Store$24($A$)$: Managing Employee Retention It was late Friday morning in early May $2001$ when President and CEO of Store ${24}^1$ Bob Gordon $($MBA $\text{'}62)$ met with CFO Paul Doucette and COO Tom Hart. The group gathered in preparation for the upcoming Monday morning executive committee meeting. The Friday agenda focussed solely on discussing strategies for increasing store level employees retention. Gordon started:

We will be considering a number of options for increasing store level employee retention

ranging from increasing wages and bonuses to training enhancements to career development

programs. I think it would be useful to start the meeting with an overview of the relationship

between employee tenure and store$-$level performance. Do we have any research showing the

impact of manager and crew tenure on store level operating performance?

Hart recalled that he had recently done a quick analysis to examine differences in employee tenure

between the most profitable and least profitable stores $($Exhibit $1).$ He explained that his analysis

showed that manager and crew tenure in the top ten most profitable stores was almost four times the

level of manager and crew tenure in the least profitable stores. Intrigued by this analysis, Doucette

remarked:

We have been collecting data on store manager and crew tenure for years, and we have

always set very specific goals for increasing manager and crew tenure. For example, our most

recent store manager bonus plan provides a quarterly bonus of $3\%$ of the manager's salary for

increasing average crew tenure by $1\mathrm{.}38$ months during the quarter. It would be great if we could

use this data to get some estimate of the actual financial impact of a $1\mathrm{.}38-$month increase in crew

tenure.

Doucette recalled that Sarah Jenkins, the intern hired to assist in the development of a new

employee$-$attraction and $-$retention strategy for the tight New England labor market, mentioned that

she had received some training in data analysis as part of her MBA curriculum. Doucette thought that

Jenkins would be just the right person to help with this sort of analysis and suggested that they all meet

with her after lunch.