Even Apple Worries about Employee Retention


I have an iPhone, an iPad, AppleTV, and recently (because intuitively I knew integration was key) bought a MacBook. Granted, after switching from a PC I still struggle with how to scroll on a screen and have yet to figure out how to change my desktop picture, but how they work together is cool.

That cool factor is what lures and commits employees to Apple. Working on the latest-and-greatest, on the cutting-edge of technology; the working stiff equivalent of being a part of the in-crowd and eating at the cool table. Being cool, is, well, cool – makes you feel confident, and frankly, better than others. It’s an ego-boost, and a compelling reason to stay at an organization. 

Couple the ego trip with a dose of success, and it’s doubly hard to leave. Cool, confident and collected are, quite simply, symptoms of success. Being good at what you do, at a company that’s good at what it does – why bother leaving? What could be better?

Up, up, up: the employment roller coaster creeps up to the summit, and its riders are thrilled by suspense. Why do they cease to breathe, waiting with baited breath? Because they know what goes up must come down. Even Apple will experience downturns, even if slight. When you’re on a rocket ship, even a nearly imperceptible stall is scary.

The Wall Street Journal (http://tinyurl.com/atuxe9h) reports Apple CEO Tim Cook just started exploring the world of employee benefits, such as product discounts and matching charitable donations. As Apple works to satisfy employees’ needs to better control their jobs by making project assignments more flexible, he also shows his appreciation by “gushing” about employees to the media. Presumably, you can’t go too wrong by showing employees the love. This is a positive, smart move by Cook, but if done wrong, Apple can experience hazardous pitfalls completely detrimental to employee motivation.

The Positive.

Apple’s employment brand has all of its, well, apples in one basket: you are cool if you work here. You are helping us change the world through technology, and that’s pretty awesome. We are successful, and as an employee, so are you…which makes you cool. As I alluded to above, that’s all well and good if the company always hits production targets and its stock continues to pay healthy dividends.

But if there is a blip–say, if a typhoon forces closure of a sub-assembly plant, delaying a launch–and Wall Street reacts negatively, there goes your employment brand. Employees' commitment to Apple is driven by factors often far outside of employees' control, and that is especially true for the rank-and-file. If those factors fail, so does employee engagement and commitment. If Apple has a bad quarter, the adrenaline rush is soon over. All it takes is an openness to consider other positions; as one recruiter said in the WSJ article, “[Apple employees] are picking up the phone when I call….I used to be stonewalled.”

To diversify your portfolio of employee engagement drivers–the aspects of work that make it easy to get excited and tough to leave–is mitigating this risk.  By offering the perks and benefits that talent competitors have, Apple counteracts some of the reasons to leave. A message of “I value you” can belay a knee-jerk reaction when “I’m not that cool anymore” threatens employee identity.

The Pitfall.

Apple has built a strong workforce despite a lackadaisical demonstration of its value of employees. Why? Because going above and beyond to reach a goal elicits the “justification effect.” Seen often in high-cost-of-entry organizations like fraternities, a sense of identity is built by running through the gauntlet–the more difficult the tasks completed to get in and be a member, the more people will justify the effort they put forth to get there. These excuses become part of the internal dialogue and justify, for employees, putting up with long hours and tough bosses. In other words, people–all people–need to feel like they are making smart choices. If there wasn’t a good reason for running the gauntlet, they’d just be stupid for taking the abuse – and no one likes to feel stupid.

When employees internalize their motivations for working hard, they are intrinsically motivated to do their job. Research has found that offering external motivators for work, such as pay-for-performance schemes or just plain cracking the whip, can actually extinguish intrinsic motivation, making employees dependent on external factors to fuel their interest in their jobs. Furthermore, these external motivators have to continue to increase. Over time, they extinguish themselves by simply remaining the same. Employees think to themselves, “Yeah, you loved me last year, but how do you like me now?” Most leaders find themselves in a game using an ever-increasing amount of carrots and sticks.

Finding the Balance.

Cook and Apple’s HR are on the right path–they need to proactively manage the risk of employee flight should the company face challenges in the future. Apple’s tricky task is to give employees signals that they are valued without dousing the flame of intrinsic motivation.

Hiring the right people helps. Apple's current brand of “successful cool” attracts employees who value high performance and being on the cutting-edge. Their career site says, “You’ll be challenged. You’ll be inspired. And you’ll be proud. Because whatever your job is here, you’ll be part of something big.” They extol the virtues of detail-orientation, continuous improvement, and creativity. They are hiring people that fit the way they work and are matching what Apple offers to applicants’ motivations. Now leaders need to ask themselves, is that brand sustainable in an Apple downturn? How does it translate to a quarter wrought with challenges? Will it keep employees from jumping ship?

Historically a top-down approach, Apple is also flirting with giving employees more choice in assignments. If managed perhaps by a combination of high past performance and tenure, the option to be able to choose the sexiest projects might just convince people to stay as they rack of the tenure needed to have more control over their jobs. Think frequent flier miles: the more experienced you are, the more perks you get. Using this approach, the employee retention isn't based on vesting stock, a strategy that will keep people until, of course, the stock vests.

Another driver of engagement is disciplined career management. Cool projects, expat assignments, internal leadership in improvement initiatives, and–yes–upward mobility can all increase the employment stickiness factor.

In short, employees stay if, looking beyond the doldrums, the horizon is bright. Recognizing and investing in employees during challenging times and giving them a clear view of their future after the doldrums signals value. Feeling valued sparks the need to return the favor, strengthening the value employees’ feel for the organization. This kind of exchange is more sustainable than the gauntlet approach–a kinder, gentler way to improve employee engagement and commitment.

(PS, If you'd really like to better understand how to drive employee engagement in your company, join our membership program or read our recently released Employee Engagement Market Brief.) 

Jeff Mike

Jeff Mike leads Bersin by Deloitte’s HR Operations and Service Delivery research He integrates rigorous research approaches with his extensive experience leading HR functions to engage diverse practitioners and to generate actionable knowledge Jeff also teaches HR to business people and business to HR people, formally at the graduate and undergraduate levels, and informally in organizations through his boundary spanning, consultative approach to problem solving and capacity building.

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