Discretionary effort can predict the future when it comes to staff turnover. Use it as a leading indicator!
Have you ever had a phenomenal staff member who achieves significantly more than what is required? Let's call her Sally.
Have you ever had Sally suddenly stop putting all that extra effort? She's still achieving every performance metric, but not over indexing like she used to. What happened?
Discretionary effort is defined as the amount of performance that exceeds the minimum required. Note: 'minimum required' includes all commissions and incentive structures, and all peer pressure and unspoken expectations that may exist. By definition, this extra effort and performance must be completely discretionary and not coerced in any way by peers, management or culture. Otherwise it is not discretionary.
If human beings were rational, they would never apply any discretionary effort and yet they do all the time.
The Race for Staff Engagement
13% of all employees are 'highly engaged' but double that - 26% are 'actively disengaged'.
There is broad agreement in academic literature that engagement is some kind of higher level alignment where staff have an emotional rather than a transactional relationship with a workplace. It is also the realm of discretionary effort because if you are emotionally attached to a workplace, you will behave in ways that are not always rational, such as performing beyond any expectation for reward.
The race for staff engagement is very real in most corporations with a strong desire to elicit the discretionary effort that comes with high engagement.
The Psychological Contract
When Sally signed up to be part of our organisation, she also signed a psychological contract - implicit and unspoken promises that each party holds in their minds.
When a formal contract is broken - say a condition or pay item - we hear about it. It's obvious. But when a psychological contract is broken, what happens?
We usually don't hear about it because it is awkward to fight over unwritten promises. Instead, we see a silent retreat of discretionary effort. After a period of time we might even witness Sally participating less in the organisational culture, or even falling below the required standard in a few minor but expanding areas. We then label her as 'disengaged'.
Predicting the Future
Long before this point, Sally was still overachieving benchmarks by 5% and we labelled her as 'engaged' but we should have noticed that her performance decreased from 170% to 105%.
She cannot be disciplined, of course, but alarm bells should be ringing and we must find out why.
Gartner research verified this in 2019 when they found that:
'Declining discretionary effort is correlated with declining intent to stay at a company.'
Wouldn't you rather turn around Sally's engagement from 105% to higher numbers again than from 80% to 100% through disciplinary action?
But you will never get the chance if you don't use discretionary effort as a leading indicator because a 6 month fall from 170% - 105% is precipitous but will not show up on most performance metrics.
Respect the Discretionary Nature of Discretionary Effort
Never raise performance standards to chase discretionary effort. Regular over-achievement to secure rewards, commissions, and commendations does indicate that your targets are too low but discretionary effort is an irrational measure above all of those measures and represents an intact psychological contract and the highest levels of staff engagement.
Measure it. Reward it. But always respect it and treasure it by keeping it discretionary.