance.

I have argued that many of our issues around health care and the entitlement mentality that we are experiencing were created by us. When large employers wanted to introduce the concepts of mass production and simplify many skill sets in order to reduce costs, they offered health benefits, retirement and other inducements in return for compliance. Then as the costs of the programs got higher the solution was to outsource and offshore. My point is we deliberately created the codependence.

When we created the concept of human capital we created a whole new industry of consulting to package and track intellectual capital and talent the same way we do financial capital and materials. Consulting firms make billions annually installing templates and best practices. The problem is that most of these models do not take into account the human dimension. People aren’t capital. They can have a nasty way of withholding their capability if they don’t feel well managed or well treated. Yet we still call the business of managing relationships a soft skill.

In some ways I find it ironic that Governor Romney chastises people for not taking responsibility for their careers and successes. Bain and other financial management firms were key drivers in pushing companies to elevate the shareholder to the throne above all other stakeholders and to take whatever steps necessary to do so, in other words to treat employees as human capital. When you treat employees as human capital that is a codependent rather than a personal competency approach.

The “trickle down” economic model is not based on industrial democracy and never has been.

So in parting I would leave you with this thought- By all means continue to measure and track, because as they say what gets measured gets done! I would just caution you- be sure that you are measuring the right things and interpreting the results correctly. You get the behavior you reward, if you manage and reward for excellence you will achieve it. If you measure and reward tenure, you will get that. They aren’t the same.

Written by Mark Herbert, Principle Mark F. Herbert & Associates, Inc. and New Paradigms LLC  With over 30 years of managerial, executive, and consulting experience, Mark has authored four books including Managing Whole People-One Man’s Journey; C2C-Compliace to Commitment, A Foundation for Employee Engagement & Building a Culture.  He is a consultant, speaker and facilitator on executive development, strategic human resources, employee engagement, and employment branding on a regional, national, and international basis.