Justin Lin, Virginia Milleson, Ruite Zhu Executive Summary Question: How can organizations best equip their managers to be effective in fostering a positive work experience for their employees and how do those best practices relate to retention? Introduction The question of how to enhance employee retention has gained prominence within organizations. Managers are significantly linked to the retention rate since they directly shape the employee experience. This report will concentrate on best practices for managers to enhance the employee experience using the Leader-Member Exchange theory. Four main dimensions of this framework as well as corresponding best practices will be discussed in the following sections Leader-Member Exchange Framework The Leader-Member Exchange theory is a framework that draws direct connections between supervisor-employee relationships, personal characteristics, and other contextual factors to workforce outcomes11(see Fig. 1). In the interest of the research question, we will only focus on the relationship between leader/supervisor characteristics and employee turnover. Four key factors contribute to employee experience: transformational leadership, contingent reward behavior, employer expectations of employees, and employer agreeableness. Transformational Leadership Transformational leadership has been linked to employee satisfaction and retention5 . In contrast to transactional leadership where leaders are process-oriented, transformational leadership is a people-oriented approach to management. It focuses on development, motivation, and support. Effective transformational leaders exhibit the following to support their employees and stimulate creativity within the team10: ● Demonstrate inspirational leadership and embody idealized influence ● Serve as role models, coaches, and mentors ● Assign challenging tasks but treat failure as a learning opportunity ● Maintain an optimistic outlook and express confidence in achieving goals Transformational leadership behaviors can be taught effectively using either internal or third-party training programs3. (Appendix II) Contingent Reward Behavior Performance recognition significantly contributes to the leader-member relationship. Employee recognition entails acknowledging employees' exceptional or positive contributions6. This recognition can manifest through various means, including tangible and intangible awards. The primary goal of employee recognition is to reinforce desired behaviors and improve work performance9 . The best practices to effectively reward employees include the following: ● Recognition Culture: Companies can foster a recognition culture using social reward systems (e.g., give employees points or kudos to reward others), regular appreciation activities weekly or monthly, and the norm of appreciating everyone from top to bottom2 . ● Recognition Strategy: Aligning the holistic recognition strategy with business results is crucial. Starting from the end goal of recognition, any new recognition program must define how it is going to change key goals, performance, or behaviors4. Justin Lin, Virginia Milleson, Ruite Zhu ● Audience Analysis: Consider the target audience in terms of various job levels and their distinct intrinsic and extrinsic motivations. Individuals vary in how they prefer to be recognized, for what achievements, and by whom4. ● Grant rewards based on needs: Cash is not always the best reward for employees. Additional physical rewards such as promotions and benefits, and psychological rewards such as compliments and encouragement can be given to employees to strengthen the leader-member relationship14 . Employer Expectation Supervisor expectations of their employees and the latter’s awareness of those expectations set strong first impressions that frame the rest of the relationship going forward. To that end, training supervisors to be able to establish trust with their subordinates early on is key to cultivating relationships that lower turnover intentions7 . However, it’s not as simple as hiring more trusting supervisors; in a sales team environment, this led to a reduced feeling of trust in the supervisor by subordinates (possibly explained by too much hands-off supervision). Therefore, training should also focus on how supervisors are to signal trust through their interactions. Another dimension in establishing employer expectations is defining clear work-life boundaries. In the higher education industry, sustaining work-life balance practices leads to increased job satisfaction, as well as a decrease in academic employees' intention to leave12. Allowing employees to have a sense of boundary control can lower stress and improve the management of personal and professional responsibilities. Here are some examples of work-life boundaries that managers can discuss with their employees13 : ● Communication - When is it acceptable to call/text/email? Are there any times that are off limits completely (ex. Sundays are reserved for family)? ● Working Hours - When is the employee expected to be in the office and/or online? Are hours flexible day-to-day? Is there a busy season where those expectations may change? ● Personal Circumstances - Does this person care for an elderly relative? Are they a parent? Are they in graduate school? Agreeableness Agreeableness, exhibited by cooperativeness, kindness, friendliness, and similar behaviors is a key leader-characteristic outlined by the framework. Supervisors should undergo emotional intelligence training in order to gain the necessary skills to interact similarly with their subordinates. In addition to increasing employee retention, leaders with emotional intelligence are better at helping employees manage emotions and building more positive working conditions, consequently achieving more positive service outcomes for external customers1. Conclusion In summary, this report provides insights about how to strengthen the relationship between managers and employees to improve employee retention rates. Best practices to cultivate transformational leadership, provide contingent rewards, clarify employer expectations, and achieve agreeableness have been discussed and can be incorporated into leadership training. However, for future implementation, more demographic factors, such as gender and race, need to be considered Justin Lin, Virginia Milleson, Ruite Zhu Appendix I: Related Figures Figure 1: Complete Leader-Member Exchange Theory Framework Source: https://www.collidu.com/presentation-leader-member-exchange-theory Appendix II: Transformational Leadership Course Examples LinkedIn Learning: 1-hour course on the fundamentals of Transformational Leadership led by Leadership expert Henna Inam. Can be completed asynchronously and results in a certificate of Transformational Leadership for participants. American Management Association: “Transformational Leadership: How to Inspire Extraordinary Performance” is a 2-day virtual or in-person course focused on skill-building and creating real change within an organization. Appendix III: Reference 1. Bande, B., Fernández-Ferrín, P., & Castro-González, S. (2020). Trusting and being trusted: Examining the influence of supervisor propensity to trust on salesperson turnover. [Trusting and being trusted] Personnel Review, 49(6), 1213-1231. 2. Bersin, J. (2015). Becoming Irresistible: A New Model for Employee Engagement. Deloitte Review, Issue 16. 3. Brown, W., & May, D. (2012). Organizational change and development: The efficacy of transformational leadership training Journal of Management Development, 31(6), 520-536. 4. Daunt, V., & Menzies, V. (2021). Recognition Programmes: Are They Important? 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The International Journal of Human Resource Management, 31(3), 356-384. 10. Mostafa, S. (2020). The four aspects of transformational leadership. Society for Human Resource Management. 11. Quality Improvement Center for Workforce Development. (2022, July 5). Leader-member exchange. Leader-Member Exchange. 12. Saufi, R. B. A., Permarupan, P. Y., AIDARA, S., Zainol, N. R. B., & Khan, N. U. (2023). Sustaining Work Life Balance Toward Job Satisfaction and Employee Intention to Leave Universities. In Academy of Management Proceedings (Vol. 2023, No. 1, p. 14613). Briarcliff Manor, NY 10510: Academy of Management. 13. University of Illinois at Urbana-Champaign, News Bureau. (2020). Control over work-life boundaries creates crucial buffer to manage after-hours work stress. ScienceDaily. 14. Vickberg, S., & Langsett, M. (2019). It’s Time to Rethink Your Employee Recognition Strategy: How People Want to Be Recognized in the Workplace. 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