Turnover at Lockheed Martin: a Study in How to Retain Team Members

Frequent turnover causes the Lockheed Martin Test and Readiness Group to re-train a third of its work force every year. To better understand why employees leave, I plan to conduct an action research project to gather data on employee job satisfaction, a widely-held indicator of turnover intent. Data gathering methods will include questionnaires, interviews, and secondary data. A collaborative team will analyze the data and recommend an appropriate change intervention to ameliorate the turnover issue. By gaining a full understanding of the causes for employee turnover, the group can learn how to retain its talent to improve effectiveness and enhance its ability to achieve mission success. 3 Comprehensive Paper for Dianna L. Julian Turnover at Lockheed Martin: A Study in How to Retain Team Members In Denver, Colorado, the Lockheed Martin Test and Readiness Group loses an average of two employees per year. In a nominal group of six employees, this turnover rate equates to losing and re-training a third of the work force every year. As the team lead struggling with acquiring and retraining new individuals, I want to better understand why employees leave. To do this, I plan to conduct a research project internal to the Denver groups to gather data on employee job satisfaction, a widely-held indicator of turnover intent. This research project will entail using secondary data, questionnaires, and interviews with the previous and current Test and Readiness employees, as well as with the current employees of the two other groups in Denver. A collaborative team will analyze the data and recommend an appropriate change intervention. Lockheed Martin Corporation The founding fathers of Lockheed Martin, Glenn L. Martin and the Loughead brothers, Allen and Malcolm, have been in business since 1912 and 1913, respectively. Since then, the two companies (Glenn L. Martin Company & the Alco Hydro-Aeroplane Company) have evolved through numerous acquisitions or mergers with other technology giants, such as Sperry, Radio Corporation of America (RCA), Goodyear Aerospace, General Electric, Ford Aerospace, General Dynamics, International Business Machine (IBM) Federal Systems, Loral and Unisys. The current Lockheed Martin Corporation was formed by merging Lockheed Corporation with Martin Marietta Corporation in March 1995 (Lockheed Martin Corporate website, 2004). Currently, Lockheed Martin employs 125,000 people worldwide, providing products and services for the research, design, development, manufacture and integration of advanced technology systems. Within the U.S., the company uses 939 facilities in 457 cities within 45 of the 50 states. Lockheed Martin also has business locations in 56 nations and territories worldwide. Lockheed Martin is organized into five business areas; Aeronautics, Electronic Systems, Space Systems, Information Technology Services, and Integrated Systems and Solutions, with numerous children companies within each line of business (Lockheed Martin Corporate website). 4 Comprehensive Paper for Dianna L. Julian Integrated Systems and Solutions. Lockheed Martin Corporation recently re­ aligned the Integrated Systems and Solutions (IS&S) line of business by combining its two children companies, Management and Data Systems and Mission Systems, into one entity. IS&S provides systems integration, systems engineering, software development and program management support for vital national systems. The company employs 12,000 individuals in Pennsylvania, Arizona, California, Colorado, and the Washington, DC metropolitan area (Lockheed Martin Press Release, 2003). In the Denver, Colorado facility, IS&S provides Systems Integration, Test, and Evaluation services for a complex communication system. Three groups perform the functions assigned to the Denver-based program. One group tests the system to ensure it is ready to be initialized. Another group is responsible for initializing the system to a fully operational state. The third group assesses how well the operational system is running. My group, the Test and Readiness Group, plans and executes system-level tests to assess the system’s readiness to be initialized. Test and Readiness Group. The Test and Readiness Group is composed of six employees. As a test event lead, a team member is responsible for writing test planning documentation, coordinating support between event participants, conducting the event, and providing post-event final reports to document the results of the test. The group is responsible for verifying system requirements and ensuring the system is built to the appropriate specifications. Requirements verification ensures the system is built correctly. In addition to requirements verification, team members validate the system operates as intended and can be run by the operators. Validation of system operability ensures the right system was built. High Turnover of Test and Readiness Employees History of the problem. Over the past 4 years, I have observed the turnover of eight employees from the Test and Readiness Group. During the development of this action research proposal, another employee submitted his resignation effective within 30 days; so the turnover issue continues to plague my team. According to Weisberg and Kirschenbaum (1991), the impact 5 Comprehensive Paper for Dianna L. Julian of frequent employee turnover is measured in the costs associated with the loss of the company’s investment in human capital, training and recruitment. The 1999 Emerging Workforce Study estimates the cost of turnover for the typical worker is $50,000 (Reingold & McNatt, 1999). Within the Lockheed Martin Test and Readiness Group, employee turnover costs must also include the costs associated with acquiring a security clearance for the new employee. In some instances, a new hire has to wait as long as six months for a security clearance to be fully processed. In a nominal group of six employees, the average loss of two employees per year creates a significant drain of knowledge with the Test and Readiness Group. Since it can take a new team member anywhere from six months to a full year to truly understand the complexity of the system the team is chartered to test, new employees require nearly continuous training to become familiar with the system and the processes required to fully plan and execute a system test. Subsequently, the remaining team members devote much of their time and effort toward educating new employees. Other negative consequences of frequent employee turnover include loss of continuity on projects and overloaded employees attempting to compensate for the loss until a replacement can be found and trained (Roseman, 1981). As a large corporation, Lockheed Martin does not move swiftly in hiring new employees. A strict procedure must be followed to hire new people. The bureaucracy of the company can delay hiring by weeks or even months. In the interim, remaining employees are forced to compensate for the loss of their team member. Additionally, team dynamics change when existing members leave and new members join the group. For the surviving team members, this can be disruptive to their productivity as they must learn how to accommodate and communicate effectively with a new team member. Finally, employees who are leaving may share their job complaints with other team members, which may adversely affect the attitude and morale of the remaining employees (Roseman, 1981). According to Lambert, Hogan, and Barton (2001), job satisfaction has the biggest direct effect on turnover intent as dissatisfied employees are more likely to quit than their satisfied 6 Comprehensive Paper for Dianna L. Julian counterparts. Once one individual leaves, the remaining employees may also question their reasons for staying and turnover may become epidemic among the employees (Roseman). Problem statement. The Lockheed Martin Test and Readiness Group is experiencing higher turnover compared to the other Denver-based groups. Turnover within this group causes low morale in remaining employees which decreases the group’s overall effectiveness. The purpose of this action research is to determine why the Lockheed Martin Test and Readiness Group is losing employees at a higher rate than the other Denver teams and to determine an appropriate intervention to ameliorate the situation. Factors influencing employee turnover, such as overall job satisfaction with tasking, work group structure, work environment, and group dynamics, will be examined to determine their effects on employee turnover within the Test and Readiness Group. Literature Review Numerous studies have attempted to quantify the reasons why employees leave their jobs. The underlying assumption in determining why employees leave is that once the reasons for leaving are known and understood, managers can mitigate the negative effects of employee turnover by ameliorating the reasons driving the turnover. According to Mowday, Porter, and Steers (1982), research on the reasons behind employee turnover began in the mid-1950s. These early studies found some evidence supporting a relationship between employee dissatisfaction and turnover. In 1971, Letkowitz (as cited in Mowday et al.), in a review of the literature on employee turnover, determined several influences on turnover, including the employee’s initial job expectations, job satisfaction, the physical work environment, financial compensation, the intrinsic aspects of the job, and the dynamics of the work-group. Flowers and Hughes (1973) correlated the reasons employees stayed with their companies and their personal values related to work ethics. Flowers and Hughes determined the reason employees stay is “inertia. ” The factors that affect employee inertia include level of job satisfaction and the degree of comfort the employee feels in the company. External factors that 7 Comprehensive Paper for Dianna L. Julian may influence inertia include perceived job opportunities a