How to Improve Employee Retention with Maslow’s Hierarchy
Steven Imke — July 15, 2019 — July 15, 2019
There are two types of employee turnover-avoidable and unavoidable. For unavoidable turnovers, such as when a person dies or retires, there is very little a company can do to prevent it. However, too many businesses simply focus on the recruiting end and fail to address employee retention, which results in an avoidable turnover.
The costs to replace an employee is estimated to be 150% of an employee’s annual salary and benefits. Therefore, employee retention should be something that every business, whether large and small, should consider if they hope to avoid disruption and the high cost of avoidable turnover.
Abraham Maslow theorized that people are motivated by five types of needs, which he ranked into a hierarchy. Each individual’s current situation dictates which level of need is the most critical for them at any specific point in time. How an employer meets these needs changes with each level and contributes toward employee job satisfaction, resulting in lower turnover and higher employee retention rates.
The 5 levels of Maslow’s hierarchy of needs, from bottom to top, are as follows:
- Survival
- Safety
- Belonging
- Self-Esteem
- Self-Actualized
Depending on the employee’s situation, they could be at the bottom of the hierarchy at the survival level-sometimes referred to as Physiological or at the top at Self-Actualization. Maslow believed, like many managers today that before incentives designed to provide a sense of belonging, self-esteem or opportunity for growth as part of self-actualization can be effective, employees must feel that their needs for survival and security are being met.
The following is a description of each level and what motivates the employee.
Survival – Motivation = Money
Many non-skilled, low-paying, entry-level employees operate in a perpetual state of survival. At this level of Maslow’s hierarchy, motivation is almost entirely about money. Based on the employee’s lower wage, a raise or a new job that pays just 50 cents more per hour can be life-changing, and represents a large pay increase.
Employees at this survival level are just one flat tire away from bankruptcy. Money for this cohort is so tightly controlled and carefully spent that almost any position with an increase in pay is a wise choice for them.
Safety – Motivations = Security
Once an employee’s survival needs are met, the employee is motivated a bit differently. At this next level, safety comes in the form of personal safety and also job security. While a person that exists in the survival level may do whatever it may take to keep the wolves away including taking safety risks, once their basic survival needs are met, safety becomes the next prime motivator.
Safety for some may mean working in a place with a zero-tolerance policy for violence. For others, it may be avoiding stressful situations such as a toxic work environment where a boss always yells at them. Whatever the safety issue is, working environments that make the employee feel unsafe induces a level of fear that keeps these employees at an unproductive level.
Until a person’s survival and safety needs are satisfied, the employee remains self-focused and is unable to do more than the bare minimum to keep their job.
Belonging – Motivation = Being Part of Something
The third level moves an employee’s motivations outward toward relationships. At this stage, being accepted as part of a group or a team is a major motivator.
Since approval from managers is important to employees at this third level of Maslow’s hierarchy, motivators such as recognition programs, different work structures, peer interactions, and being part of a team enhance employee performance and retention.
Self-Esteem – Motivation = Respect and Confidence in them
With a person’s sense of belonging met, an employee’s self-esteem becomes the next primary motivating factor.
A supervisor can build the self-esteem of their employees when they express respect and confidence in their employees’ capabilities. Job titles are also important to this cohort. Companies with employees at this level often encourage employees to participate in quality improvement and public recognition programs, especially if participation can result in earning awards, certificates and the admirations of their peers. With confidence and high self-esteem, employees are significantly more likely to “think outside the box” or “think like an owner”, and make the effort to improve their own performance for the betterment of the company.
Self-Actualized – Motivation = Self-Directed
Finally, in a few organizations, employees are encouraged to achieve the highest level of motivation and to meet their own self-actualizing needs. At this level, the employee focuses on the greater realization of their own personal potential.
Companies with employees at this level should offer sabbaticals and encourage employees to pursue outside educational opportunities, engage in public speaking and author articles and papers. Employees at this highest level are self-starters and independent thinkers who will help move your company beyond its current boundaries.
Where do you rank your employees according to Maslow’s hierarchy of needs and are you providing them with the right type of motivations?
Discover why employee retention is such a big deal and how to make your business an employer of choice establishment.
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