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The Trouble with Tenure

An academic study found that workplace longevity hinders performance. But to some HR experts, it's not so cut and dried.

Tuesday, July 23, 2013
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A recent academic study reported that, contrary to common HR thinking, experience -- in this case job tenure -- is not a predictor of improved performance. In fact, say the authors, the reality may be quite the opposite, meaning the longer the tenure, the more likely performance will suffer.

The study, co-authored by Thomas Ng at the University of Hong Kong and Daniel Feldman, at the University of Georgia, looked at dozens of studies and other data to conclude that employers may be putting too much value on experience and tenure in a workforce. In fact, tenure often leads to lower performance. In their view, employers should put more emphasis on merit-based compensation plans and also boost the effectiveness of their performance assessment systems.

Not unexpectedly, the study, which was published in the Journal of Vocational Behavior in late June, has drawn a strong reaction from some HR experts (attempts to reach the authors were unsuccessful).

Rick Guzzo, a partner working in Mercer's Workforce Sciences Institute in Washington, says that, while very detailed and comprehensive, Mercer's work in this area takes a "deeper dive" into the data and found that what is true for one employer is not necessarily true for another.

"The study looked at an enormous number of employed people, and it does have some power within its findings," he says. "But I would say that I thought when it got to the implications of job tenure versus organizational tenure, things got blurred a bit."

In other words, Guzzo says, there is a big difference between what this study is about when it comes to length of service in a specific job compared to tenure with an employer. For example, a person could be with the same employer for 20 years and have eight-to-10 different jobs. That is a critical distinction, Guzzo says, when it comes to the implications for action on an employer's part.

Guzzo adds that measuring performance is necessary, but he says other positive outcomes, including retention and promotions, should also be considered in the overall measure of employee success and productivity.

"As a general point, from our deep dives into the data using a one-client-at-a-time approach, we see a lot of variability from organization to organization in terms of tenure on the job or within an enterprise," he says. "The nature of this paper is finding a commonality, but we are seeing a lot of variance. Every organization is unique in the ways people are hired, trained, etc., so it makes for a lot of variation."

Jim Grew, president of The Grew Company, a CEO-level strategy and leadership consultancy in Portland, Ore., says that the study is an example of "perverse" research that doesn't mean what it seems to mean.

"It suggests that frequent employee turnover would be beneficial, which makes no sense," he says, adding that, in his view, it actually supports the "Hawthorne Effect" studies in the 20's, which found that people do better over time when their job environment is changed.

"The point is that change and growth, if titrated carefully to the individual's tolerance for uncertainty and change, can stimulate both performance and job satisfaction," he says.

Grew also says he is not aware of any data that says that only because employees have been with a firm for a long time does their performance erode.

"Boredom needs an antidote, of course, but longevity contains much of the unique culture of the firm, and is necessary for it to remain strong and competitive," he adds.

Phyllis Ezop, president of Ezop and Associates in La Grange Park, Ill., believes avoiding "either/or" thinking is a major challenge when assessing the implications of this type of research. Either/or thinking in this case, she says, means that longer tenure is either beneficial (due to knowledge and skills) or is not beneficial (due to boredom and low motivation). 

"The reality is more complex and less clear cut than an 'either/or' scenario," she says.

 According to Ezop, performance may very well suffer when boredom afflicts those with long tenure. But, that doesn't mean companies should strive to reduce employee tenure. Instead, businesses succeed by building on their strengths, and there is strength in the expertise of those with long tenure. 

"This research study serves as a reminder that companies need to tap the valuable expertise of longer tenured employees despite potential obstacles from boredom or reduced motivation," she says. "Furthermore, not all longer tenured employees are bored or less motivated."

Of course, Ezop says, companies can also take advantage of the fresh perspective, greater enthusiasm for the work and, possibly, increased productivity that employees with shorter tenure may offer.  But, the expertise of longer tenured employees needs to be harnessed to help guide those newer employees.

"The wisdom of experience can be valuable when setting direction for what shorter tenure employees do, even if newer employees are able to carry out the work activities more productively than their longer tenured counterparts," she says. "The expertise of longer tenured employees can help companies avoid serious problems that could easily be prevented with the wisdom of experience."

Ezop adds that companies that use this research study to disregard the value of experience may be doing so at great peril. To achieve success, companies must find the right balance between the value of experience and the advantages offered by shorter tenured employees.

Jesse Sostrin, president of Sostrin Consulting, in San Luis Obispo, Calif., and author of the upcoming book titled Breakthrough Performance: Uncovering the Hidden Path to Success at Work, says one way to avoid the inertia that can potentially develop over time is to increase the employee's capacity to take a greater degree of control over the quality and trajectory of their working life.

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He says it is not the length of time one spends in a specific job with a particular company; it is the quality of the contribution during that time. Employees can maximize their investment of time in an organization by defining and pursuing their own long-term career goals while staying true to the mutual agenda. The mutual agenda then defines the powerful space where individual goals and desired contributions intersect with organizational objectives.

"What matters most to individuals is recognizing their own unique path to adding value to the organization and creating opportunities for their professional growth and advancement," he says. "And where this matters most is at the intersection of individual performance and team/organization needs."

He adds that, whether you are an individual contributor, manager or senior leader, there is a mutual agenda where your own aspirations for your career and the quality of working life you seek will align with the specific needs of your team and organization.

"Drawing momentum from this synergy can be the counter-balance to complacency, boredom and the steady decline of meaningful engagement," he says.

Don Maruska and Jay Perry, co-authors of Take Charge of Your Talent: Three Keys to Thriving in Your Career, Organization and Life, say the study seems to confirm the basic thesis that to gain long-term engagement and employee satisfaction, tapping the intrinsic motivation of individuals is far superior to stick and carrot external motivators.

"Our view is that an individual's ability to fully use their talent has a strong relationship to issues of motivation. In fact, our survey results show a close correlation between use of talent and employee satisfaction," Perry says. "We also think it's important to recognize that this is not only about people who are bored. Even high performers have 30 percent to 40 percent of their talent untapped. Thus, there is a win-win opportunity for long-term employees and their organizations to figure out how to unlock that untapped talent."

So what is the real value in this research for the HR executive or manager?

According to David DeLong, president of David DeLong & Associates, a talent-management consultancy in Concord, Mass., the report is a very academic study and makes sense on a logical level, but when you drill down, much of the literature cited is 20 to 30 years old. In recent times, DeLong says, work has become much more complex as the workplace and the nature of technology has changed and evolved.

"Also, veteran workers not created equal," he says. "There is a distinction between knowledge workers who have a long half-life and those whose knowledge is becoming obsolete," he says. "Smart HR leaders have programs, not policies, about how to value and treat experienced workers. You can't have a blanket policy [for] how you treat experienced workers."

DeLong adds that if anything, the study does show the importance of effective performance management systems in dealing with a veteran workforce - a way to sort valuable performers from low performers.

"That is one positive takeaway and it points to the need for effective performance management systems, which has been an elusive goal for many HR executives," he says.

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