In Tight Labor Market, Thoughtfulness is Wisdom
By Amy Zipkin • New York Times

May 31, 2000 -- Every few weeks, some Silicon Valley start-up tries to lure Mary Morse, a software engineer, away from Autodesk, a computer-aided design company in San Rafael, Calif. At least one of them has dangled an options package that could have made her rich by now.

But Ms. Morse invariably says thanks, but no thanks. The reason she is staying put, she says, is simple: she likes her bosses.

There is a lesson here for managers that they ignore at their peril in the current job market. Being a tough guy might have worked a decade ago when corporate America was downsizing and laying off workers by the millions. But that era, exemplified by Albert J. Dunlap, the roving chief executive nicknamed Chainsaw Al who boasted about how many people he had dismissed to raise the stock price of his companies, is over.

The American workplace has evolved to a kinder, gentler state. With unemployment at a 30-year low, bosses realize that they have to do more than pay good salaries and lavish perks on their employees if they want to keep them. They also have to be nice to them.

And now comes a Gallup Organization study that shows that most workers rate having a caring boss even higher than they value money or fringe benefits. In interviews with two million employees at 700 companies, Gallup found that how long an employee stays at a company and how productive she is there, is determined by her relationship with her immediate supervisor. "People join companies and leave managers," said Marcus Buckingham, a senior managing consultant at Gallup and the primary analyst for the study.

Ms. Morse's two-year career at Autodesk is Exhibit A for that reality. She has worked under several managers so far, she said, and they have all gone out of their way to please her. The first one guided her through a six-month internship, accommodating her college schedule and providing time off for finals. The second sealed her loyalty to the company by insisting on paying her $5,000 more than she requested as her starting salary.

"I think what he said without saying it was, 'You're more valuable than even that, and I'm going to give you what you're worth,'" she said.

Then that manager's supervisor approached her unexpectedly and asked to be her mentor -- an offer that she says filled her with "shock, amazement and delight."

Ms. Morse accepted, and the supervisor asked her to draw up a list of short-term and long-term goals. She provided her with a list of training courses, both inside and outside the company, that would help her meet those objectives. And finally, the supervisor contacted Ms. Morse's boss to make sure he would give her the time off to take the classes.

Enter boss No. 3, David Lein, Autodesk's automation manager. Mr. Lein, Ms. Morse said, summoned her to his office from time to time to discuss her career hopes. After she completed a project for the redesign of a large piece of computer code, he asked her what she wanted to do next. When she said she wanted to be a software engineer, he recommended classes and gave her the time off to go.

Two months ago, Mr. Lein and other managers arranged for Ms. Morse's transfer to a position testing more complex software designs, even though she lacked the experience that was supposedly required for the job. While not technically a promotion, the job required more expertise than her previous one and was a logical step to a higher-paying job.

All the kindness she has received the last two years, Ms. Morse says, is literally worth a million dollars to her. Before she joined Autodesk, and again nine months after her arrival, she was wooed by a telecommunications company that specializes in high-speed data transfer.

Both times, she says, the company had not yet gone public and offered her 7,000 stock options at an exercise price of less than $1 a share. She was tempted, but rejected the offer after she was told that although she had career aspirations for software development, the company would not honor them. The interviewer told her, she said, "If I hire you, you'll remain here in testing."

Had she accepted, she would be sitting on options worth $1 million at the current stock price. But she has no regrets. People at the company that wanted to hire her tell her they are bored and frustrated. "The general feeling is that they are putting in their time," waiting for their options to be vested so they can bail out, she said.

And friends at other Silicon Valley firms complain to her that they have trouble getting up in the morning, telling her, she says: "This thing worked out great, but I'm miserable."

Workplace specialists say Ms. Morse's experience is not unusual -- nor is the unhappiness of her acquaintences at other companies. The No. 1 reason people quit their jobs, they say, is dissatisfaction with their supervisors, not their paychecks.

"It's taken a tight labor market for employers to think through the social contract they are striking with people," says Charles O'Reilly III, visiting professor at the Harvard Business School and co-author of "Hidden Value: How Great Companies Achieve Extraordinary Results With Ordinary People," which is to be published this year by the Harvard Business School Press. "When job opportunities are plentiful, people with crummy bosses leave."

In fact, they are four times more likely to leave than are people with nice bosses, according to a 1999 study conducted by Spherion, a staffing and consulting firm in Ft. Lauderdale, Fla., and Lou Harris Associates. In the survey, only 11 percent of employees who rated their supervisor's performance as excellent said they were likely to look for a job in the next year, while 40 percent of those who rated their supervisors' performance as poor were likely to jump ship.

To be sure, there are plenty of bosses out there with mean streaks, especially in highly competitive industries like movie-making or macho strongholds like oil. Scott B. MacKenzie, a professor at the Kelley School of Business of Indiana University who has studied workplace behavior for several years, says "jerks" can still rise to the top if they are stellar performers.

Moreover, being nice to employees is not a magic potion against defections. The big layoffs of the late 1980s and early '90s all but destroyed the tradition of loyalty to the company and replaced it with a new culture of job-hopping. "With downsizing, companies begain saying, 'Don't expect a long-term future here, but keep your skills up to date'," says Mark Roehling, a professor at the Haworth School of Business at Western Michigan University. Employees complied, he says, with the result that many will leave as soon as a better offer comes along.

What should a company that is plagued by defections do? Change its ways, advises B. Lynn Ware, an industrial psychologist who heads Integral Talent Systems in Menlo Park, Calif. If a company learns that a valued employee is disgruntled, it should discuss it with him. "You say something like, I really want you to have a better work experience than you've had recently," Dr. Ware said.

Some old-economy companies are training managers in the art of benevolence. Macy's West, a division of Federated Department Stores, in San Francisco, recently began a pilot program of assigning mentors to new managers and telling all managers that up to 35 percent of their compensation would be linked to how well they retained the people under them.

The policy has apparently encouraged managers to be more accommodating to employees' needs. Ellen Murrin, a group sales manager for women's ready-to-wear clothing, for example, said she was now more likely to grant requests for schedule changes and time off than she used to be.

Other companies are also pushing their managers to be friendlier. An International Paper plant in Moss Point, Miss., holds morning training sessions on positive reinforcement, and David Sulik, a paper-machine superintendant, says they have changed his ways.

He used to hover and watch for mistakes. As a compliment, he would offer a pat on the back or a curt "good job." Now, he has cut back on the criticism and become more effusive in his praise, even writing the occasional thank-you note to an employee for an exceptional performance. He also chats with workers more than he used to.

"I think they trust me more than in the past," he said.

And that trust can pay off. Mr. Lein, the manager at Autodesk who was extra helpful to Ms. Morse, says that just as she has, he, too, has had to resist entreaties from other high-technology companies. He averages two job offers a week, to say nothing of an avalanche of 200 e-mail pitches from headhunters that he filters out with a software program that spots telltale words.

His reason for staying is similar to Ms. Morse's. When he looks around Silicon Valley, he says, "I see people burning out, companies going under and never making it to the I.P.O.

"Maybe I'm a bit of an anomaly," he adds. "Job satisfaction and being challenged means as much to me as the money part of it -- just so long as I feel rewarded."