It's no secret that health care is undergoing tectonic changes, and as health care organizations struggle to keep pace with a rapidly evolving environment, there's never been a more critical time for the industry to develop and grow its competent leaders, says Tim Butler, senior consulting manager for GE Healthcare's Performance Solutions business. "It's going to be much harder and more complex to effectively manage in health care going forward," he observes. "The complexity of decision-making will only continue to grow. Health care needs its strong leaders—and at the same time, it's also never been more important than it is today that health systems get serious about accountability and performance." Managing employee retention and managing turnover are inherently difficult processes for health care leaders. How do you know if your organization's turnover rate is healthy? Perhaps more importantly, how do you retain the high-performing employees you want while turning over those you don't? Take heart, Butler advises: the two processes, when performed effectively, feed one another. "There's an inverse relationship here," he notes. "There's a distinction between regrettable and nonregrettable turnover, and your regrettable rate goes down as your nonregrettable rate goes up." This inverse relationship can be explained by a simple truth of human resource management: employees are aware—sometimes more aware than their managers—of who among their coworkers is effective and who is not. "With an unsatisfactory employee, the people who are most aware of that person's problems are those whose performance is satisfactory," Butler says. "As you manage ineffective people out of the organization, you have a positive impact on the retention rate for the people you want to keep."Identifying NonperformersWhile their fellow employees may be aware of nonperformers' lassitude, managers need a structured system by which to assess performance, Butler says. "Identifying nonperformers cuts right to the heart of some of the industrial models of performance assessment, including the GE model," he says. "It's based on a meritocracy philosophy, where people's incentives and their performance are based on what they accomplish with respect to some relatively objective articulation of goals." Articulating these goals—and creating a concrete, replicable plan by which to assess whether they're being met—is just one of the many roles played by an organization's operating calendar. "We espouse an approach to running your business in which certain protocols and practices are associated with the organization's operating cycle," says Butler. "If you take operating practices as the platform for organizational performance—the meeting of goals, the achieving of metrics and targets—it's much easier to do when everyone is working based on the same calendar. You're sharing best practices and holding people accountable to them." The actualization of this accountability is based on an objective talent assessment process in which employees are evaluated not only on whether they reached the goals established for their role, but also on how effectively they did so. "We do a lot of work in the health care industry around leadership competencies and values, helping organizations understand what their behavioral anchors are or should be," says Butler. "A lot of times, it's not just about whether you hit your goals; it's also how you did that, whether you are performing in a way that's aligned with the values of the organization." Because employees often have more experience with their peers' performance than their managers do, true talent assessment is incomplete without peer review, Butler stresses. "Talent review should include horizontal assessment, a peer-based assessment of both staff and leaders," he says. "There should be a myriad of ways in which organizations assess performers for optimum objectivity."Factors Influencing RetentionA meritocratic philosophy like that outlined by Butler will aid organizations and their leaders in stratifying employees according to their effectiveness; but a robust system for weeding out underperforming staff is not the only factor that influences retention. "It's a tough job market in health care," he notes. "Folks who may have been ready to retire are probably sticking around a little bit longer. It's not just job satisfaction; personal circumstance also plays a role." That being said, one of the best routes to enhancing employees' satisfaction with their work is to consistently challenge them—an area in which many health care organizations fall short, Butler says. "There is a certain level of retention windfall you get from challenging people, from preventing them from getting bored," he notes. In health care, he observes, "that dynamic is not as strong as it is in other industries"—there is a strong propensity toward pigeonholing employees in a single role or department for years on end. This, Butler says, amounts to ineffective management, particularly in an era of cataclysmic changes to the industry. "The high performers in an organization will be the ones who, over time, will want challenges, who will welcome new assignments and out-of-the-box thinking," he says. "With all of the reengineering of health care delivery that is going on and will continue for the next decade at least, there are ample opportunities to redeploy, recast people into new roles and reshape their skillsets." The strongest factor influencing employee retention, however, is the effectiveness of an organization's leadership. "Statistics tell us that by far the biggest reason people leave an organization is due to their manager," Butler says. "So our philosophy is that we want great leaders." Leaders can—and should—be assessed and developed in a manner that is comparable to the talent review applied to lower-level staff, Butler says; they should be evaluated by both their peers and their employees, and should be expected to meet annual benchmarks as both individuals and managers. "We want to do leadership development that increases the propensity leaders have to hit their goals with their teams," Butler says. "If we can cultivate leaders who are more consistently hitting their goals with more vitality—if we can create a scenario wherein an organization has more and more leaders people love to work for and recommend to their colleagues—that is probably the single greatest driver of retention, especially retention of people you want to keep."