Many managers choose to focus on employees who are struggling, and allocate less attention to those who are not. But this might not be the best strategy — at least when it comes to organizational performance.
A good manager can boost productivity, reduce attrition and pad the bottom line. But even the best managers only have 24 hours in their day, and to maximize team success they need to allocate their time efficiently. Many managers choose to focus on employees who are struggling, and allocate less attention to those who are not. But this might not be the best strategy — at least when it comes to organizational performance.
“Managers can be strategic, and talk to employees who have reported stress or mental health challenges. This is called the directed allocation of attention,” says Dr. Shannon Liu, an assistant professor at the Rotman School of Management. “Employees with low morale are more likely to leave a firm, and having a conversation with a manager significantly improves this. When an employee has low morale, the benefits of managerial attention are higher.”
But Liu wondered whether a more random approach could be a more effective in managing the entire team. Working with Hugh Xiaolong Wu, an assistant professor at Washington University in St. Louis, Liu designed a study that compared both the directed and randomized approaches at a multinational spa chain in China that has more than 10,000 employees. Work in a spa includes long, physically tiring days, and monthly turnover was 13 per cent, with more departing employees choosing to quit.
For the experiment, managers at 157 different locations were provided with a list of employees weekly, and directed to engage in a 15 to 20 minute conversation with each person on their list. They were instructed to be sincere, make eye contact to build trust and listen more than they talked. They were provided a list of conversational and supportive questions about an employee’s family, hobbies or favourite musician, as well as how they could make their workplace better.
Because the spa chain regularly surveys employees to gauge their job satisfaction, stress and mental health, Liu was able to direct some managers to speak with people who had recently experienced negative emotions. Other managers were asked to speak to a random group of employees.
“Directed attention shows a benefit to retaining an employee, but our study showed that this benefit does not translate to the organization’s attrition rate or to overall productivity,” says Liu. “When managerial attention was randomized, there was a 13.9 per cent reduction in attrition over a six-month period. We interpret our findings as showing that employees think of a manager who randomizes attention as someone who truly cares and supports everyone.”
During the so-called Great Resignation of the COVID-19 pandemic, millions of workers have quit their jobs. There are many reasons for this, but feeling underappreciated is among them. Some people have even thumbed their noses at their soon-to-be-former employers with “quit tok” videos (videos celebrating resignations) that have get millions of views on social media platform TikTok. Liu believes that a randomized approach to managerial attention allocation could help mitigate employees feelings of being underappreciated.
When employees feel valued, they are more likely to stay with a firm, but there are many different ways employees can feel valued. Much of the research into organizational behaviour has focused largely on giving workers greater autonomy, or greater agency in decision-making processes.
“But getting attention from a manager could help make someone feel valued, cared for and supported,” says Liu. “It is not just about a financial reward, but also about creating a team environment. That matters. Employees observe how managerial attention is allocated, and they make inferences about this when they are making long-term decisions about working at a firm.”
While Liu’s studied service industry workers, she expects these findings would apply in other sectors and also to management. After all, everyone wants to feel appreciated — whether they work at the front desk or in a corner office.
Organizations also stand to benefit. At the locations where the randomized approach was implemented, revenues increased by 6.6 per cent, relative to the control group. Liu attributes the savings to lower turnover.
“There are costs associated with hiring new employees,” she says. “You have to train them, adjust schedules, and do administrative work. When we consider revenue, this strategy benefits managers and employees. It is possible that many managers do not realize that retention, in the end, better serves them.”
The findings also highlight a risk associated with data obtained through employee surveys. Organizations need to think carefully about how they act on it, because it might yield unexpected results.
“There is a question about how to use this information,” says Liu. “When you try to be strategic — like by giving attention to employees who have recently reported stress or mental health challenges — it could actually backfire. In some cases, there could be benefits to not acting on the information.”
Shannon Liu is an assistant professor of strategic management at the Rotman School of Management.