Appendix A. Conceptual Framework for the Selection of Best Practices

There are three central dimensions of the best practices selection framework that will require attention:

(1)    What process should be used to identify best practices in retention and knowledge transfer?

(2)    What information needs to be collected once a best practice is identified, in order to describe and document its outcomes? and;

(3)    How will the information be organized, analyzed, and reported on?

1) Process of identifying best practices

In defining a process for identifying best practices, two key questions were considered:

1. What exactly constitutes a retention/knowledge transfer best practice? In other words, is there a sound process that can be designed that would allow an observer to pass a judgment on the admissibility of a particular initiative or workplace for the purpose of the CPSC project?

2. In the event that a ‘system’ or criteria for selecting best practices could be defined, what steps would be required in order to arrive at possible best practice identification? What sources of expertise would need to be tapped into in order to accomplish that?

A. What to look for?

i) Employee Retention

A review of the literature indicates a wide and diverse range of potential retention strategies. On the basis of the secondary sources consulted, retention practices can be grouped under the following categories: [1]

1.   Compensation & Benefits levels

2.   Compensation & Benefits systems (eg. pay for performance; skill-based pay, etc.)

3.   Recognition and Rewards

4.   Training, Professional Development, Career Planning

5.   Orientation & Integration

6.   Healthy Workplace or Well-being Programs

7.   Job Design & Work Teams

8.   Employee Participation & Communication

9.   Manager Training & Accountability

10. Flexible Work Time

11. Diversity Management

1. Work-life Balance

2. Performance Management & Feedback

3. Others

The diversity of interventions captured in the above list appears to confirm a growing consensus that while total compensation levels are an important factor influencing retention (Lawler, 1990) they are not necessarily the only option for maximizing HR outcomes, nor are they always sufficient — in themselves — for ensuring retention and worker satisfaction. Gunderson (2002), for example, notes that non-wage forms of compensation can yield positive organizational outcomes, while Anderson (1994) uncovers very strong correlations between employee retention and productivity in high commitment HR systems.[2] These conclusions are supported as well by Leckie and Betcherman’s report on a survey of 700 Canadian establishments which found that firms with participation-based (rather than compensation-based) HR management systems are more likely to experience lower quit rates.

There is, in addition, little evidence to suggest that the selective use of these tools as stand-alone policies generates a significant positive impact on retention, and the prescriptive side of the literature on retention and effective HR practices clearly recommends approaches to HR planning that integrate a number of these tools within a broader strategic plan. The approach of integrating a wide range of HR practices under one retention strategy is perhaps best summarized by Ware (2001), who argues that “successful employee retention requires companies to take a multifactored [sic] approach that includes effective organizational systems (i.e. compensation and benefits, etc.), managers’ behavior with employees, and managers’ accountability for their retention or attrition rates.” Attention to the presence of an overall strategy for retention (or to an overall HR strategy that might include retention among its objectives) is clearly an important consideration.

In addition, broader organizational commitments are cited as essential to ‘high performance’ HR management. Strong leadership, a clear articulation of organizational values, and the ongoing measurement of the impact of particular interventions are broader strategic elements of an establishment’s overall management that may be essential to the effective implementation of retention strategies including practices selected from the list above (MIT, 1997; Gunderson, 2002).

In light of the above, the CLBC research team will cast the net widely in terms of what might constitute a retention best practice. The important practical question is what criteria will be used to select firms with retention best practices. CLBC contends that best practices will be identified using one or more of the following criteria:

1. Firms with low turnover or high retention (compared to industry or occupation benchmarks), or a significant positive trend in those indicators over a relatively short period of time. Indeed, an organization that has relatively high turnover rates but that has significantly improved on this situation in a relatively short period of time should be included.

In instances where quantitative measures of retention/turnover are either unavailable or in doubt, subjective indicators of performance will be used, based on the firm’s self-reported answers to the following questions:

• How does the firm rate its retention of workers since the implementation of its HR strategy, plan or program?

• How good is the firm’s retention of workers as compared to direct and comparable competitors from within the sector, and other manufacturers in the firm’s region (local labour market)?

• Has the firm conducted employee satisfaction surveys that have indicated improvements in employee attitudes or organizational commitment since the implementation of its HR strategy, plan or program?

2. Firms that have an explicit retention strategy, central to its overall business strategy and human resources planning.  This selection criterion will look for the presence of written policies and programs specifically directed at employee retention, demonstrations that the organization’s strategic direction is linked to employee retention, and evidence of commitment to retention programs on the part of senior management.

3. In organizations that lack an explicit retention or HR management strategy, the presence of other organizational and human resource practices that are known to contribute to retention (incentive pay systems, alternative work practices, etc.) The absence of an explicitly articulated retention strategy does not necessarily signify the absence of an explicitly articulated HR management strategy that may be effective in achieving good retention, among other organizational goals.

Best practice firms are unlikely to be selected on the basis of only one criterion. For example, a firm may well exhibit low retention, but this outcome might be accidental or related to favorable conditions or circumstances that are beyond management control. Likewise, an organization may well have a retention strategy in place, but this strategy may not lead to improved retention because (1) the strategy is ill-conceived or poorly implemented, (2) the strategy is too new for a reasonable measurement period to have elapsed, or (3) forces beyond the establishment’s control are strongly driving turnover.

Recognizing the many methodological issues raised above, it is clear that a certain degree of flexibility will be required in the application of the three selection criteria described above so as not to set a standard that screens out too many potentially important cases. Nevertheless, we may define a retention best practice as follows:

An establishment that has an explicit employee retention strategy in place and that exhibits, according to both subjective and objective indicators, relatively low turnover or high job tenure rates compared to an industry or occupation standard, or a marked improvement in these indicators over a relatively short period of time.

Establishments conforming to this definition would be considered as ideal cases. Recognizing, however, that it may be difficult to find such cases, and recognizing as well that a number of methodological issues can complicate even those that appear to be ideal, the selection criteria can be progressively broadened by admitting less decisive cases. Examples of these might include:

• The presence of only subjective indicators of good retention;

• The presence of an explicit HR management strategy or other practices known to affect retention, but not an explicit retention strategy;

• The presence of objective and/or subjective retention indicators, but uncertainties about their correlation with implemented practices;

ii) Knowledge transfer

As a first step in defining what constitutes a knowledge transfer best practice, it is essential to clearly define what is meant exactly by knowledge transfer. In the context of this project, it is preferable to adopt a narrow definition, one that centres around the exchange of knowledge among and between employees[3] with the purpose of ensuring that an organization’s collective memory, skills set or body of knowledge is enhanced, and not diminished with employee attrition.

Knowledge transfer strategies could thus conceivably be defined, for the purpose of this project, as

the concerted actions, programs, systems, or initiatives designed to retain, share or transfer information, skills and knowledge among employees within an organization, or between separate entities of a multi-location organization.

If the available literature is any indication, it can be argued that there is not a large body of research describing specific knowledge transfer practices, as defined here or linking knowledge transfer strategies or programs with positive organizational performance or outcomes. In light of this, the typology of initiatives to promote and support effective knowledge transfer that is outlined in CLBC’s proposal provides a very good starting point for delineating possible best practices:

1. Approaches designed to support the sharing of knowledge, skills, and information:

   • Clearly articulated business strategy valuing the creation, sharing and retention of knowledge

   • Formally articulated organizational positions on openness, communication.

   • Recognition of knowledge-sharing practices or role models

   • Mentoring, coaching and peer training

   • Communities of practices and knowledge networks integrated into the work flow, including on-site workshops, etc.

   • Use of technology (e.g., database, Groupware, internet/intranet, e-learning)

   • Job rotation and cross-training

2. Approaches designed to retain knowledge and expertise:

• Activities to identify key expertise and knowledge to be captured and retained, and those who possess them.

• Activities and methods for inter-generational sharing knowledge and skills, namely phased-in retirement, post-retirement programs, etc.

• Sharing best practices from other businesses

• Sharing lessons learned

• Documentation of knowledge assets.

3. Succession planning approaches:

•  Early identification of potential successors

• Focused learning and development assignments for successors

• Job shadowing

On the basis of this, and for the purpose of this project, a knowledge transfer best practice can be ascribed to an organization that has put in place one or more of the above-mentioned approaches. Preference should be given also to those organizations that have been able to demonstrate positive organizational outcomes/performance or, in the absence of such demonstration, have put in place a system for measuring such outcome or performance.

This definition is attractive because it does not place an unrealistic burden of proof on the research team to demonstrate quantifiable impacts of knowledge transfer approaches and initiatives. Given the lack of a solid conceptual framework – or empirical evidence – of the causal links between knowledge transfer activity and organizational performance, it may well be more difficult to objectively identify knowledge transfer best practices. In this context, expert opinions and perceptual information from key stakeholders will take on added significance.

iii) Additional Identification and Selection Criteria

Interviews with key CPSC informants uncovered a wealth of information about the diversity of companies that are represented in the Canadian plastics sector. Plastics companies differ in a number of key characteristics that may influence, to varying degrees, the type of best practices information that would be relevant to CPSC’s target audience. Five distinguishing traits are particularly noteworthy:

i.      Industry segment. The plastics sector is made up of different types of companies—resin suppliers, machinery and mould makers, processors of different types (captive, custom and proprietary), etc. The mix of skills requirements, the degree of automation, the types of occupations represented in any given firm can all vary depending on what type of producer is in question.

ii.    Market  segment. CLBC clearly heard from a number of respondents that domestic and global competitive pressures can vary depending on the market or product segment in which companies operate. Firms that produce highly specialized or ‘niche’ products may be relatively more insulated from competitive pressures that might sharply drive down prices and, thus, costs. On the other hand, producers in the commodity segments (e.g., plastic bags, wire coatings, etc.) face strong competitive pressures that often oblige them to control production costs aggressively. In the latter case, non-financial retention or incentives may be particularly relevant in helping them to avoid unwanted turnover.

iii.  Technology. Whether or not they work in specialized or commodity segments, there are significant differences in the extent to which plastics establishments have introduced automation and new technology into their processes. These may influence the type of skills required of employees and the types of training, development and R&D investments the firm must make. In turn, these conditions may stimulate different knowledge transfer and retention needs.

E.g., Rapidly modernizing firms may be particularly interested in knowledge transfer best practices if they are making substantial investments in training, or they may be more likely to identify the more highly skilled segment of their workforce as the primary target of retention initiatives.

iv.  Geography. Differences in location may signal important differences in the supply, demand and skills profile of local labour markets. Producers located in areas with large concentrations of manufacturing (e.g., GTA) may, on the one hand, find a large pool of labour from which to draw, but may also find it more difficult to keep them from jumping to other competitors or other industries. Producers in rural areas or in other regions of the country may operate within small and relatively isolated labour markets. One informant noted that plastics producers in Atlantic Canada encounter less problems in finding workers for short-term contracts given the proportionally larger seasonal labour force. Thus, local labour markets and economic conditions may have a significant impact on the forces driving turnover.

v.     Size of workforce. In its original RFP, CPSC identifies SMEs as an important target audience for the best practices project, and indeed, research conducted to date suggests that size of establishment signals clear differences in the types of retention and knowledge transfer strategies that may be relevant, as well as the capacity to implement these. It is possible, for example, that SMEs without fully staffed HR departments may not have in place highly developed retention strategies; they may however, adopt a number of workplace practices that are engender good retention.

It is worth noting that differences in these traits do not necessarily reflect inherent differences in performance. It is clear, however, that these traits do reflect marked differences in the way that establishments operate within the plastics sector. While by no means conclusive, research conducted to date suggests that the types of best practice strategies sought may be disproportionately concentrated in very large, high-tech or highly specialized firms. Is the experience of these establishments sufficient for the needs of the current project? and, does it address the distinctive capacities, market context,  and information needs of all of CPSC’s audiences?

In an effort to ensure that the best practices information resulting from this project is reflective and responsive to the diversity of the plastics industry, we therefore propose an additional principle for selecting best practices. To the greatest extent possible, the project team will endeavour to select best practices—once these have met the criteria specific to retention and knowledge transfer—in such a way that the resulting compendium is reflective of differences among firms with respect to the five additional identifying criteria: industry segment, market segment, technology, geography and size of establishment.

B. How to select best practices?

Two main research tasks were initially identified as contributing to the identification of Canadian manufacturing firms with best practices in the areas of employee retention and knowledge transfer: (1) a literature review; and (2) consultations with key stakeholders (25-30 persons). \

1. Literature Review

The literature review has provided vital information to the project about the diversity and range of organizational practices relevant to employee retention and knowledge transfer. The literature review has been less successful, however, in identifying specific Canadian manufacturing firms, particularly within the Plastics sector, that have been cited as having exemplary or innovative practices in the areas of retention and knowledge transfer.  

Nevertheless, CLBC has been able to compile a number of sources of the “best companies to work for” variety, e.g., R.O.B./Hewitt’s 50 Best Companies to Work for in Canada. These lists contain sufficient detail to compile an initial selection of manufacturing companies that will be checked further against recommendations and feedback received through the stakeholder consultations.

Consultations with key manufacturing and plastics stakeholders will be carried out using a structured interview guide containing mostly open-ended questions. 

Consultations will be conducted with a number of individuals or representatives of organizations, such as:

• Sector Councils that represent segments of the manufacturing industry

• Industry and Business associations.

• Industrial Labour Unions.

• Representatives of various HR professional bodies

• Publishers of industry-specific periodicals (e.g., Canadian Plastics, Plastics in Canada)

• Management, HR or Business Consultants with an expertise in either HR management or the Canadian plastics and manufacturing industries.

• Academic or professional researchers.

• Owners or representatives of businesses with key insight into the issues to be addressed (if relevant and necessary)

While the consultations will continue to look for useful information on specific retention/turnover/knowledge transfer issues on a sector- or occupation-specific basis, they will at this point concentrate heavily on the identification of potential best practices establishments within the plastics and manufacturing sectors. A total of 15–20 brief interviews will be conducted with persons drawn from the above-mentioned groups, and the project researchers will carry out follow–ups as necessary.

3. CPSC Member Interviews

In addition to yielding important information about the plastics sector and the key challenges it currently faces, interviews with CPSC board members conducted early in the project, proved to be a very useful source of initial information on potential best practices companies within the Canadian plastics sector. Some 30 companies have been identified through these interviews, and will serve as the basis for some initial investigations into best practices in the plastics sector, and will be verified as much as possible against information obtained through the stakeholder consultations.

Stakeholder consultations, investigation of the ‘best companies to work for’ establishments, and initial leads provided by CPSC members will provide sufficient material to draw up a definitive list of best practice establishments. If necessary, a further selection from this list will be made if it is found to contain too many potential candidates. In the case of retention best practices, the project researchers will trim the list using the criteria described in the previous section of this report. Three additional criteria will be used, if necessary, in the case of both retention and knowledge transfer best practices candidates:

1. Give more weight to cases that have a longer track record;

2. Give more weight to cases that have a wide spectrum of specific activities associated with the strategy or approach; and

3. Give more weight to cases where systematic attempts have been made to measure the outcomes of the strategy or approach, or some of its individual components.

2) What information to collect

Once a list of potential best practices is assembled, more investigation will be directed at documenting them. Interviews with firm managers/owners, HR managers, and union representatives will be utilized for this purpose. Information on rationale, characteristics of the best practice, and outcomes will be collected, as per the following:

A. Rationale, impetus:

i) the context within which the best practice takes place: industry context, nature of the work/ production process, firm level characteristics (size, sector), HR and other management practices, overall business strategy, etc.).

ii) the rationale and motivation behind the initiatives, programs or strategies designed to increase retention, reduce turnover, and/or improve knowledge transfer.

B. Characteristics of the best practice:

i) formal/informal character of the best practice

ii) the type of strategy, program or initiative put in place (financial, organizational, training-related, etc.)

iii) the scope and magnitude of the strategy, program or initiative (occupational groups involved, multi-site, etc.), costs and resource levels

C. Outcomes:
 

i) Firm-level outcomes and performance indicators (turnover rate, productivity, profitability, health and safety record, etc.)

ii) Employee-level outcomes (job tenure, skills and knowledge development, job satisfaction, etc.)

iii) Occupational-level outcomes (same as ii) but with an occupation-specific focus)