Role of Work Life Balance In Attracting and Retaining High Potentials

Term Paper for the course of International Talent Management HR 510 Submitted to:

Prof. Don MINDAY
Submitted by:

Julie Tomanová Pragya Raj Gupta
ESC Rennes School of Business

Fall Semester 2012/2013
1

HighPotentials Work Life Balance Work life balance as a tool for retaining high potentials A. Which Strategy to Follow? 3 4 5 7 10 11 C. The Gap between Policy and Practice Case: SAS Conclusion & Recommendations References 12 13 15 18 2 . VII.Table of contents Introduction I. V. VI. II. Integrating work life balance in the organization’s culture will benefit all 12 IV. III. Work life balance practices B.

and also their reasons and purposes for working are different than they used to be (Eisner. HR’s role has become more proactive and to undertake more strategic role in the organization. We will begin by first discussing who the high potentials of a company are and why is it a challenging as well as important for companies to retain them. According to study published by Wharton (2007: 4). Hester.Introduction The corporate world has moved way beyond from the Taylorism theory which in brief states that money is the solitary motivating factor for employees and is the link to their productivity. 3 . We shall then discuss the best practices the organisations implement in order to achieve the same and then specifically discuss some specific company scenarios. These people are still ambitious and they are still driving”. This will be followed by our opinions and recommendations about what the companies can do to attract high potentials through work life balance practices. 2012). For today’s generation money is generally not the main driver for work. In this term paper. In the 21st century. 2005). and the price to climb is too high. does not hold true for the people today. We will go on to then discuss the work life balance and the important role it plays in the employees’ performance. The role of Human Resources department in a company became more reactive and administrative. Further. 2011). It was late in the 1980s that the companies began to acknowledge the “human” in the human resources. what worked for people 20 years ago. The successful corporations have now realized the role of people is critical in achieving competitive advantage. Generation Y seeks for a work life balance in order to achieve professional satisfaction and personal freedom (Barford. “a number of men and women in the middle management are increasingly reluctant to take the next step in their careers because the corporate ladder is not as appealing as it used to be. we will focus and discuss the relevance of work life balance in attracting and retaining high potentials. like machines (Riley. Further people can be treated in a standardised fashion.

1 ‘Barnard-Simon Theory of Organizational Equilibrium’. These studies help organizations to understand the entire process in an objective way and help influence decisions of their employees. and developmental opportunities) are equal to or greater than the contributions (time.babson. Babson College Faculty Web Server [online]. High Potentials Lance Berger & Associates (2003) define High Potentials or HIPO as “a very small group of individuals in the organization who have demonstrated superior accomplishments. ever-changing global corporate world. HIPOs can be defined as employees high on performance. 2008). In essence. Available: http://faculty. Employers are ready to adopt the best of talent management strategies in order to retain the right number of highly capable people especially for future roles as potential successors. Source: Ernst & Young In this ever-expanding. What Employees Leave? There has been considerable research by experts to not only understand the varied reasons behind employees’ decisions to leave an organization but also the process that it involves to finally make such a choice.edu/krollag/org_site/encyclop/bar_simon_theo. potential and values. The theory of organizational equilibrium sheds valuable light on these matters. effort) required of the person by the organization. [27 Nov 2012] 4 . these judgments are affected by both the individual’s desire to leave the organization and the ease with which he or she could depart (Allen. retaining this talent is becoming one of the major challenges being faced today.I. good working conditions. An individual will stay with an organization as long as the inducements it offers (such as satisfactory pay. have inspired others to attain superior accomplishments and embody the core competencies and values of the organisation”.html.1 Moreover.

your productivity at work is not as rich. work and non-work roles.” (Hudson.com/content/articles/organization_transformation_creating_people_advantage_201 5 . The number of hours put in at work should not be of much relevance as long as one can complete the task for the day to the best of his or her abilities. [online].Nigel Marsh “A recent study explored and measured three aspects of work/life balance: 1. [27 Nov 2012] 3 ‘Creating People Advantage 2010: How Companies Can Adapt Their HR Practices for Volatile Times’.aspx.2 II. Time balance. Work life balance along with issues like managing globalization. one of the elite consulting companies. meaning the level of psychological involvement in. This was spread across 109 countries covering five continents and many industries. because of long-term demographic and social trends. 2. 3. where challenges do not pose immediate danger and can be addressed before they move into the red zone.3 2 ‘Work Life Balance Section’. with time. which concerns the amount of time given to work and non-work roles. Work life balance “I found it quite easy to balance work and life . involvement and satisfaction components. However. Satisfaction balance or the level of satisfaction with work and non-work roles. The Canadian Bar Association. we would argue that they are highly relevant for future success. Available: https://www.org/bc/bartalk_06_10/02_10/guest_sas. and that managers should rekindle efforts to improve in each area. When all you know is work. or commitment to. 2005:2) This model of work/life balance.In our view.bcgperspectives. work life balance is about working smart to make sure one never feels like that he or she is sacrificing their life for being at work. Bcg. Involvement balance.when I didn't have any work. It’s about working effectively and efficiently so that at the end of the day one is satisfied with what he or she has achieved in a given working day. (2010).” .perspectives [online]. conducted on online survey of how Executives view the most critical HR topics. (2010). Available: http://www. nor is it as valuable. Boston Consulting Group. diversity and inclusion and corporate social responsibility and many other such similar were categorized in the yellow zone.. enables a broader and more inclusive picture thus stating that achieving balance needs to be considered from multiple perspectives.cba.

and were more likely to return to work. Despite all this. took fewer sick days. A lot of men therefore use what Hall (in Beauregard.“ (Grover. lack of concentration. McDonald. job-protected leave. 1995:273) Researches also confirmed that from work-life balance practices benefit not only employees but also organizations. 2009). Henry.they don't make use of family leave and 0/?redirectUrl=%2fcontent%2farticles%2forganization_transformation_creating_people_advantage_2010%2f% 3fchapter%3d2&login=true. 2009) observed that companies offering work-life balance practices have also higher profit rates. Both roles require a lot of effort and time. Henry. According to Shepard et al. worked later into their pregnancies. Mukerjee and Sestero (in Beauregard. This conflict then may result in a range of negative aspects such as reduced work effort. Henry. low alertness or reduced levels of general health and energy (Beauregard. Very often these two roles may lead to contradictory demands which employees have to face (Leaptrott. Crooker. stress and burnout. Bloom and Van Reenan (in Beauregard. 2010: 1). There was found positive relation between these practices and organization's productivity. (in Beauregard. flexible scheduling. Henry. [27 Nov 2012] 6 . One of the possible explanations may be that employees perceive these practices as symbols by which organization demonstrate a concern for them and thus promote their obligations in the organization (Beauregard. Many studies supported the assumption that employees benefiting from work-life balance practices are more committed to the organization and more satisfied in their work. 2010). worked more on their own time. One concerns managing a family life and the other managing professional tasks on the job. 2009) calls “invisible daddy track” . and supervisor understanding – were more satisfied with their jobs.A lot of managers have to nowadays simultaneously perform two uneasy roles. and increased absenteeism and turn over. Grover and Crooker (1995) in their research found that childcare provision lead to organization commitment and reduced turnover intentions even among employees who are not users of the practices. It was found that pregnant women working in the companies which make them feel safer – “in terms of health insurance. 2009) another explanation may be that flexible work hours enable employees to work when they are most productive instead of during predetermined hours. There was also one study examining company's outcomes of pregnancy-related policies. reduced performance. The research conducted by Centre for American Progress showed that “fully 90 % of American mothers and 95 % of American fathers report work-family conflict” (Williams. many companies use of family-friendly practices is still considered as having competing priorities or as a sign of insufficient commitment. The conflict concerns both women and men. Boushey. Henry. Henry. 2009). sick days. 2009) conducted research among 732 firms in USA and Europe and found out that offering work-life balance practices was related not only to better organizational performance in terms of productivity but also to high quality management practices.

2009). It is not surprising then that many employees are afraid of making use of this kind of advantages which can in their eyes lead to damaging their promotion prospects and worse relationships with their co-workers (Beauregard. 2009 7 . Kowske. Work life balance as a tool to retain high potentials The Kenexa Research Institute (KRI) identifies key drivers of engagement and retention among high performers. III. Kowske. 2009). Henry. Participants evaluated those using flexible work hours as less committed. Table 1: Key Drivers of Engagement and Retention for High Performers Source: James. They have got files with information about female employee working in an accounting company who was seeking a promotion to a senior manager. less ambitious and less convenient for advancement than those not using flexible work hours. 2009) conducted research among working MBA students. In organizations where work-life balance issues are not supported. being visible at work for long hours is seen as a sign of commitment and high potential and even as a premise of productive output. This is because according to gender role theory men are supposed to place work before family life otherwise they are perceived as uncommitted.instead take vacation upon the family-related event. The research results identify the 10 most important drivers for engaging and retaining high performers (James. Henry. Rogier and Padgett (in Beauregard.

“according to high potentials. Available: http://www.” The BlueSteps 2010 Work-Life Balance Report showed that for 80 % of BlueSteps executives is work life balance critical when making a decision if stay in a company or not while 82 % at the same time said that there is no program to improve work life balance in their organization. 59 % of high potentials reported that forgoing vacations and working long hours decreased their overall satisfaction in work (Verma. Companies offering flexible career path attracted more individuals . It extends to the amount of travel required.. the extent of sacrifice of personal life for professional success and the degree of flexibility in terms of how and when their work gets done.businessdictionary. It indicates that there is a gap between how executives and organizations perceive work life balance.even those who didn't have family responsibilities – rather than traditional companies (Beauregard. Armatys. Crooker (1995) in their research found that employees are more attached to the companies with family responsive policies because of improving affective commitment and turnover intention. “The success of any organization is dependent on those running the show. said. Grover and Karen J. so healthy and satisfied executives are vital to overall performance. Greenslade. As Verma. 2002).com 8 . Affective commitment is based on emotional attachment – employee identifies with the company’s objectives and shares its values4. Henry.” The fight between business aspirations and maintaining personal life may be very stressful and frustrating. 2009). 2012). As AESC President. Continuance commitment binds employees to an organization by perceived costs associated with leaving the organization (Meyer et al. Peter Felix (BlueSteps 2010 Work-Life Balance Report). Greenslade and Armatys (30 June 2012) say. a good work-life balance includes much more than simply the number of hours logged at work. Steven L. 4 Business Dictionary.There are two types of commitment to the organization: Affective commitment and continuance commitment.

That’s the No. As is mentioned in an article ‘SAS on FORTUNE Best Companies to Work For list in US’. and 42 percent will only take jobs that 5 ‘Are Executives Losing the Grip on a Healthy Work-Life Balance?’. Now it’s a lack of employer work schedule flexibility. Kate Martiné.com/eweb/DynamicPage. in Lake Forest. work life balance practices reduce turnover which reduce also recruitment costs.” (Kubal. 1 reason. company retains knowledge and may deepen relationships with its customers.Graph 1: Do you view work-life balance consideration as critical in your decision whether to join or remain with an employer? Source: Corporate Connect5 There are many executives who give up their leisure time in favour of achieving their professional goals nevertheless 21 % would refuse a promotion if it means they would have to give up a good work-life balance (BlueSteps 2010 Work-Life Balance Report). human resources and corporate communications for the Trustmark Cos. 2008) Workforce today is in search for flexibility. Available: https://www. Newman. A survey conducted by Merill Lynch “indicated 16 percent of the baby boomer workforce is looking for part-time work. 1 reason for employees voluntarily leaving an organization. senior vice president. says that “it used to be that an employee’s relationship with their manager was the No. Corporate Connect [online].executivesearchconnect. [17 Nov 2012] 9 .aspx?webcode=worklifebalancejustreleased.

employee can choose to work 10 hours a day four times a week and have one day off. Work time may be negotiated or worker can choose to work during his/her peak hours. Telework Telework is type of arrangement when employees have to work at least some of their work time at home. if a work week has 40 hours. fax or e-mail. The core hours when everybody is in work are then between 9 and 3. Due to technology such as telephone. There are usually some core hours during the day when all employees should work. Given individual conditions these arrangements may be temporary or permanent. Workers can. Job sharing Job sharing enables two or more workers to share one job position. year). Reduced hours/Part time Part time means that employees can work less hours. Banking of hours This arrangement allows employees to choose days and hours when they want to work within negotiated period of time (week. 2. For example. 2008) A. 10 . 4.will allow them periods off for leisure. Work Life Balance Practices 1. 6. Flex time Flex time means that employees have a given total hours of work but they can choose when they want to start and finish. for instance. Banking of hours is usually combination of flex time and compressed work week. modem. 5. 3. computer. Newman. It is necessary for those who sharing the same job position to work as a team and to communicate. choose to start to work between 7 and 9 am and finish between 3 and 5 pm. workers may stay connected to their office while working at home. Compressed work week Compressed work week enables employees to work more hours per day and instead have one day off. month.” (Kubal.

R. Ask the employees – The H. especially in the mid level management. The Art of Effective Delegation We come across several instances where only certain people in a team would be overworked and stressed while the remaining team members would be sitting idle. Effective delegation not only helps you utilize the full potential of the employees but also helps in reducing the work pressure and thus taking more time for oneself. less sick leave. 2005). B. onsite / near site company child care. Chamber Plan. etc. 2.chamberplanmb. This should also include educating them about what the company or business currently offers. company referral system for childcare. Which Strategy to Follow? There are three important steps in determining which work/life strategies to implement for the organization: 1.”6 6 ‘Small Business HR Blog: Resources to help manage your most important asset’. Available: http://www. reentry scheme. Companies should provide trainings to the employees to develop on effective delegation skills. before deciding on which strategies will work for the company. Paid leave to take care for sick family members. operational needs and workload peaks.com/2012/09/work-life-balance/. longer employee retention. The other specialised leave policies and practices that support work / life balance include – Shorter work days for Parents. Leaves and Sabbaticals Leaves and Sabbaticals allow employees to take some period of time away from work while maintaining their employment rights. Sabbaticals are usually paid periods of time away from work which are quite regularly added to vacation time. Any costs associated with setting up an office gym for example should be balanced against such factors as lower absenteeism. life skill programs and so on (Hudson. Bereavement Leave. client contact hours. Canadian Centre for Occupational Health & Safety) 8. sabbatical leave. Paid Maternity Leave. Leaves may be paid or unpaid periods of time away from work for family or educational reasons. department should meet with high potential employees to determine their specific needs. 3. Employees. professional counselling. (‘Flexible Work Arrangements’. Assess the needs of the business – ensure that the HR has a good understanding of the business’ operational needs i.e. phased retirement. must be realized the importance of effective delegation in their work life. 2012.7. Conduct a cost/benefit analysis of the strategies that have been selected. [online]. [27 Nov 2012] 11 .

The HR department or the workforce managers should identify what type of alternative work arrangement is most appropriate for the organization and for the differing roles of employees and how it can benefit their employees. better physical and mental health of employees. These are outlined below: • Managerial Support . Improved performance. Available: http://www. organisational commitment. broader talent pool available (Hudson. RETENSA: Engage. Five distinct aspects of work/life culture have been identified from previous studies. earlier return to work after maternity leave.php. Managers’ acceptance of flexible work arrangements is essential so that their subordinates can trust them that their job security and career paths are not in peril if they chose to take advantage of these programs. 7 ‘Resources: Latest Employee Retention News and Turnover Statistics’. morale and job satisfaction. indicates trust and that the company is empowering employees to own rather than just be passive receptors of work. 2005). They are in a position to encourage or discourage employees’ efforts to balance their work and family lives. Motivate. all of which should be considered by organisations when attempting to improve employees’ work/life balance. Retain Top Talent [online]. The Gap between Policy and Practice Despite organizations introducing various programs to encourage work life balance amongst their employees. improved employee retention. (2012).Managers play an important role in the success of work/life programs.com/resources/turnover-rate-ratio. Integrating work life balance in the organization’s culture will benefit all The consequences of not implementing work / life balance programs properly is directly related with the loss of (and potential disadvantage in attracting) talented human capital. The HR department must keep them in close confidence to achieve the desired outcome of the policies.retensa.7 There are a number of additional benefits for organisations in contributing to the work/life balance of employees. Positive employer branding. reduced absenteeism. [27 Nov 2012] 12 .C. reduced turnover. Empirical studies show that the mere convenience of wide-ranging and liberal work/life policies does not essentially result in extensive utilisation by employees or subsequent improvements in work/life balance and reductions in work/life conflict. Proactively establishing flexible work arrangements such as flexitime. a compressed work week or telecommuting. the reality for many employees is not always in sync with what the management supposed it to be. IV. These include outcomes such as increased productivity.

government and university sites. [online].In several studies.Employees’ dislike of those using flexible arrangements. 2000) and has received many awards for work life balance. • Gendered Perceptions . [17 Nov 2012] 13 . Available: http://www. • Time Expectations .” -SAS CEO and co-founder Jim Goodnight SAS is the business analytics software company founded in 1976. long working hours have been identified as a signal of commitment.com/company/about/index. This subsequently forces some employees to choose between achieving balanced roles and progressing in their careers.000 business. SAS is known for its “utopian” working environment (Bankert. Performance of employees should be judged only on the basis of their achievements of their objectives or goals set by the organization. Its mission is to deliver proven solutions that drive innovation and improve performance8. [16 Nov 2012] 10 ‘Awards: Awards won by SAS’.com/awards. Available: http://www. SAS [online]. (Hudson. Lee. Jim Goodnight says.sas. productivity and motivation for career advancement.html. Available: http://www. • Co-worker Support .Although the language of organisational work/life policies is generally gender-neutral and non-discriminatory. SAS employs 13.• Career Consequences – The main reason behind an under-utilisation of work/life policies is the perception of negative career consequences. contributes to a work environment where the utilisation of available opportunities is not encouraged. Men too should be made a part of the policies to make it a general practice rather that an exclusive one.sas. Case: SAS “Our employees are the lifeblood of our success.sas. SAS realizes that its power is in its people. 8 ‘About SAS: Providing organizations with The Power to Know® since 1976’. As the CEO. 2005) V. Employees should be assured that them making use of any of the programs will not be come in the way their career opportunities.349 people all around the world and helps its customers at more than 60. these policies have revolved historically around facilitating the working conditions of women. [17 Nov 2012] 9 ‘SAS on FORTUNE Best Companies to Work For list in US’. The management should bring about a culture in the organization where work life balance is respected and looked in a positive way.com/news/preleases/2012fortuneranking.html. 1 in the world for best workplaces10). Lange. SAS [online]. health care and childcare9 (in 2012 SAS ranks no.

Available: http://www. Our stimulating work environment and high levels of trust provide employees with the freedom to test new ideas. fitness centre and many others perks. [online]. Graph 2: SAS Annual Revenue 1976 – 2011 Source: SAS13 The basic idea is simple: “Satisfied employees create satisfied customers. cafeteria with live music. Lee. [16 Nov 2012] 13 ‘About SAS: Providing organizations with The Power to Know® since 1976’. on-site salon.sas. What is more.“SAS’ most important asset is its 'creative capital’.com/news/preleases/2012fortuneranking.html.”11 SAS also knows that only happy and committed employees might drive results. SAS [online]. Available: http://www. while maintaining a healthy work-life balance. creative employees drive results. Vice President of Human Resources at SAS. SAS offers flexible schedule. [17 Nov 2012] 12 ‘SAS on FORTUNE Best Companies to Work For list in US’. 11 ‘About SAS: Providing organizations with The Power to Know® since 1976’.com/company/about/index. said that “SAS employees understand how important their contribution is for the company's success.html.sas.html.sas. Available: http://www.com/company/about/index.com/company/about/index.html. [17 Nov 2012] 14 ‘About SAS: Providing organizations with The Power to Know® since 1976’.”14 To attract and retain high potentials SAS provides to its employee’s two childcare centres. SAS [online]. Available: http://www. SAS [online]. This recognition proves yet again that happy. [17 Nov 2012] 14 . Jenn Mann. health centre.”12 And that SAS' politics lead to success is proven by its revenue growth and profitability (see graph 2). unlimited sick days and a 35-hour workweek (Bankert. private offices for each employee.sas.

It is not about money otherwise they could easily be bought by other company (Bankert. While regular software organizations of SAS' size lose around 1000 employees per year. Childcare centres are for employees' children ages 6 weeks to 5 years old. provide a family-friendly environment which he knew is key for recruitment and retention of talents. the growing scarcity of talent. SAS loses around 130 employees. Lee. 2000). companies today—more than ever—must regard their human capital as an asset worthy of continual investment because companies that do so enjoy better economic performance. and no coveted offices for executives. no reserved parking spaces (except for company vans). and an employer-employee relationship weakened by persistent economic pressures. (2012). Organizations 15 ‘Realizing the Value of People Management: From Capability to Profitability’. [27 Nov 2012] 15 . Available: https://www. Lange. All the benefits are available to all SAS employees – to engineers as well as to childcare workers. 2000). 2000).15 Today. Executives had their own dining room and park places. companies should aim for a people strategy that drives their business strategy.bcgperspectives. Lange. He saw that employees were not trusted. [online]. 2000). 2000:2) From flexible work time benefit mostly employees who are parents because they can participate in special events at their children's school or pick them up every afternoon. “What’s not available is perhaps even more telling: there is no executive dining room. People didn't work because they enjoyed it but because they had to. Bcg. They were checked if they really work by timecards. SAS' unique work environment is what makes people stay. Conclusion & Recommendations With the pressures of globalization. VI. Goodnight's approach is providing his employees what he would appreciate if he were an employee.” (Bankert. All employees also enjoy 2 weeks of paid vacation.perspectives. Based on this experience Goodnight decided that his own company will be fun and stimulating. It all started in NASA where Jim Goodnight worked before he founded SAS. Lee. There are also many family activities during the year such as spring picnic or Halloween party. Lange.com/content/articles/people_management_human_resources_leadership_from_cap ability_to_profitability/. those who work for the company for 5 or more years have 3 weeks of paid vacation (Bankert. Lee. It means that SAS saves $60 to $62 million by reducing recruiting costs (Bankert. Lange.Lange. Lee.

should focus on the non-financial motivators to drive their high potentials. such as overheads (electricity etc. Available: http://www. reduced turnover and higher retention. Change the widespread perception that visibility = productivity. and reduced work/life conflict. • Organizations should bring about a culture which focuses on effectiveness rather than length of work hours. McKinsey Quarterly. 16 ‘Motivating people: Getting beyond money’. broken up. autonomy and feedback. greater productivity. the organization should consider the benefits of having employees physically present for less time. Sometimes this is a matter of being creative.16 Organizations that support high performers’ work and personal demands make it easier for them to stay engaged and perform when at work. Further in the cost effective corporate world. 1. Although this task might seem a little daunting for the HR workforce but the rewards will be there. Acknowledge that employees whose work and personal lives are balanced bring significant flow-on benefits for organisations. [online]. 3. [27 Nov 2012] 16 .) and potential reductions in office space requirements. task identity and significance. Recognise that to be at their best. employees need to view their work as personally meaningful. re-allocated or performed at different times or locations. thinking about how the job or tasks it demands might be shared. Use communication technologies and skilful time-management strategies to boost output.mckinseyquarterly. • Inspect the job design that each employee undertakes and attempt to maximise satisfaction by providing skill variety. A number of recommendations. based on current thinking and empirical literature may assist readers to work towards making work/life balance both a strategic goal and a reality in their organisations. done differently.com/Organization/Talent/Motivating_people_Getting_beyond_money_2460. These include: • Organizations encouraging work life balance amongst their employees will bring about improved organisational commitment. 2. (2009). • The management should be open about the potential for a broader range of jobs that might be suitable for flexible arrangements. reduced absenteeism.

necessary for physical and psychological health and will not damage career prospects. Senior managers in organisations need to ‘walk the talk’ and demonstrate that balancing paid work and non-work activities is positive. (Hudson. Both employer and employee need to be willing to bend a little. Ensure that formal policies in place are consistent with what employees actually experience. • To maximise the benefits of flexible working hour arrangement for both parties. Adopt a ‘give and take’ philosophy. They must ensure that employees using work/life policies are not overlooked when promotion opportunities arise. • The HR department should provide information and assistance to managers and supervisors about how to promote flexibility and work/life balance. 5. Further the employee should also be willing to change the work-at-home day (or forgo it altogether) if his or her physical presence is required. Policy provision alone is not sufficient to ensure employees’ work/life balance. • It should be well communicated within the organization that work life balance and the use of flexible options are not just for women with family responsibilities. 2005) 17 .4. coworkers would need to avoid scheduling meetings that involve the individual during his non available hours.

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