Category: Employee Retention

The Significance of Employee Retention to Organizations: Theoretical Analysis

Theories related to the study

The chapter starts with introduction of employee retention concept. Utilizing Maslow Hierarchy of Needs Theory by Abraham H. Maslow (1954) and Social exchange theory, employee retention can be explained; these concepts are encapsulated in this chapter two. Both theories act as foundation to support the findings in investigating the relationship of the implementation of HRM practices with organisational commitment act as mediating role that impact on employees’ retention among the engineering companies in vicinity of Kota Kinabalu, Sabah.

Abraham Maslow’s Hierarchy of Needs Theory

Mohamed, Ngui, & Mulili (2017) in their investigation expressed that Maslow projected that there are 5 human needs, these needs are physiological, safety, social, self-esteem and self-actualization and these needs are ranked, according to the order in which they influence human behaviour, in hierarchical fashion. Kamau & Omondi (2015) clarified Maslow needs hierarchy with examples that physical needs refer as food, clothing, shelter; safety needs refer as physical protection; social needs that refer as developing close associations with others; self-esteem needs are regarding as the prestige given by others; and the highest self-actualization is the focus on self-fulfilment and accomplishment through personal growth.

Charity (2015) pointed out that Maslow views mankind as wanting beings who are persistently endeavoring to discover approaches to satisfy their needs which are not static and once a need has been satisfied, it can no longer serve as a motivator of behaviour. The fundamental of the theory is that beginning with lower basic physical needs in the hierarchy have to be fulfilled first and then progressing up to higher needs for self-change and employment headway. When all these essential needs have been accomplished, one would now be able to get to self-realization which hence causes them feel loyal to the company (Mohamed et al, 2017).

Charity (2015) featured that with the higher order needs of esteem and self-actualization, Maslow stresses the significance of non-monetary incentives in motivating the people. Maslow’s hypothesis inferred that non-monetary incentives can be best on employees who are meeting their essential needs, and satisfaction of basic needs is not alone enough to motivate employees. According to Charity (2015) non-monetary incentives have an important place in satisfying other needs of employees which cannot be met by pay. The examples of social non-monetary incentives such as a verbal recognition by supervisors or letter of thankfulness to the representatives add to their self-esteem,while social activities such as after-work parties, company picnics, sports activities and so on fulfill the belongingness needs of employees (Charity, 2015).

Maslow theory demonstrates that for employees to work efficiently that they need to achieve those needs in order to give their top and best performance and hence the employer also needs to motivate the employees by giving them reasonable incentives, pays, rewards, recognition and also subjecting them to training and development to enhance their loyalty or rather retention to the organisation ( Mohamed et al, 2017). As per Atalya & Genga (2019), employees are probably to move in search of better positions with relatively higher compensation advantage, better working environment, and a favourable work-life balance. The theory of hierarchy of needs applied to the employee retention study in that it provides motivating factors that when employees achieve their needs, they are able to remain as employees in an organisation.

Thus, it can be anticipated that the Maslow’s Hierarchy of Needs clarifies the motivation components which ultimately lead to employees’ willingness to remain loyal to the company. It is essential for organisation to identify the needs of their employees and committed to satisfy them and to retain them as human capital assets. This research will utilize Maslow hierarchy of needs on examining and predicting the possible influence of HRM practices towards employee retention and organisational commitment among the engineering companies in the region of Kota Kinabalu.

Social Exchange Theory (SET)

Coyle & Conway (2005) stated that Social Exchange Theory was developed originally by Thibaut and Kelley in 1959, as it has been utilized extensively as theoretical base of employee retention and organisational commitment research to comprehend the employer and employee relationship (as cited by Bibi, Pangil, Johari & Ahmad, 2017, p. 381). Blau (1964) defined Social exchange as voluntary actions of individuals that are motivated by the returns they are expected to bring and typically do in fact bring from others (as cited in Chinomona, & Dhurup, 2015). Harden,Boakye & Ryan (2018) mentioned that social exchange theory posits that as individuals engage in a series of interactions, such as when employers are supportive of their employees, a feeling of obligation emerges from the exchange. Blau (1964) postulated that the interactions between parties are usually seen as mutually dependent and contingent on the actions made by the other persons (Almaaitah et al, 1964). Osman et al.,(2015) stated that social exchange theory positively influences employee performance, commitment and retention where it explains that the stronger the relationship between employee and employer, the higher effect it has on employee’s attitude and behavior which in return generates better performance, motivation and retention (as cited in Shah, S. B., M.Khalil & Hashim, 2019).

Blau (1964) assessed that social exchange theory stressed on all human connections are shaped by the use of subjective cost-benefit, which is rooted in three vital areas: economics, sociology and psychology (as cited in Almaaitah, Harada & Sakdan, 2017). Harden et al., (2018) opined that the social outcomes of such exchanges are couched in an individual’s social and esteem needs such as a greater number of connections or a higher status within one’s social network; whereas, the economic outcomes resulting from a social exchange address an individual’s financial needs, such as promotion or pay raise. The psychology outcome as Harden et al., (2018) pointed out that employees will reciprocate organisation supportive role by wanting to perform in an effective manner and with a positive attitude as evidenced by their organisational commitment.

Almaaitah et al. (2017) explained that social exchange as a process of negotiated exchanges between parties in which both parties involved in the exchange take responsibility for one another and strongly depend on each other. Chinomona, & Dhurup(2015) asserted that when one party to the exchange does something for the other, or provides benefits for the other, there is an expectation of some form of valued, future return that is both non-specific and not tied to an explicit market value.

According to Chinomona & Dhurup (2015) when implemented the social exchange theory to organisational settings, leaders, coworkers and even the organisation may offer employees a variety of benefits that induce feelings of indebtedness and this is due to the fact that social exchanges builds up feelings of personal obligation, gratitude and trust among partners, all of which lay a foundation of social solidarity and micro social order even without binding contracts. Bibi et al (2017) reiterated that SET has been demonstrated that good acts and performances need to be reciprocated and the SET is based totally on the perception that a person who feels that he/she gets benefits from someone will sense obligated to repay or compensate through positive behaviours, attitudes, efforts and devotion.

It is consequently essential that companies/organisations utilize different HRM practices (i.e., training and development, compensation and performance appraisal in this study) shall establish distinct exchange relationships with employees. Bibi et al (2017) is convinced that social exchange theory is relevant such that employees are more willing to perform better when they are supported and valued by organization and hence establish positive relationship towards employee retention and organisational commitment in long term.

Employee Retention

Definition of Employee Retention

Adegoka (2015) defined employee retention is a deliberate and systematic effort by employers to create and foster an environment that motivates current employees to maintain an employment relationship with the employers by having policies and practices in place that address their diverse needs and interests (as cited in Okolie & Umemezia, 2017). Fahim (2018) therefore evaluated that retention can be viewed as a logical inverse of turnover, as it indicates the behavior to continue/stay rather than to quit/leave the organization. Al-sharafi, Hassan & Alam (2018) stressed that retention as an employee’s decision to stay or continue working in their present organizations as a result of efforts made by organizations to encourage their staying. According to Al-sharafi et al (2018) added views that retention as the efforts organizations made to keep its desirable employees and thereby reach company objectives. Similarly, Kumar and Mathimaran (2017) stressed that retention is a systematic effort made by organizations to build a supportive and positive environment that encourages current employees to stay at their present organizations (as cited in Al-sharafi, 2018). Zineldin (2000) defined that employee retention is the all-round module of an organization’s human resource strategies of this it includes the recruitment of the right people with the right skills that is demanded by the organization and continues with practices which promotes employee engagement and commitment to the organization (as cited in Rono & Dr Kiptum, 2017, p.110). Kadiresan, Kamil, Mazlan, Musah & Selamat (2016) further defined employee retention as the practices used by organisations to prevent employees from leaving an organisation, and retention is the capability to retain those employees that the management want to keep, for longer than their competitors.

The Significance of Employee Retention to Organisations

Alias, Zailan, Jahya, Othman & Sahiq (2019) points out that a decreasing rate of employee retention rate is becoming a major problem for every organization nowadays (p.62). Ngethe, Iravo & Namusonge (2012) concede that employees are taken into consideration as the most valuable asset of all organizations as they provide competitive advantage to an organization; and employee retention is crucial or an organization (as cited in Bibi, Ahmad & Majid, 2018, p.42). Kadiresan et al. (2016) suggested that organisation need to be in a position to retain the bright employees who are highly experienced and difficult to replace; and at the same time was not easily available in the employment market. According to Ozolina-Ozola (2014), and Anvari, JianFu, and Chermahini (2014), employee retention is a trademark to the organization on their ability to initiate effective retention strategies with the intention to retain their excellent performer among the organisations’ employees (as cited in Alias et al., 2019, p.62).

Aleem & Bowra (2019) asserted that retention has many benefits for the organization, i.e., to increase productivity, maintain high-quality services and products in the organization and leads toward profitability by holding the customer for long term. Kyndt et al. (2009) claimed that, employees’ retention could assist an organization to become economically stable and competitive because employees’ retention involves retention of knowledge and skills (as cited in Gan & Yusof, 2019). Rakhra (2018) asserted that the performance of the organisation depends on the productivity of the employee as a consequence the HR team ought to do their best endeavour to keep the present employees satisfied with their job so that they do not consider leaving because no organisation can perform if the top talent quits.

The Impact of Employee Retention to Organisations

Rakhra (2018) stated that employee retention boosts the organisation’s productivity. Johennesse & Chou (2017) remarked that if employers do not carefully manage the retention of their staff, organizations may be challenged by understaffing, as well as ineffective and inefficient employees, for this reason at once impacting at the competitiveness, success and sustainability of these organizations. Similarly, Azeez (2017) added that low level of employee retention in an organisation has a direct impact on the smooth running, productivity, performance and long-term sustainability of the organisation. According to Rakhra (2018) that hiring and training the new employees takes time thus if the experienced and efficient employees are retained the productivity of the company can be improved.

Renard & Snelgar (2016) found out that when employees exit their organisations, turnover as opposed to retention occurs. According to Noe, Hollenbeck, Gerhart & Wright (2012) that ‘Turnover’ can be stated as a permanent form of physical job withdrawal due to some form of job dissatisfaction and If employees are dissatisfied at work and cannot change their job conditions, then leaving the position may be their only means of solving the problem (as cited in Renard & Snelgar, 2016). Alias, Othman, Koe, Ridzuan, & Krishnan (2017) highlight the worse scenario is when talented employees voluntarily resigned their current position from the organization (as cited in Alias et al., 2019, p.62).

Azeez (2017) mentioned that once competent employees leave the organisation, there are movements of the customers towards those employees who are loyal to those employees, this result to the organisation loss of both employees and the customers. It is also no surprise that in a few occasions that subordinates who are loyal to the leaving employee may leave the organisation as well (Azeez, 2017). Gray (2012) suggest the view that if an employee leaves the organization voluntarily due to better offer or job dissatisfaction will have an effect on other employees to make the same direction, thus setting off a phenomenon of turnover and focusing on initiatives to retain them from becoming a contagious in an organization always a major concern by organizational leaders (as cited in Alias et al., 2019, p.62).

Bibi, Ahmad &Majid (2018) indicate that switching an employee with a new one rises operational costs in many forms which include high cost of recruitment, replacement, selection, management time. Similarly,

Hosain (2016) remarks that the HR department of the organisation should concern that other hidden or invisible costs are result of incoming employees through new job analysis, co-workers relationship with the departing employee, time taken for the co-workers to develop a good working relationship with the new employee and the other expenses occurring while the position is being filled. Mathimaran and Kumar (2017) mentioned that losing a middle manager in most organizations’ costs up to five times of his salary and loss of social capital. Rono & Dr Kiptum (2017) also highlighted in previous study on the negative effect of failure in retaining the employees that results in productivieness loss in the course of the assimilation period, loss of business opportunity poor and weaken customer relationship.

Azeez (2017) stressed that employee retention ought to be the primary focus of the organization to take care of a strategic distance from the unpredictability and high cost of selecting an expert and qualified workforce to the organisation. Renard & Snelgar (2016) expressed that human resource manager must not solely to recruit and hire employees but also to retain individuals who possess the necessary talents and skills that required for organisation to attain strategic objectives. Hence, it’s crucial for the management of the organisations to critically evaluate and develop employee retention as a management tool to retain the potential employees within the organisation

Employee Retention, Training and Development: Literature Review

Abstract

Employee retention is one of the most important factors that an organization needs to consider when developing its strategies. In today’s ever evolving world, retaining employees has become a challenge in itself for employers, since employees tend to change jobs very easily. Employers must therefore focus on a lot of different aspects like training and development, compensation packages, motivation and morale, job satisfaction, work environment etc. for the retention of their workers. For the purpose of our research, we will look into employee retention specifically from two angles: training and development, and compensation.

The findings of this secondary research conclude that there is a positive and significant relationship between training and development, and compensation with respect to retaining employees. We will further explore each aspect in detail in the following review.

Employee retention:

Employee retention is the general strategy or capacity of a company to hold its best employees and as a result have a lower turnover. An organization can accomplish this by embracing different employee retention programs employee retention should always be a priority for any Human Resource department in any company. It is also one of the most important aspects for a company aiming to gain a competitive advantage over its rivals.

An employee retention program includes steps beginning from distinguishing the significant benefactors (employee) in the organization and designing strategies to include them with the organization to ensure that they don’t leave. The accomplishment of these projects is estimated by basic metrics like retention ratio, and turnover.

According to Samuel and Chipunza (2009) the primary motivation behind retention is to keep the loss of able employees from the association as this could have unwanted impact on profitability and administration conveyance. Notwithstanding, retention of high performing workers has turned out to be all the more challenging for managers as this classification of representatives regularly switch jobs as they are provided with more attractive offers. (Samuel & Chipunza, September, 2009 )

Every Organization spends a ton on drawing in the best talent. These Employees contribute a great deal towards the accomplishment of the organization. These accomplishments are reflected in the bottom line of the organization. The Employees who remain with the organization for longer time contribute productively and become fundamental piece of the organization and the position. But if these workers leave the organization and join the competitor, this would mean double the loss for the main organization. First they will be straightforwardly affected by the worker not being accessible and also the representative is presently adding to the challenge. Also, the person who may replace may not be able to come at par that early.

Employee retention is one of the serious issues confronting organizations facing the competitive conditions. The huge business challenge is to adjust your objectives to the growing demand for a fair company atmosphere that meets fundamental human needs and where work is synonymous with individual satisfaction and satisfaction. (Teixeira & França, 2013)

Screening and retaining great people is the challenging task faced by the companies’ Human resource department these days. (Sadik, 2015)

Employee retention is influenced by myriad factors, such as the leadership style of management, individual employees’ intrinsic motivation and engagement, burnout, collective morale of staff, the influence of the family, salary, and the desirability of the job’s location. Employees who view their organization or association as morally stable are likewise bound to be focused on remaining there. Transformative authority and servant leadership are both getting expanding research consideration worldwide as methods for advancing employee engagement, commitment, and retention. (Froiland, 2015)

Aguenza and Som (2012) caution that Employees stay in organizations when they get Motivational preferences, for example, rewards. Be that as it may, compensation can’t be viewed as the main retention factor. There are different components that might be progressively powerful, for example benefit programs, flexible schedules, equity options, training, and the internal culture itself, which is likely the most applicable factor

Human capital is one of the most important resources of the modern business world. Unlike other assets and resources it is very difficult to arrange a productive and talented Human resource. That is why firms are shifting ever increasing focus on to retaining their employees. The HR department uses different methods for different firms. Our main emphasis is on how motivation, compensation and training and development of employees affects employee retention.

Employee retention & training and development:

There are several important factors that contribute to retain employees within the organization. Employers use different techniques for the retention of employees. One of the most common of which is training and development of the employee. This affects an employee’s commitment to an organization and increases their satisfaction and productivity.

Training is the planned intervention designed to enhance individual job performance. Employees are trained using techniques like on the job training, vocational training and general and specific training. Training is divided into further two segments. General training and specific training. General training consists of internship opportunities for the employees whereas specific training is geared towards increasing productivity at work station level. Learning and change are necessary for human development and training is the changes that are gained by learning. Training is the practical education which aid in the development of skills and knowledge of employees. Development of employees reduces the turnover rate and these opportunities encourage employees to enhance and deal with difficulties on the job more effectively.

Organizations are focused on maintaining the turnover of their employees within acceptable limits as loss of employee results not only in the loss of Human capital but also results in the loss of the resources spent on training and development of those employees along with the resources that will have to be spent to train the new employee.

Training and development of employees plays a significant role in inculcating a sense of responsibility to benefit the organization, as a result employees repay the organization with their commitment and loyalty by staying for a longer period of time (Liao, 2011). Training and development help the organization to gain a competitive edge when they make their employees equipped with skills, knowledge and experience. The performance of a better workforce also reflects in the overall performance of the organization. Training and Development increases the level of job satisfaction in employees which motivates the employees to remain associated with the organization, thus decreasing the turnover rate and increasing the retention rate. The correlation of job satisfaction and employee retention is supported by the notion of Social Exchange Theory (Blau, 1964).The Social Exchange Theory suggest that if someone has benefited from the other person he/she feels obliged to repay that person in any possible way; it can be through positive behavior, devotion, commitment and efforts.

It has been observed that organizations who fail to develop the competencies of their employees by not investing in training and development face substantial challenges in order to retain low turnover rate. In addition to this organizations who regularly invest in their training and development programs incur less turnover cost in terms of time, money and efforts of hiring and training a new employee. Although the counter argument suggests that training and development make the employees more attractive and appealing for other organizations and the value of the employees in the global market also increases, hence they might opt for a better opportunity by leaving the organization (Haines, 2010). This causes great losses to organization’s resources that is its trained and skilled workforce. It is every difficult for a company to hold back any of its employees even if there’s a very stringent contract. They believe that training employees is a two-edge sword which can either result in losing the employee to a competitor (Wood, 2009; Dalziel 2010) or gaining their loyalty for a longer time (Birdthistle and Fleming, 2007; Talhiya, 2012). Therefore, in order comprehend the correlation of training and development with employee retention we consider other factors which may have influence on employees such as compensation, work environment, organization culture etc.

Larger businesses invest considerably more in their staff training and development than Small and Medium Enterprises (SMEs). The training and development practices are inferior in nature in the context of SMEs which result in low involvement of the employees to the organization. This sometimes cause employees to move to another competitor enterprise consequently the fear of potential employees being taken away by the competitor can be a barrier for these small organizations to invest in training and development. Furthermore, when and organization offers learning opportunities and career paths which can help the employees develop and grow personally and professionally there’s an enhanced employee retention.

Generally employees expect a greater level of responsibility after training therefore they must be adequately compensated. The organization initiates training to improve skills of employees at a lower skill level and in turn it affects the hourly wages of the workers positively. The increased capabilities of the trained employee create an impact on the growth of the organization as a whole.

Employee retention & compensation:

Compensation packages play a huge part in influencing employee’s willingness to continue the job in the same place. Compensation also greatly affects the employee’s willingness to work for the company, because it helps keep the employees attracted to that particular firm and not look for alternative jobs elsewhere. A remuneration package that suit’s the employee’s demands and expectations plays a huge role in not just the general attitude of the employee towards the firm but rewards are also see to provide a social status and a position of power in the organization. (Terera and Ngirande 2014). Allen, Shore and Griffeth (2003) stated that the way that employers tend to differentiate themselves to retain more employees than their competitor is by through better compensation strategies. Hence, employers need to make policies in a way that they are able to attract just the right kind of employee they need, by offering them just the right kind of compensation he/she desires.

Compensation is defined by an American association as “cash and non-cash remuneration provided by the employer for services rendered” (ACA, p. 9). This system of input-output (compensation-retention) therefore leads towards the success of the organization as long as this mutual behavior is being supported. Employees these days are always in search of making more money which means that they switch from one job to another for higher compensation offers. This ultimately leads to the fact that effective compensation packages are an essential of retaining key employees to help the business survive in the competitive world.

According to Wentland and Nazir et al, one of the most difficult task is to choose the best fit amongst the compensation packages and strategies to retain employees for the real challenges in multinational world. 54.9% employees agree that they have been willing and motivated to put an effort in the performance and production level because of the reward they receive from an organization. These rewards not only retain the employees for their thirst of money but also strengthens and maintains their belongingness which leads towards their greater responsibility for the organization that eventually leads towards their retention for a long period of time.

However, it is important to make sure that the valued employees are paid above the industry average to help them retain in the organization. This is important to clear the misconception in employee’s minds that if they threaten the company to leave, they’ll get higher pay and that for instance if an employee is already receiving a lot being at the top of his/her salary scale for the same duties performed; will affect organization wide differentials.

Attractive compensation packages include rewarding for good work done that can motivate employees to continue in the same organization for long which influences job satisfaction as well. Benefits from overtime and fringe benefits and paid holidays are an integral part of effective compensation packages. It has also been found that employees tend to be unhappy in an organization because they do not get the authority to demand the changes in their existing compensation packages.

Compensation also helps to motivate employees to stay committed to that particular firm when the organization adopts this strategy- the longer an employee stays, the higher his chances of being promoted and hence achieving a higher salary package. It is also seen by the employee as a communication tool; i.e. how much the organization values the individual is seen in how much it is willing to pay him. The recognition of employees boosts their morale, and they feel significant for the organization and tend to stay.

Compensation is something that is also seen as shaping the inner culture of the organization. The more easily an organization increases compensation of its employees, it is seen as more accommodating and less demanding. This particularly affects the company’s image and the overall willingness of people to apply to that firm or to continue working in it. Research has proven that those employers with efficient wage systems have better recruitment and retention of its employees. This is driven from the natural human instinct to always strive for more money, more so in this day and age, and hence employees are seen to quickly shift organizations in the case of a better opportunity elsewhere.

When employees are given high compensations from organizations that are best suited according to their work, they are more satisfied and feel obligated to repay through positive attitudes, loyalty and devotion (Mossholder, Settoon & Henagan, 2005). This opens a new dimension of the compensation study. Compensation makes employees feel good about the organization which not only increases their retention, but results in better performance by the employee. The employee after being satisfied with his or her compensation, may feel obligated and loyal to the organization, and therefore give better performance overall, resulting in profits for the organization.

Compensation is highly linked with promotion. When an employee is promoted, the compensation is also increased. A study conducted by Johanim and Pangil revealed that there was a positive and significant relationship between promotional opportunities and employee retention, even more so than compensation and retention. Hence, companies need to focus largely on efficient systems that keep each employee’s performance record to accurately decide who is eligible for a promotion.

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Influence of Employee Retention Strategies on the Performance of Spotless Group

· Background and Problem

This research is about the company called Spotless Group. The organisation is an Australian listed company that works all over Australia and New Zealand and it provides integrated facility services in all different kind of businesses in the market such as Security, Health Care, Education and other government-related sectors (Spotless, 2019). It is a large-scale organisation and employees around 42,000 employees all over Australia and New Zealand. This company was chosen because the author of the research is currently employed by the Spotless Group, and is working as a Project Operations Support Officer for the Department of Education contract. This means that the author is responsible for the communication between the public schools and the government maintenance-wise.

The problem that has been detected in the company entails the employee retention, or perhaps the lack of it. In this case the author is only looking at the own team, or the office where he is employed at. It is difficult to say how the employee retention is demonstrated in the broader sense of the company. The reason why the employee retention was chosen as the problem for this research is that the number of employees leaving the company is quite high, there is mismanagement, miscommunication, and no reward system or something related to motivating and treating the employees of the company.

· Ideas and Concepts

First of all, it is important to decide what kind of research is executed. There are two types of research, basic and applied research. Basic research can be described as a more general research to expand the field of knowledge in the existing database. On the other hand, applied research is a research that entails a particular problem or question that needs to be addressed. In this case, the author is choosing for an applied research. This is because the problem in the company has been addressed already, and therefore it is important to find a solution for the decreasing employee retention numbers.

There are a lot of different theories and strategies written already about employee retention. These show the importance of employee retention, and the influence it can have on a company. According to Philips and O’ Connell (2003), managing retention and keeping the turnover rate below the objective is one of the most difficult issues in today’s business world.

· Hypothesis

In this research, the importance of employee retention is to be studied. The author will firstly investigate the different theories and strategies written in the existing database, to be able to understand what employee retention is about and how to achieve a good balance in employee retention.

Next to this, different big companies will be compared to see how their employee retention procedures are influencing the turnover rate and thus, the employees working for the company. Lastly, theories and strategies will be reflected on the chosen organisation to see where they are performing well, and where they are lacking.

· Practicality of the Research

In this research the author believes that the research is very well possible to execute, to define the problem, and also to find solutions for the problem. When looking at different types of research, this research is classified as a causal research. This is defined as a research where cause and effect are examined and to see how this influences the variables. When translating this into the research, it can be said that the author is going to investigate what the procedure of employee retention in the company is showing in connection to the actual employee retention numbers.

· Value of the Research

The author believes that this research can assist the management of the Spotless Group to increase the employee retention. Moreover, the Human Resource department is going to be assisted by this research, due to an improved employee retention procedure. Furthermore, this research can be valuable to the employees of the Spotless Group, because due to changes in employee retention procedures it can improve the work situation for employees. Lastly, the findings of this research can illuminate the stakeholders of the Spotless Group about the influence of employee retention on any organisation.

· Strategy in combination with the Research

There are a lot of different strategies available about employee retention. In this particular research in connection to the company, the author is choosing for a combination of quantitative and qualitative research strategies. This means that the research will conduct surveys, interviews in order to gather data but also general research based on the literature review and linked to the industry where the company is working in.

· Global vs. Local Research

When looking at this particular topic, the research will be mainly local. However, when looking at the investigation part of the research, e.g. the literature review, this can be global as well. The actual research itself will be local, since the Spotless Group is only working in Australia and New Zealand, and the author is looking at the teams and department that he is working for and the office where he is employed at. Solutions will be based on the office where the author is working, this could be projected to the Spotless Group on a national level, but at this stage of the research the author is focusing on the local branch.

· Innovation Research vs. Evolution Research

Understanding these types of researches it can be explained in a quite easy way. The word Innovation says it already; it is about new strategies and thinking about going forward, creating new theories. In this research, the author is going to focus on Innovation research, because with the current technology and the knowledge of the company, the author believes that new policies and procedures can be created for the Spotless Group regarding employee retention.

· Is the research worth investing?

According to the author the research is worth investing because employee retention is a big challenge these days in any organisation. When creating the right policies and procedures in regards to employee retention, it could decrease the employee turnover, increase the motivation and morale in a company, and decrease costs as well. These costs can be seen as the costs when a person resigns, the time and money it costs to find hire and train a new person, and with a proper employee retention policy it could even be possible to find new staff within a team.

· Benefits of the Research

The benefits of the research are the possible outcome of the research. It can have a positive effect on the job satisfaction with current employees. Moreover, it can strengthen the relationship between management and other employees. This will eventually increase the organisational performance and also the communication in the organisation. Furthermore, the outcome of the research can benefit the management of the Spotless Group for future decisions in connection to employee retention and training and development. Lastly, the outcome of the research can be positive financially to a company. It can increase the efficiency in a team, morale and motivation, but also it can decrease the turnover rate and costs of hiring and training new staff.

References:-

1. (2019). Retrieved 18 August 2019, from https://www.spotless.com/clients/
2. Phillips, J., & Connell, A. (2003). Managing employee retention (1st ed., p. 11). Abingdon, Oxon: Elsevier.

Analytical Essay on Factors Affecting on Employee Retention among the Sewing Machine Operators

Introduction

The focus of this chapter is to discuss the investigation analysis findings of the research study to find out whether the research objectives have been achieved and to emphasis the contribution to the knowledge. Further, the researcher suggested directions for future research possibilities which have been noticed during the period of research by the author’s personal reflection as well by interpreting analyzed data.

Revisiting the Objectives

Training and development: The second variable analyzed was Training and Development. Training is described as the systematic acquisition and development of the knowledge, skills and attitudes required by employees to effectively perform an assigned job or task to reinforce performance in the organization they attached. If the training provided by organization is relevant and if it is efficaciously and correctly designed and delivered, the training provided has to impart new and updated knowledge and competencies as well as meet the personnel attitude of employee and organizational requirements. While the outcomes of training is pondered by enhancements in relevant knowledge and the acquire of applicable skills, worker job overall performance must also improve assumed that the competencies found out in training switch to the job.

Welfare benefits: The second variable analyzed was welfare benefits. Employee welfare is characterized as endeavors to make life worth living for employees attaché to the organization with their starting point either in some statute shaped by the state or in some neighborhood custom or in aggregate understanding or in the business’ own drive. Somehow, there are two essential welfare territories which are of advantage to people and those are. physical and enthusiastic. The view that welfare includes not just the prior worry with specialist’s physical working conditions yet in addition the human relations angle to accomplish job satisfaction.

Disciplinary Procedure: The next variable is Disciplinary Procedures. Discipline as the move made by administration or management against an individual or gatherings of employees who have neglected to take after the built up standards and systems set by the management inside the association. Worker teaches is deliberate conduct while restraining activity is punishment for misconduct or infringement of the authoritative tenets. The business word reference characterizes disciplinary system as composed, well ordered process which a firm confers it to follow for each situation where a representative must be cautioned, criticized, or rejected. Inability to take after a reasonable, straightforward and uniform disciplinary methodology may bring about lawful punishments for harms as well as revocation of the company’s activity.

Performance appraisal: The fourth variable analyzed to identify the reasons for employee turnover is performance appraisal. Performance appraisal is a process of analyzing and comparing employees overall performance in his or her obligation to facilitate the selection of career improvement of the particular employee. The evaluation evaluates the employee’s contribution to the organization through evaluation of his or her inner characteristics, work performance and ability to pursue higher positions in the company by using the key performance indicator tools. Most of the companies set the remuneration packages according to the performance appraisal work out, while employees might know about their level of execution and understand their regions of shortcomings from their bosses.

Career growth: The fifth variable analyzed was career growth. A progression of formal exercises planned and oversaw by the organization employee attached to impact the career development of at least one employee. Whilst career management and career self-management, are not mutually exclusive, successful career management programs require individuals knowing what they will achieve, clarification of organizational plans and accompanying individual opportunities to dispel anxiety and frustration in employees. This will aid positive attitudes towards career progress and the organization. Organizations providing career relevant information and assistance will narrow an employee’s career focus and bind them more closely to the company.

Contextualizing the Research Findings

This research attempts to identify the factors affecting on employee retention among the sewing machine operators of the Courtaulds Apparels. The finding of the research provides the support that there is an impact by the variable taken to analysis the factors affecting employee retention. As the first step of analysis, researcher has designed a simple test to verify that there is a significant impact on performance of organizations through innovation. The result of the analysis was positive as average distribution was above 0.4 marks average of all mean shows 0.6, which means a significant impact on employee retention through the factors demonstrated. Therefore, researcher was able to make the conclusion that swing machine operators in garments industry sector in Sri Lanka are highly expecting the welfare benefits and training and development to retain in the same organization than other factors.

The next step was to carry out the analysis to identify the relationship between welfare benefits and employee expectation and to determine the most significant factors impacting employee retention. From the finding of statistical analysis welfare benefits and training and developments variables were significantly related to employee retention as it has demonstrated a positive impact on employee retention. Disciplinary procedures and carrier growth factor have demonstrated a less impact on employee retention in garment factory sector compared to welfare benefits and training and developments.

Contribution to the Knowledge

This study has produced an outline in order to understand of the relationship between employee expectation and its impact of employee turnover. Through a detailed literature review this study has provided a wide understanding on what is employee retention, the importance and relationship of employee and their expectation in training and development, welfare benefits and carrier growth in garment factory sector to retain the experience swing machine operators. Therefore, an insight is presented on how employee expectations impact retention and such expectations are effective in retaining the employees of an organization.

Further this study has proven welfare benefits factor has an impact on employee retention of an organization. Therefore, welfare benefits factor demonstrated a significant impact on employee retention in apparel industry sector of Sri Lanka. Performance appraisal and disciplinary procedures factor have demonstrated a less impact on employee retention in garment factory sector compared to welfare benefits factor. Carrier growth has not proven impact on any of the employee retention factor, therefore a weak correlation between carrier development factor and employee retention has been revealed. Based on the findings this study has provided guidance to the organization’s management to develop an welfare benefit supportive culture with appropriate strategies that will support to enhance the employee retention percentage of organization.

Suggestion for the Future Research

Firstly this research was carried out based on five factor dimensions. This can be further expanded and explored by adding other factors related to supervisor or work environments. Secondly correlation between employee expectation and employee retention can be expanded using other measurements factors in further studies. This has limited to garment factory in Sri Lanka. Further research can be done covering entire apparel industry including other position in all grades. Therefore this study would entail further exploration on the subject matter and field in order to get a more clear understanding on the factors of employee retention in Sri Lankan garment Industry.

Personal Reflection

The journey of the author in this research reflects his experience in the garment field and employee retention with remarkable memories. Concerning whole process of the dissertation, it should be noted that as an overall it was very intriguing and exciting. Generally as a Human Resource staff in middle management of a garment factory, author concerned on learning about employee retention and difficulties in retaining the employees as specific subjects for MBA. Hence it is an ongoing challenge in today’s competitive world of apparel industry to acquire new swing machine operators while retaining existing ones boosting towards enhancing production by experienced staff and sustain in market with providing quality garment items to market. The literature reviewed in the research aligned with today’s garment field trends on the scientific field the independent study as it had more tasks to be fulfilled and demanded by the author on his critiques and academic view of point.

Recommendations

As discussed in introduction of this study, Low level of Employee retention has arisen as the biggest issue in Sri Lankan apparel industry. It’s identified that the industry has been suffering from low level of employee retention since year 2000. In the periods of 2000 to 2012, the average monthly retentions rate was 93% where it’s having monthly turnover 7% and it has been getting worse year on year. This situation is a problem to survive the organization. It is a considerable barrier to the succession of the apparel industry. Different initiative can be taken in order improve detriments of retaining employees. This could be due to lack of research done on the subject matter.

Meanwhile, demographic background of the samples show that 83% of samples are represents female swing machine operators and 62% of operators are age of below 30. However marital statuses of 58% employees are single. The education status of all employees is less than ordinary level and advance level. It’s clearly show that, the machine operators are from lower middle class families and they re with less middle class families. However there are 78% of employees says that, the reason for their intention to resign the job is for spend time with children. The above mention factors clearly stated that most swing machine operators are females, they are below 30 years of age and most of them are single. On other hand the main reason behind the high employee turnover of swing machine operators are to take care of their babies after they deliver the baby.

Recommendations to Improve Welfare Benefits

From the findings of the study, the most important factor that addressing by the employees is welfare benefits. Welfare benefits express the expectation and requirements of the employees who are attached to organization. The management of apparel industry mainly concern on welfare benefits of employees to retain the experience swing machine operates with them. Female employees are employed by apparel industry as swing machine operators. If the management provide a day care centre for the mothers who employed by them will reduce the employee turnover. If the management take care the children of employees future by open a minor accounts to children with an attractive initial deposit and made small amount of monthly contribution jointly with the mother on salary day up to a considerable period will retain the employees.

A medical scheme for the employee should be proposed by the management and it should include the benefits for their family members with contribution from employee too will retain the employees. The job environment in the garment factories also a significant factor to retain the employees with them. To create a better job environment, the management can propose competition in showing the talents of employees. Through the competition, the factory has the possibility to reduce the employee retention and the management had the ability to adopt innovative ideas from their employees.

To reduce the job stress, the management can followed the talent show in-between the working hours. Through this the employees has the ability to refresh their mind and the management has the chance to increase the effectiveness and efficiency in production through highly motivated employees.

Initial results indicate that the training led to an average increase by four in the number of garment per worker per eight-hour shift across the factories. This was coupled with the use of productivity bonuses, meaning that workers will have benefited from this productivity rise through their take home pay — an indicator of worker welfare.

Influence of Organizational Culture, Fringe Benefits and Salary on Employee Retention

1. Introduction

1.1 Background

While introducing the topic which is our research project, we are a group of four MBA (HR) students and decided to work on Employee Retention. The topic of our base article is ‘Effects of Job Organizational culture, Benefits, Salary on job satisfaction ultimately affecting Employee Retention’ which is basically a study of deciding whether Organizational Culture, fringe benefits and salary has any positive or negative relation with job satisfaction and ultimately on employee retention or not. Our work is actually a continuation of the same objective i.e. to see the relatedness of Employee Retention with (1) Co-Worker Support in the workplace (2) Employee Engagement and (3) Anti-bigotry leadership. For the sake of research purpose we have selected small firms, outlets & enterprises in the vicinity of Islamabad & Rawalpindi only.

Three variables (Independent Variables) used in the study are co-worker support i.e. extent to which employees at a workplace are happily cooperating in completion of each other’s tasks. Here we have tried to bring the theme of ‘team work’ synchronization which encourages each employee to not only work well on own part but also take care of their colleagues which increases overall efficiency of workforce which in turn affects employee workplace satisfaction and enhances employee retention. Comfort zone is a state of personal condition where an individual mentally refuses to jump over next phase of life and accept upcoming challenges in order to get better future. This particular state might be an obstacle for this specific variable. Second variable is employee engagement. Employee inclusion refers to a situation where subordinates are welcomed to suggest and speak their opinion about a specific problem or situation. A bit more formal shape of employee inclusion is employee engagement that partially covers the aspects of employee inclusion as well. Employee engagement defines the level of employee activeness towards workplace as a whole. The more a firm is willing to actively engage an employee the more are the chances of feeling attribution and affiliation towards work and workplace creating a sense of self-importance and therefore more probable are the retention chances. Third and last variable is most complicated among all due to its newness. It’s related with a broader topic ‘Management Style’ and specifically linked with ‘Laissez-faire’ type of management and even more specifically with ‘fair’ type of management.

Question of the moment is what if an employee is sure about his / her management is one hundred percent fair in their decisions, every major decision is made only on merit and supervisors have no personal issues with any of the subordinates; will it affect the level of willingness for employees to stay in the same workplace for longer period of time? Logically seems quite positive but will see in the results section weather our assumptions are valid or not. The focus we have in today’s business environment is of ‘sustainable Advantage’ rather than competitive advantage because, competitive advantages are easy to replicate and potential to rebound is not enough. Sustainable advantages on the other hand are harder to copy i.e. especially when it is in the form of valuable manpower in an organizations.

1.2 Problem Identification

Employee Retention is always a major issue in every kind of organizational setup. It is an issue that is related with the personal gratitude of every individual in the workplace and it might be different for different employees at the same organization because factors that are responsible for an employee to stay motivated to continue the job and the factors which keeps an employee demotivated in staying on the same job are not parallel (Herzberg’s two factor theory). There is a conclusive debate over tradeoff between cost of hiring new employee and costs incurred on retaining existing workers and researchers have always favored the option to incur costs on retaining instead of hiring. So the problem of the day is to identify some universal factors that could play an important role in retaining those employees which truly matters for the growth of an organization. In our research, these factors are judged as independent variables that have any direct impact on employee retention in the workplace. The theme is; just as an employee work harder to keep his job, on what grounds should an organization work hard to keep their loyal employees? Efforts that are made in the wrong direction are always fruitless regardless of the quality or quantity of the efforts but if same size of hard work is done in the right direction, results are bigger and positive.

In a research done in Review of Public Administration and Management (2017), researchers have studied employee retention in relation with organizational culture and salary. Their results were obvious and conclusively a better organizational culture and good salary does help organizations to retain employees effectively. The gap identified is weather factors like co-worker support, employee inclusion and style of management or leadership also have any impact on employee retention.

As of current practices in the local industries the focus is only on good compensation and flexible routines to counter employees with social support to retain them but our focus in this study is to look at the factors that exist particularly within an organization such as the extent to which colleagues are helpful to each other, the extent to which senior organization cares about what the subordinates have to contribute theoretically and last thing does it matter to supervise in a fair way? What will be the rate of retention where employees are confident about fairness of corporate management? All these factors might have an important link with the main goal of our study i.e. employee retention. When we compare reasoning factors of employee retention between modern economies and least developed economies we would see the deciding elements of employee retention are not the same for both. For developed countries the focus is on work-life balance, future growth & personal development like factors but when we discuss developing nations like Pakistan the shift is different and thus we are encouraged to study three specific factors i.e. co-worker support, employee engagement & Anti-bigotry Management.

1.3 Problem Statement

‘’Since retaining valuable employees is a challenge for organizations in an environment where competition is high, number of organizations exist in the vicinity ; will it help organizations to retain employees by creating an organizational environment having high co-worker support, encouragement of subordinate suggestions & existence of a fair leadership’’

1.4 Research Questions

1. To what extent does co-worker support positively impact employee retention in an organization?
2. Does ‘Suggestions from employees’ influence employee retention?
3. Do ‘Fair’ Management style play a vital role in helping organizations to retain manpower?

1.5 Objectives of the Study

There are three main objectives of the study in our case i.e.

1. To explore whether co-worker support is a factor (variable) which increases the chances of workers to stay in the same workplace.
2. To determine whether senior management’s attitude of considering suggestions from low level employees in company’s destoning helps organizations to retain their employees.
3. To focus on a specific style of management (fair leadership) and to see if it also help organizations to retain their employees. Mainly, our purpose of the research is to formulate a valid framework to have in it the most effective and efficient determinants of employee retention so that firms can confidently put their eggs in the right basket e.g. investing on the right factor of retention.

1.6 Significance of the Study

How much is it important for an organizations to treat its employees as their ambassadors? Very much! According to Forbes. A study suggests that for a company its first customer is their employee, especially motivated, psychologically attached to the firm & developed individuals. Employees that are actively participating in achieving a firm’s financial goals are no less than a sustainable competitive advantage for the same firm. There exists a variety of strategies and techniques to retain employees. Some of these are old, least effective and some are new, still being explored and used by most of the firms. In order to be profitable all the time a firm shall always spend on potentially profitable ventures that is why there is a need to explore the factors and variables to base some new and relevant business strategies that help organizations to retain its employees in an effective and efficient way.

There existed a concept of ‘Maggi Scandal’ i.e. not actually a scandal but a concept where various small and medium compensations (Such as additional day off every year, additional salary increase every year or additional subscription deals every New Year) were introduced in order to keep the manpower motivated to stay in the firm and continue performing the job with complete peace of mind. However, since we are part of a diverse and dynamic workplace environment and we have to change and adapt all the time so we are in process of determining few workable determinants of employee retention in the local market i.e. vicinity of capital and Rawalpindi (Cities of Pakistan) where large number of small and medium organizations exists in food, retail & services sector. Since we are conducting our study scale i.e. locally and not globally so our testable determinants are quite simple and easily identifiable in such kind of market. Existence of workers in a firm leads to co-worker relations, existence of policies and problems in a firm leads to need for honest suggestions and it is further linked with loyal employees of the firm and lastly, presence of management / leadership in a firm points toward various management styles and a particular style of management while talking about that specific organization. Our intentions are to look at all these three factors and comment on their significance in respect with their impact on employee retention.

1.7 Scope of the Study

Our research is supposed to be carried out by a group of four (students). Covered target area will be vicinity of Capital and Rawalpindi and specifically food, retail and services sector. Cost estimation is done and it will be a self-sponsored project. Secondary data (collected through scaled questionnaire) will be used in generalization of results. Impact of three independent variables will be tested on employee retention and technically SPSS (Statistical Package for the Social Sciences) software is intended to be utilized after gathering required data from targeted respondents. Time duration of the project is 3.5 months i.e. estimated duration of our semester. Scope of the study is not confined to any specific events or incidents but purely on the personal experiences and opinions of the employees working in Food, retail & services sector in Rawalpindi, Islamabad.

2. Literature Review

2.1 Co-worker Support & Employee Engagement

When it comes to decide whether the concept of coworker support in the field of Human Resource in connection with employee retention is a new one or an older generosity, the coin favors optimism. The Workers which have support and remain more engaged by having good relationships and open communication with the supervisor, generally have less intentions to leave the organization (Greenhaus, 1987). Interesting linkage between the two is of coworker relations and peer supervisor relations. Does it affect how workers support each other considering the relations of workers and their supervisors? Supervisory support should positively be related to employee retention and it is negatively related to turnover intentions (Rhoades, 2001). Coworker support has much to do with retaining / turnover of workers regardless of the fact that how important or not these workers are for the firm. The employees who are not getting support from their supervisors generally leave the job / organization, and likewise mostly employees intend to leave the supervisor not the job (Ontario, 2004). Jealousy among workers is also important to understand in the process of defining elements of employee retention why? Jealousy is considered one of those factors that directly affect coworker support and thus ultimately impacting employee retention.

Furthermore, it has been encouraged by several researchers to comprehend envy as it appeared to be a hostile emotion that often prompts aggressive behaviors towards others (Smith, 2007). Envy has a powerful influence on behavior and can negatively affect the individual’s performance level, satisfaction level and in some cases, lead to more severe outcomes, in worst case, murder (Vecchio, 2007). Researchers have worked on ‘employee burnout’ that very much related to coworker love and employee containment. Emotional exhaustion is a core component of the burnout syndrome, which leads to depersonalization, and subsequently results in lack of personal accomplishment (Maslach, 1981). Comprehensively discussing coworker support in the past highlights some classical links & supportive variables such as employee’s social support, comprehending envy & coworker jealousy which have been defined & explained in detail by various researchers in the past. When we observe around our workplace, there are few invisible dynamics which affect coworker bonding psychologically such as increased intolerance, depreciation of social values & lack of psychological commitment towards work (contribution as a worker). In the context of the workplace, hope has been found to support and sustain the capacity of workers to be resilient, to overcome adversity, and to bounce back in ways that strengthens their effectiveness (Luthans, 2007). Last but not the least, what gender differences have to do with coworker relations in the workplace? Not much but researchers have tried to explain as much as possible. Various impacts on overall performance have been identified by observing different combinations of gender scheme in the workplace. Similarly, several studies point to the fact that women are more likely than men to approach and use social information to gain information about themselves (Roberts, 1991). It could be out of track but in our opinion it does relate, today’s overall co-worker relations are dull and dizzy as compared to the level they had in previous years. Co-worker relations in today’s working environment lack sincerity just as today’s lyrics lack poetry.

The present study which is the extension to a theory which was written by the researcher Abraham Maslow in his book (Maslow, 1943) “A Theory of human motivation.” All individual has put their struggle constantly to fulfill their requirements, as their necessities are everlasting (when any certain employee of any organization leaves, the other show up in his or her replacement), those need which are fulfilled can never encourage a person and those needs are planned out in an order of position. An individual worker is associated to a person who has experienced this cycle, has every one of their needs are beginning from physical to self-completion fulfilled, and find a satisfaction in life through the work that one does. (Goffman, 1956) In his book “The Presentation of self in Everyday Life” has utilized a term “Embracement.” Which is simply the asset and their energies into their jobs? How one is committed to their role is important.

Behavioral activities that’s mean connection/ absence of fairness between an individual and their jobs were demonstrative of embracement. This term job embracement was the same as worker commitment. (kalman, 1958) Researcher Herbert Kalman in his study interviewed with almost two hundred employees of different organization to understand their attitude and behaviors, his study suggested many differences in context of agreement and internalization. Through an investigate Dark American Understudies, in which he mentioned some of the factors which were related to motivation and job satisfaction. He had the ability to demonstrate that an individual can settle on their decision significantly and more openly among an internalization condition. This opportunity enabled them to express their feelings, to achieve a commitment of worker one need to accomplish the condition of internalization.(Herzberg, 1959) Met around two hundred architects and bookkeepers to understand the mentality of individuals towards work. At that point double factory hypothesis of inspirations, He found that there are a lot of cleanliness factor, the absence of which might be damage, however they do little commitment to give fulfillment and remain outward to the work. It is the natural for work reason or inspirations that are enter in satisfying individual with their activities. Worker commitment is all about supporting the cleanliness factors and playing totally in those inspirations. (Gatenby, 2009) Create commitment to be a two-way relationship. For the business it was making an extraordinary workplace and for the representative it is an idea that places flexibility, change and nonstop enhancement at the focal point of everything. The two should respond to make a commitment culture. (al, 2009) Commitment was tied in with making open doors for workers to interface with their partners, administrators and more extensive association. (al L. e., 2006) Offered significance to the representative voice, the capacity of the worker to have a contribution to the choices that are made in the associations. Ordinary meanings of commitment mention to involvement, passion, enthusiasm, excitement and energy. In addition, experts frequently characterize representative commitment as far as full of feeling duty, fulfillment and individual proof, along these lines baffling distinctive builds by ‘putting old wine in new containers’ (bakker, 2010) (al M. e., 2004) struggled that demonstrative commitment is identified with passionate meetings and success.

(wilson, 2004) Remarked that emotions interface us with our materials and provide classified effort on how we are getting success along, what we need and what we may do directly. Being in associations includes us in tension, grudge, upset, anger, weakness, energy and different feelings. (bakker, 2004) And opined that sketched in representatives are probably going to have a more prominent assembly to their suggestion and a lower tendency to stop. (al T. e., 2006) Found that, generally speaking, sketched in representatives are more unfavorable to leave their manager. (al h. e., 2009) Exposed workers more client centered when secure in. As they are encouraged to increase their optional effort to make business progress as opposed to simply close to home increases. Further connected with worker moreover decidedly impacts the biological system around. A few predictors similarly offer that empowered agents have a more raised amount of firm duty, as engaged workers will in general be exceedingly focused, self-persuaded and multipurpose (al A. e., 2004). Researcher view the profession and specific resources as critical essentials related with demonstrative commitment. (al b. e., 2008). According to (al m. e., 2008) there is an association between objective setting, good faith, and commitment and the effect on individual worker execution. Results demonstrate that associations that highlight formal, organized objective setting forms encourages larger amounts of worker commitment. More high amounts of worker commitment lead to expanded representative good faith. Solid working environment positive thoughtful thus encourages improved worker performance.

2.2 Anti-bigotry Leadership & Employee Retention

Anti-bigotry leadership is a rather new topic in research, not entirely new but closer to one of the management / leadership styles that are largely recognized till date i.e. when we use the word ‘style’, it actually indicates the behavior of the leader as to how he / she choose to behave in a given scenario. It is the way in which the leader influences the followers (Luthans, 1977). Behavioral style of leaders who generally provide the group complete sense of freedom, provide necessary materials, participate only to answer questions and avoided giving unnecessary feedback (Martin, 1994). Much needed arguments have been made about whether the Laissez-fair style of leadership is successful only when the subordinates are highly skilled, contained professionalism is at peak and required closer to zero supervision? Or it can be effective in rather different situations as well? Laissez fair leadership was only considered relevant while leading a team of highly skilled team (Zakeer, 2016). Leadership is in fact discussion of control i.e. final verdict of who is controlling? The system or the one trying to influence the system. Leadership is the act of making things happen rather than letting things happen (Goddy, 2014). On one hand, being ‘fair or anti-bigotry’ (laissez fair) leader, decision making process is very slow, leader has no confidence on his leadership ability & result could be in the shape of ‘buck passing’ (Goddy, Impact of Leadership Style on Organizational Performance, 2014). Laissez-Fair is uninvolved in the work of the unit. It’s difficult to defend this type of supervision unless the subordinates are experts and well-motivated specialists, such as scientists (Mondy, 1995).

The conceptual definition of Laissez was well given by Osborn as ‘Abdicates responsibilities and avoiding decisions’ (Hunt, 2010). Here when we try to imply the same on fairness of a manager (or supervisor), odds are that we end up saying laissez-faire type managers are fair and untouched-natured just because they are afraid of taking responsibilities, least confident in making decisions & thus prefer to play their role inactively rather than in a direct and instant mode. Companies today are interested in retaining valuable employees and good employees are increasingly becoming more difficult to find (Panoch, 2001). “As our community continues to experience significant growth in the hospitality industry, employee recruitment and retention has become a priority”(Czurak, 2011). Retention matters because high turnover creates high replacement costs and is clearly associated with low levels of customer satisfaction, customer loyalty, and lost revenues. Retention is particularly challenging today due to an aging work force and a growing imbalance in the supply and demand of qualified personnel (Padron, 2004).

Many of the companies that already spend big bucks to recruit and train talented employees are bracing for even stiffer competition as baby boomers start to retire amid a shortage of skilled labor (Rawe, 2006). Annual turnover rates as high as 50 percent remain the standard in the hospitality industry, and many hotel operations have chosen to simply accept this as a fact of doing business (Levine, 2005). It is certain that many will not be surprised by the fact that the hospitality industry has such a high rate of turnover because turnover culture is considered to be a major problem in the industry. It is a normative belief held by employees that turnover behavior is quite appropriate (Chikwe, 2009). A survey (Laff, 2006) revealed that 51 percent of respondents expected to make a job transition in five years or less. In this continually changing global economy, business needs to understand and utilize key concepts concerning employee retention. Without adapting to potential problems, organizations face debilitating outcomes, one of which is the cost of turnover (Panoch, 2001).

The hospitality industry has reported varying annual turnover rates ranging from 32 percent to 300 percent. The cost associated with high employee turnover, which has been well documented in hospitality publications, averages from $3,000 to $10,000 per hourly employee, to over $50,000 for managers. The most costly element of employee turnover, representing 60 percent, is that of lost productivity (Moncarz, 2008). According to Cornell University estimates, turnover in the hospitality industry averages more than 100 percent with the cost of turnover at about $5,000 per associate in lost productivity and wages (Davies, 2006). A 1993 study by the US Department of Labor on high performance work practices revealed that involving employees in the decision-making, goals and the direction of an organization through participation in teams will help produce job satisfaction and reduce turnover (Moncarz, 2008). Thus, the key to reducing turnover seems to be finding out what motivates employees to leave a job (Chikwe,2009). Customer and employee turnover both have a direct link to the bottom–line and profit (Agrusa & Lema, 2007). With the growing industry in the 1970’s, it had become important for organizations to redesign work to create quality jobs, primarily in order to increase employee motivation. At this time, employee response to the monotony of low-quality, unskilled, assembly-line work resulted in costly absenteeism and turnover (Wilson, Brown & Cregan, 2008).

Looking to the future means taking care of your employees, according to several panelists who spoke during the 70th semiannual Council of Hotel Restaurant Trainers. Whether it is implementing an employee training program or utilizing surveys to improve employee retention, hotel managers must find avenues that are creative and personal (Higley, 2005). Problem solving strategies in the hospitality industry are becoming critically important for organizational effectiveness (Agrusa & Lema, 2007). In a recent hospitality study, 91 percent of managers who participated said retaining their skilled, solid–performing employees is equally important as it was five years ago (Laff, 2006). Ultimately, the success of any business rests in the hands of its employees, from profitability and productivity to recruitment and retention (Honore, 2009).

We know three things about staff retention: “You just can’t find good help these days” (Milick, 2006). In looking at properties and organizations that have a high level of retention, there are two key areas targeted: start with the end in mind and they target front-line managers and supervisors (Davies, 2006). In organizations where employees receive proper training to assume greater responsibilities, their turnover rates are generally lower (Moncarz, 2008).

The Problem of High Staff Turnover in the Hospitality Industry

Hospitality industry is a service-based industry that relies heavily on servicing people who has leisure time and disposable income. Units from management team to servers that are involved play an important role during the whole service operation. Hospitality industry often demand employees with abilities such as effective problem-solving skill, great communication technique, strong commitment, and the ability to work as a team member in order to provide excellent services and unforgettable experiences to customers. In recent research conducted by British Institute of Innkeeping, it has shown that the level of employees’ turnover ratio within the hospitality industry is higher comparing to other businesses (Lashley, Conrad, 2001). High staff turnover ratio brings negative impacts and affects companies in various ways. In below, there are several causes and effects of high staff turnover ratio within the hospitality industry.

Company’s successful management is essential for having a thriving business. Great teams within the organization always have justly, reasonable, and supportive superiors to lead the team. Lack of a good leader often results in poor job performance, low productivity, loose team, and stressful working environment among workers. Supervisors favor in particular employee, decision, or action will often cause the feelings of unfairness among the coworkers. Superiors give out unreasonable requests or demands will stress out employees since the task is impossible to complete and even receive blame when the task is not done or the requirement is not met. Managers show zero support to their workers leads to low motivation and low confidence when conducting tasks and eventually leaving the job due to lack of sense of belongings.

Job dissatisfaction will also cause high employee turnover ratio. Dissatisfaction of job such as undesirable working condition and content, low remuneration, and inadequate job development and promotion chances often make employees to leave and seek for better offers and opportunities. Employee surrounded by terrible and unpleasant working environment leads to inefficiency and bad working attitude. Workers received salary that is not as balanced as its’ assigned job burden and responsibility will also cause employee resignation. Employers provide zero or less job development or promotion opportunities to their employees will cause turnover since there is no better outlook in the future. Instead of staying in a company without sufficient career guidance and prospect, they tend to seek for other employers that are willing to provide more resources and opportunities.

Higher employee turnover ratio in hospitality industry will often generate higher customer dissatisfaction rate and higher managerial costs. Customers dissatisfied with services that are provided are due to lack of well-experienced and well-trained staffs. Company personnel continuously changing often failed to provide services with perfection and consistency to the customers. On the other hand, the cost of refilling staff vacancy is also extremely expensive. According to the Cornell H.R.A Quarterly, cost of turnover rate of only one employee per year is between $88,400 and $130,000. Cost of turnover can be categorized as direct and indirect cost. Direct costs of staff turnover are such as replacement, recruitment, selection, training, management, and items. Indirect costs of staff turnover are such as low morale, low productivity, loss of reputation, and low commitment and goodwill (Hogan, John J., 1992).

In every business organization, low staff retention is a serious issue that needs to be solved and control in a reasonable rate. Especially in hospitality industry, staff consistently changing will affect business’s profit and reputation. In order to maintain valuable and loyal employees, companies must go through thorough selecting processes when hiring and provide reasonable salary with pleasant working environment and condition leading by rightful, supportive, and fair supervisors. Employee’s career development must be properly guide and assist by using any resources that are available or sufficiently provided by employers.

References

1. https://web-b-ebscohost-com.ezproxy.rgu.ac.uk/ehost/pdfviewer/pdfviewer?vid=1&sid=e206ea14-de49-4ec4-8c6a-968d7d8fe285%40sessionmgr102
2. https://librarysearch.rgu.ac.uk/discovery/fulldisplay?docid=gale_ofa186862368&context=PC&vid=44RGU_INST:VU1&lang=en&search_scope=MyInst_and_CI&adaptor=Primo%20Central&tab=Everything&query=any,contains,high%20staff%20turnover%20in%20hospitality%20industry&sortby=rank&offset=0
3. https://librarysearch.rgu.ac.uk/discovery/fulldisplay?docid=sciversesciencedirect_elsevier0010-8804(92)90052-7&context=PC&vid=44RGU_INST:VU1&lang=en&search_scope=MyInst_and_CI&adaptor=Primo%20Central&tab=Everything&query=any,contains,employee%20turnover%20in%20hospitality%20industry&sortby=rank&offset=0
4. https://ac-els-cdn-com.ezproxy.rgu.ac.uk/0010880492900527/1-s2.0-0010880492900527-main.pdf?_tid=6af51227-0a16-4ee2-aeed-afe7ac34a8cb&acdnat=1546689569_081ba9cd30bebd5ec9143d9067023afa

Importance of Employee Retention, and Employee Retention Techniques

Preface

Professional study is incomplete without having practical exposures in life. Theory provides the fundamental stone for the guidance of practice, but practice examines the element of truth lying in the theory. Therefore, a stand co-ordination between theory and practice is very essential to give a synergistic strength and let help the esteemed MBA program move towards perfection. The comprehensive knowledge of the theoretical aspects and the practical exposures has given me a lot of strength to complete my project.

I avail this stance in a very satisfactory manner and think it will be very beneficial for me in building my future. This project is in a part and I have given my best to arrange and report the findings in a good, lucid and systematic way.

Executive Summary

Employee retention Techniques is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. Employees today are different. They are not the ones who don’t have good opportunities in hand. As soon as they feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best employees. If they don’t, they would be left with no good employees. A good employer should know how to attract and retain its employees.

Most employees feel that they are worth more than they are actually paid. There is a natural disparity between what people think they should be paid and what organizations spend in compensation. When the difference becomes too great and another opportunity occurs, turnover can result. Pay is defined as the wages, salary, or compensation given to an employee in exchange for services the employee performs for the organization. Pay is more than ‘dollars and cents;’ it also acknowledges the worth and value of the human contribution. What people are paid has been shown to have a clear, reliable impact on turnover in numerous studies.

Employees comprise the most vital assets of the company. In a work place where employees are not able to use their full potential and not heard and valued, they are likely to leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment, the company is benefited with a stronger, reliable work-force harboring bright new ideas for its growth Blog Online and Earn Money.

Introduction Of The Study

Employee Retention

Employee retention means to retain the employee in the company. One of the biggest challenges companies are facing is the attraction and retention of top performers. The World Future Society predicted that the greatest test of durability for companies in the next five years would be the ability to get and keep good people. In some industries such as the TPA industry there is a phenomenon of merry-go-round employees where employees jump ship within the industry and companies are recycling employees.

Retaining key personnel is critical to long term success of an organization. A Retention Strategy has become essential if organization is to be productive over time and can become an important part of hiring strategy by attracting the best candidates who know of your track record for caring for employees. In fact, some companies do not have to recruit because they receive so many qualified unsolicited submissions due to their history of excellence in employee retention. When one company loses key personnel to other companies it is expensive to find and train replacements. It’s harder then ever to find good people. Usually the loss could have prevented and at the same time created a policy that actually helps to attract the best and the brightest candidates. Retention has become an essential business strategy for companies that wish to remain productive into the future.

The following project reflects information gathered from recently conducted exit interviews that were conducted in Hero Motocorp Ltd. When we look some employee going out of the our organization we may consider that the act may be his voluntary decision which prevailing him to take out step from the organization. But when we consider this as a organizational failure to retain the best talents with us we may seek to answer the questions does all the out going choice of the employee is subject to his personal choice or some other force motivating him to do so?

To a lay man Exit Interview may be a term which refers to the ascertaining from an outgoing employee as to what prompted him to leave the organization. Or we can view this term as a process where collection of data in systematic way , its aggregation for the organization as a whole, analyzing the data for identifying trends or patterns , if any in the employment turnover and using the findings to draft and implement strategies to arrest further turnovers and attrition in the prevailing organization. When information is collected from the employee leaving the organization in a atmosphere in which he/she feels comfortable in sharing and reliving their understanding of the events or factors that lead to their resignation.

In the best of the worlds, employees love their job like their co-workers work hard for their employers, get paid well for their work have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave.

But then there’s the real world, and in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their co-workers, want a change or because their spouse gets a dream job in another state so what does all that turnover cost? And what employees are likely to have the highest turnover? Who is likely to stay the longest?

It’s however no easy task for an HR manager to bridge the ever- increasing demand and supply gap of professionals. HR manager is not only required to fulfill his responsibility, but also find the right kind of people who can keep pace with the unique work patterns in this industry. Adding to this is the issue of maintaining consistency in the performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager is however the high attrition rate.

Conceptualization Of The Frame Work

Theoretical Technique

Employee retention is most critical issue facing corporate leaders as a result of the shortage of skilled labor, economic growth and employee turnover.

• Lower turnover
• Increase employee – and customer – satisfaction
• Increase quality and productivity
• Increase profits · Decrease cost

Costs Due To An Employee Leaving

When an employee leaves the job, the company has to bear some costs. The cost of the person who fills the post while the post is vacant. The cost of the lost productivity at a minimum of 50% of the person’s compensation and benefits cost for each week the position is vacant, even if there are people performing the work.

• The cost of conducting an exit interview to include the time of the person conducting the interview, of the person leaving, the administrative costs of the stopping payroll, benefit deduction, benefit enrollments.
• The cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found.
• The cost of training your company has invested in this employee who is leaving.
• The cost of the person who is leaving for the amount of the time the position is vacant.
• If a person leaves after the training it cost the company about RS60000

Costs Due To An Employee Leaving

There is some type of costs that a company has to bear when an employee is leaving the job.

• Recruitment Cost
• Training Cost
• Lost Productivity Cost
• New Hire Cost

Recruitment Cost

• The cost of advertisements, agency costs, employee referral costs, Internet posting costs.
• The cost of the internal recruiter’s time to understand the position requirements, develop and implement a sourcing strategy, review candidates assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. This can range from a minimum of 30 hour to over 100 hours per position.
• The cost of various candidate pre-employment tests to help assess a candidate’s skills, abilities, attitude, values and behaviors.

Training Cost

• The cost of orientation in terms of the new person’s salary and the cost of the person to conduct the orientation. Also include the cost of orientation materials.
• The cost of the person who conduct the training.
• The cost of various training materials needed including company or product manuals, computer or other technology equipments used in the delivery of training

Lost Productivity Costs

As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive. There are some guidelines :

• After training the employee is contributing at a 25% productivity level for the first 2-4 weeks. The cost therefore is 75% of the new employee’s full salary during that time period.
• During weeks 5 –12 the employee is contributing at a 50% productivity level. The cost is therefore 50% of the full salary during that time period.
• During weeks 13-20 the employee is contributing at a 75% productivity level. The cost is therefore 25% of full salary during that time period.
• The cost of mistakes the new employee makes during this elongate indoctrination period.

New Hire Cost

• Calculate the cost of bring the new person on board including the cost to put the person on the payroll establish the computer and security passwords and identification cards, telephone hookups, cost of establishing the e-mail accounts, or leasing other equipments such as cell phones, auto mobiles.
• The cost of a manager’s time spent developing trust and building confidence in the new employees work.

How To Retain The Employee

There are many ways to keep your prize employees happily on board. Here are some tips to help improve employee relations and ensure that your company keeps the best of best:

Employee Retention Tips

• Treat your employees like you treat your most valuable clients.

It is cheaper to keep your good employees than it is to hire and train new ones. Your top 20-25% should be courted as you would court and then service your top customers.

• Get your employees to ‘fall in Love’ with your organization. Communicate your vision in a compelling way. Show everyone the role they have to contribute to this vision. Create opportunities for people to connect with each other for support and to improve communication in work teams
• Strong retention strategies become strong recruiting advantages. Retention is much more effective when you put the right person into the right job. Know the job! Know the employee and their motivations

Half of the Fortune 500 companies are now using assessments to more fully understand each job and the soft skills that are required for top production within their specific company culture. These benchmarked skills are then compared against qualified applicants to help determine who will be successful in the position and fit well within their company’s culture. These assessments are also used as a powerful professional development tool to enhance the training of continuous life-long learning (which is another powerful retention strategy.) Advanced Fibre Communication is beginning to use this assessment process in hiring.

Money is important but it is not the only reason people stay with an organization. If your compensation plan is in the top 20-30% of your industry, then money will often not be the reason why people leave. Know the trends in benefit packages. Do your best to offer the ones your employees need? Consider offering the best of the rest. Money is not the only reason people stay, but it play a significant role in job satisfaction. You must offer your employees a competitive salary and honor their service and tenure with raises, bonuses and other monetary rewards. Fair pay shows that you respect them.

• Employee committees to help develop retention strategies are a very effective strategy. Get their input! Ask, what do people like about working here? What would you like changed to make your company a better place to work?
• Some companies, such as Advance Fiber Communication (AFC), have recognized that the special engineers and technical experts that are the cornerstones of their business require special attention. Victoria Perrault, VP of Administrative Services for AFC, says that her company has identified the top 25% of their staff and caters to these special people by meeting their financial requirements and looking for the best package of benefits that these people will find most positive as incentives to stay. They even have employee committees that work as ‘focus groups’ to determine why people stay at AFC and what they might want to see changed to make AFC an even better place to work.
• Leadership must be deeply invested in retention. Management must be skillful communicating company policies in a way that creates ‘buy-in’ from their staff and be open to employee input. Help create “ownership” in your employees. The companies with the best retention percentages are the same companies that are actively committed to retention. They know that is costs less to keep good people than to continuously have to replace unsatisfied employees and managers.
• Recognition, in various forms, is a powerful retention strategy. It does not have to cost a lot. US Dept. of Labor – 46% of people leave their jobs because they feel unappreciated.

Employee Retention during Post-Merger & Acquisition Phases: Challenges and Ways to Retain Employees in India

Abstract

India is a developing country where organizations are diversifying their portfolio and expanding businesses either by acquiring or merging with similar entities. Organizations are doing merger and acquisition as a growth strategy but employees do not accept this strategy easily, most the employees view such strategy as a threat for their career. The purpose of this research is to highlight the challenges in employee retention post-Merger & Acquisition in India. During the M&A, the main objective is to retain talent of an organization. One of the most challenging tasks for the organizations today is how to retain the talents they want to keep. Considering the criticality of M&A as a strategic tool, the methodology used for this research will be the researches conducted by researchers in this field. The literature review method will aimed at examine the perspective of HRs in terms of retaining talent of their organization post M&A.

Key words: Employee retention, Merger & Acquisition, Challenges.

Introduction

Merger and acquisition is an attractive option for the management and investors but employees views it as a threat. So after merger & acquisition organization face the problem of retention of employees. Employees have negative attitude towards merger & acquisitions due to following reasons:

• Uncertainty about the future organizational direction
• Feelings of loss of previous organizational culture
• Uncertainty regarding job security
• Perceptions of lack of leadership credibility
• Feelings of uncertainty due to a lack of communication
• Survivor guilt due to downsizing of other employees
• Feeling of increased job stress and workload

In actual, due to merger & acquisition, employees start search for new job and quit the job because of uncertainty and lose of trust over the organization. However high rate of employees turnover is not good for the organization. Employees turnover rate should be low due to following reasons:

1. Business continuity is key to realizing the benefits of a merger or acquisition
2. Large cost of hiring new employees, as well as the loss of knowledge/ intellectual capital, and the loss of client relationships.

Therefore, organizations must proactively work to build up employee trust to keep them. Employees are the assets of the organization and managers should make effective plans to reduce turnover during a merger or acquisition.

Objective

1. To highlight the challenges in retaining talent post-merger & acquisition.
2. To provide recommendations on how to deal with organizational human resources and retaining talent during merger & acquisition.

Literature Review

Researchers have tried to investigate various aspects of M&A in India (Nishith, 2010). As for predicting the targets of M&A and identifying the motives, the literature is scarce. Few papers have tried to predict the targets and determine the characteristics of acquiring firms like on manufacturing industries, financial sectors and (Gubbi, 2010). All these papers have adopted theories and models from west into Indian context directly to validate their hypothesis.

Siddharth and Gopi (2009) examine the effect of centralization of possession on firm performance and productivity. From one viewpoint, grouping of possession that, in turn, moves management control in the hands of a key financial specialist, reductions of organization issues connected with distributed ownership. While on the other side, it might prompt entrenchment of senior management which might be conflicting with the goal of profit maximization. Their paper focuses at the effect of M&A on profitability of organizations in India, where the corporate scene is overwhelmed by family-claimed and aggregate associated organizations.

Eilen and John (2004) talk about the qualities of both the acquirer and the target organizations in India between the years 1993-2004. Utilizing logic regression model, they reasoned that the acquirer firms have higher income, higher PE proportions, higher book value, higher fluid resources, and lower debt to total resources proportion which are measurably critical when compared with the target organizations. The acquired firms were smaller in revenue, had lower PE proportions, lower profits payout, and lower development in deals and resources. The acquirers had higher cash flows and lower influence which, on a basic level, run with the organization philosophy.

Mohibullah (2009) in his paper, ‘Effect of culture on mergers and acquisitions: A hypothetical structure’ has talked about four principle issues identified with cultural conflicts are highlighted: ambivalent and cultural issues inside the consolidated element, legitimate management of social incorporation, securing and hierarchical society and improper cultural integration process among the merged firms. The result of his paper was that associations need to build up a framework before mix, which must support appropriate correspondence among representatives from top to downwards. This methodology will prompt reducing the gravity of ambiguities found among the staffs amid the merger procedure.

Daniel (2010) in her paper discussing about corporate’s duty to staffs during a merger: organizational value and staff loyalty. She has talked about that how staff perspectives of the merged firm vary by their pre-merger foundation and to describe the effect of the inadequately perceived organizational goodness on staff’s value, emotional reaction to the merged firm including fulfillment, psychological contract, job stability and integrity. She has observed that view of organizational empathy; warmth and uprightness were emphatically related with worker loyalty, job stability, satisfaction and emotional attachment.

Most of the article has added to distinguishing what successful organizations with M&A experience are doing in their top management of individuals. Likewise to distinguish key HR Practices that separate top performing from non-top performing organizations with full combination three years after acquisition. The study has affirmed that fundamentally different strategic HRM practices are embraced by effective organizations. Taking care of HR issues during the integration procedure is a hard and critical task that can improve HR Practices and contribute decidedly to the organization’s outcomes (Sammer and Miller, 2005). Human resource experts can play a critical role during the due diligence process required in an M&A process. Apart from their transactional role as a contributor in the survey, assessment and integration of staff benefit policies; they can likewise help with the planning of workforce needs as far as talent pool and their role, in the evaluation and administration of legal liabilities. Strategic planning and early inclusion of HR teams during the M&A procedure can move toward boosting the potential for achievement (Linda, 2000).

Challenges In Employee Retention Post Merger & Acquisition

The employee perception of post-merger HR interventions into the various issues arising out of mergers or acquisitions was ascertained through the multiple talent retention survey and articles . After thorough analysis of various reports, following challenges are listed down in retaining talent post M&A:

A. Lack Of Shared Vision:

The integration of organizations vision is significant from M&A point of view. It is not as simple as to design any module. An M&A with a refined objective and pragmatic vision lead to successful integration process in terms of high return of shareholder value. New vision should be comprises of strategic growth for both the organization as well as high retention of talent which would be future leaders for the firm. Visions are borne from competent objectives, usually enhanced by visionary executives in multiple discussions and meetings. The issue is that several concepts look encouraging at the primary level, yet turn out to be futile later on. During the process of M&A, Two different organizations with unique vision integrate which result in ambiguous direction for the talent. In these situations, it is really challenging for the employee to scrutinize the actual vision of the firms and it takes a very long time figure out the revised shared vision of new firm. A synergistic approach is persistently co-composed with the business leader and proper partners to adjust to the necessities and timing of the association. Every association has its own mantra and must build up its own particular Shared Vision, mission, values, sustaining strategy and procedures – Its own particular Corporate Identity.

B. Management Leadership Clash:

Several management gurus have persisted on the significance of how executives can successfully oversee and inspire talent during merger and acquisition. Therefore, it is important for the executives that they play the role of leader when it has just been publicly announced about the merger and acquisition of their organization. He has concluded in one of his paper that a strategy based model is always crucial while dealing with any such integration process. Their model highlights on the stage of M&A that they characterize as the most difficult one for executives. That stage is the first in an M&A procedure and it is described by lack of data, mostly because of the requirement for approvals of management, ambiguity and uncertainty. This phase also influences both executives and employees. Officials of the acquired firm are dealt with as though they had been overwhelmed, making them feel humble and experience lost social positioning.

C. Cultural Mismatch:

Cultures are most important part of a company. Few research scholars propose that culture is to an association what personality is to an individual. As such, they recommend that cultures serve as bonding between organizational members, creating a feeling of union. Culture development is neither a phenomenon nor a planned activity. It does only depend on the thought, vision and ideas of the leaders or current executives, yet it is, to a remarkable degree, an inward response to outside goals. Organizations involved in the merger process may have different culture and it is crucial for the both entities to manage their culture which leads to either success of the merger or the failure of the merger. A firm’s culture is constituted of shared convictions and values that enable the people of the firm to get the meaning and allocate them with the guidelines for the way they behave in their firm (Davis, 30, 1994). The value of culture is not by and large perceived inside the firms, because keys preferences and assumptions parameter and decision lead to operate at a primitive phase.

D. Misaligned Structures:

It refers to the process that how restructuring process was accepted by both the organization post-merger and acquisition. The future of talent is highly dependent on the restructuring model adopted by the firm. Most of the organization has not been able to realign themselves according to the pre decided strategies which result in attrition of talent from their team as well as organization. Restructuring process not only limited to change in the policies but it also involve change in reporting managers, change in clients and many more. As we all know that, a change is never desired and always feared to accept. It is the last things that an HR wants to anticipate in their organization.

E. Employee Emotional Change:

Most of the psychologists have analysed the different phase of employee emotional change pre and post M&A process. The emotional changes begin from confusion, bargaining, focus, enthusiasm, exhaustion, letting Go, crystallization and integration. Below mentioned graph has been plotted between emotional responses of the employee during the course of integration to the time period of 12 months. The initial information about M&A leads to confusion and later on disengages the staffs which results, top performers are the first who leave the organization. When talent become disengage, it takes less time for consumers and shareholders to lose the brand value and switch to other product.

F. Poor Communication:

During the process of mergers, staffs are usually kept oblivious about the buy or sale of the enterprise. They often get the information about merger and acquisition after the merger and acquisition, through the corporate grapevine or through the media communication. This can lead to a misrepresented or distorted picture of the merger’s repercussions and to counterproductive exercises by staffs, which might be on edge about possible employment losses. So companies should inform all the staff timely and also discuss their concern to minimize the anxiety. This thing can built the cooperation and mutual trust among staffs furthermore gives them confidence that the new management is prepared to listen their concerns and feelings (Johnson 28, 2000).

G. Poor Change Management:

In an M&A deal, change management is a core C-suite responsibility—from creating urgency and building buy-in with the board of directors to communicating with employees to reassuring shareholders and, of course, customers. It should be the prime responsibility of the executives to consider change management as a critical issue and design a road map for their team members and for the organization as well. With introducing the change management analysis in the premerger phase which comprises of target identification, due diligence and development strategy of the acquisition process can increase the success rate of merger or acquisition process for their organizations.There are various techniques and methods for change management, but they all address the same basic questions: What kind of specific change and organization is trying to bring and reason behind that? Who is affected by the change? How should the change be implemented to realize the desired business benefits? Timely communications, training, and leadership engagement (both at the senior and middle-management levels) are the instruments required for managing a successful change.

WAYS TO RETAIN EMPLOYEES

1. Financial remuneration

Financial payment in the form of retention incentives has been considered a important factor after merger or acquisition and this cost is also considered as a part of cost of M & A. Companies believe that providing financial benefits are sufficient to retain the employees. However, the retention incentives can only make a bridge to build the trust of the employees on organization during M&A. Monetary benefits alone will not rebuild employee trust for long term. The company should consider other factors also to regain employee trust. Otherwise, once the retention incentives are paid, employees may start to look for other job opportunities.

2. Organizational support

The perceived organizational support perspective is guided by the principle that most employees need to feel that their organization respects and supports them in order to remain committed and loyal, satisfied with their jobs, and willing to work hard. Accordingly, employees develop global beliefs concerning the extent to which their organizations value their contributions and care about their well-being.

Sufficient access to information

Organizations should proactively create communication strategies that utilize effective organizational communication practices. For example, management should explain why the merger or acquisition was advantageous; repeat messages through multiple communication channels; recognize that employees prefer face-to-face communications; check to make sure that the messages sent were the messages received; and realize that not communicating has negative instead of neutral effects.

Ongoing learning & professional development

During the build-up to a merger or acquisition, organizations might discontinue training and development opportunities to cut costs and improve their financial bottom-lines. Management should rethink this practice since the costs of attrition can far outweigh continuing to give employees some level of discretionary resources. In addition, training that is clearly linked to job performance can be another example that reinforces the message that the organization values their employees and wants to help them improve their job-related skills.

3. Managerial support

Just as employees develop global beliefs concerning the extent to which the personified organization values their contributions and cares about their well-being through organizational support, employees develop impressions about how much their manager (or supervisor) values their contributions and cares about their well-being through perceived supervisor support.4 Managers play a critical role when employees are deciding whether or not to stay in an organization through carefully assessing employee potential, clearly articulating organizational goals, encouraging employee development, and helping attain necessary information, resources, and technology. Consequently, organizations should hold managers accountable for the retention of subordinates. They should also evaluate managers’ people management skills, as these skills are often either not evaluated or are undervalued when compared to business performance results.

The analysis of the 2004 employee survey data found that managers can provide support by taking the following steps:

• Monitoring employee workloads
• Meeting regularly with employees to communicate both organizational and managerial support
• Providing employee performance management feedback on a regular basis.

Monitoring workloads

One unfortunate consequence of mergers and acquisitions is that employees are often required to take on additional workloads. Accordingly, organizations should require managers to have conversations with employees about their potential new roles subsequent to the merger or acquisition and support them, as much as possible, in developing/acquiring/learning the knowledge, skills, and tools necessary to be effective in that new role.

Meeting with employees

A simple way managers can communicate organizational and managerial support to employees is by holding regular one-on-one meetings to discuss how the employees are coping with their new roles and often increased workloads. Through these one-on-one meetings, managers should also communicate care and concern about the well-being of the employees as individuals.

Providing performance management

Organizations should evaluate their performance management processes to determine whether they provide a rigorous identification of talent, effectively evaluate behavioral and professional competency development, and appropriately recognize achievements. In addition, organizations should require managers to provide individualized, formal feedback to employees. Managers should be encouraged to view the performance management process as a priority, investing time and energy in mentoring and developmental feedback discussions.

Conclusion

Retention incentives are an important part of any merger or acquisition. Employers need to retain their employees because they need to retain their intellectual capital, the client relationships that have been fostered, and the business focus that allows the organization to continue to operate effectively.

Financial remuneration during the time of a merger or acquisition can be important and is usually expected. In some cases, it can make the cost for a competitor to ‘buy out’ the employee prohibitive. Similar to a sign-on bonus for a new employee — which helps convince an employee to jump ship and take a new job — a retention incentive needs to be a counterbalance. The retention incentive should be designed to convince the employee that a new job in a new organization may not be the better option and to give their current organization’s merger or acquisition a chance to show its value.

However, it is critical that the organization understand the limitations of financial remuneration in an M&A situation. The additional dollars will not buy hard work or long-term loyalty. Instead, they should help open the door for the organization to begin demonstrating it will ‘do the right things’ for its employees. Those things may include providing managerial support and direction, clear communications about the business, learning opportunities, and strong leadership. The new organization also has to do a good job at communicating its vision for the new combined entity and how the combination is actually beneficial to the employees through growth and/or sustained viability.

In order to decrease post-M&A attrition, over the long term, organizations and managers must take tangible steps to improve employee commitment and employee retention by providing additional support. These types of effort can help keep your critical talent, intellectual capital, and client relationships on board.

Deloitte has service offerings and tools to help you in your efforts to keep employee turnover low and rebuild employee trust at each of these points in the M&A life cycle:

• Due diligence
• Developing the preferred employment model
• Identifying high-performing employees and critical roles
• Developing a retention strategy and designing a retention program
• Obtaining program and budget approvals
• Integration advisory
• Developing a communication strategy
• Developing performance management programs
• Creating training programs
• Providing leadership coaching
• Facilitating employee focus groups or round tables
• Developing employee engagement surveys and assessments
• Program management
• Completing management transition
• Improving communication across entities
• Facilitating complex integration activities

References:

1. https://www2.deloitte.com/content/dam/Deloitte/jp/Documents/human-capital/hcm/jp-hcm-hr-retention.pdf
2. https://www.shrm.org/hr-today/news/hr-magazine/0617/pages/how-to-retain-talent-during-mergers-and-acquisitions.aspx
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Factors Influencing Employee Retention in Companies

Abstract:

Employee Retention is one of the key challenges faced by IT Organization. Employees are the assets of any organization and organization cannot afford losing its key performers. Effective retention strategies can reduce employee turnover and increase retention within an organization. Key employees are the instrument for overall growth and development of an organization. Thus, for retaining best employees, an organization has to design appropriate strategies. The present paper is to identify the major causes for employee turnover and analyze the factors involved in retaining employees and also study the most prominent employee retention strategies adopted by the organization. For this purpose, primary data for the research is collected with the help of questionnaire and secondary data collected through books, research papers, online journals, project reports and internet. The sample of the study is 120 employees. The outcome of the study is expected to help the HR Managers of the IT Organizations in minimizing the attrition rate by developing effective retention strategies.

Keywords: Employee retention, Employee turnover, Attrition

Introduction:

Employee retention is a process in which the employees are encouraged to remain within the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. If the employees feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best employees. If they don‘t, they would be left with no good employees. A good employer should know how to attract and retain its employees. Organizations are facing the challenge of employee retention due to increased competition in the market. It is crucial for organization to hire competent employees to gain a competitive advantage in the market. However, retaining competent employee is more important than hiring. Organizations are always searching for talented employees and spent time and money on their employees for future return aspects. Factors like lack of skilled workforce, economic growth and employee turnover demand to devise policies to increase employee retention. It is hard to measure the exact cost associated with turnover for organizations. When an employee departs from an organization, he/she brings out with him all the information about the company, clients, projects and past history, very often to competitors.

The current study is aimed to analyze the employee retention strategies. It is imperative for an organization to develop an environment within the organization to motivate employees to stay in the organization. The organizations are also concerned about the costs associated with employee turnover, which is usually 2.5 times greater than the salary of an individual. However, organization facing employee turnover may not bear the cost of this situation in monetary terms only. If we assume that the overall workload remains constant, the short time burden on the remaining employees will increase and will have a negative impact on their motivation. In long run the organization losses the long-time employees that possess specific knowledge, know-how and skills. The cost is the shape of customer loss, productivity loss and business should also be considered. Moreover, the hiring of new employee is associated with additional expenses. These expenses are incurred in the form of advertising, screening, verifying credentials, interviewing and training of new employees etc.

Employee retention consists of procedures through which employees are boosted to become part of the organization for a longer period of time until he/she gets retired or until the project gets completed. For achieving individual as well as organizational goals, it is very much essential to retain talented employees. The HR manager must know how to attract and keep good employees because these are the employees who can make or break the organization‘s goodwill. Successful employee retention does not rely on a single strategy. The decision of an employee to stay in the organization is effected by a number of factors depending on a variety of elements like the individual‘s age, the family situation, mentoring, career and learning opportunities, good benefits, networking and the external job market or job title.

Talented and good employees are asset of an organization. Retaining talented employees is highly important for the long-term growth as well as success of the business, but the retention of employee has become the major problem facing today‘s organizations. The cost of hiring new employee varies and it includes a wide variety of expenses such as advertisements, recruiters‘ salaries and reimbursements of candidates‘ expenses. The company also incurs the various start-up costs o replacing an employee such as administrative expenses and training. Thus, it is necessary to retain the talented employees not because of the costs incurred on them by employers, but also because of the required output they give to the organization. Poaching and job-hopping has become the order of the day. As the Organization began to feel the impact of the rise of voluntary employee turnover, employee retention strategies emerged.

Statement Of The Problem:

IT industry is characterized by acute shortage of skilled IT professionals. In this context poaching and job-hopping has become the order of the day resulting in high level of attrition among Organizations. Retaining critical workforce in the Organization is therefore a challenge posed by HR Managers of IT Organizations. The study aims at providing relevant information required by HR Managers to devise Retention strategies specific for leading IT Companies (Shalom Infotech, DCS Global Info, Intelligent Soft Solutions, E-soft IT Solutions) in Trichy.

Objectives:

1. To identify the strategies for retaining employees in leading IT companies at Trichy.
2. To find out the major causes for the employee turnover.

Reasons For Employee Turnover:

Job is not what the employee expected to be: Sometimes the job responsibilities don‘t come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction.

Job and person mismatch:

A candidate may be fit to do a certain type of job which matches his personality. If he is given a job which mismatches his personality, then he won‘t be able to perform it well and will try to find out reasons to leave the job.

No growth opportunities:

No or less learning and growth opportunities in the current job will make candidate‘s job and career stagnant.

Lack of appreciation:

If the work is not appreciated by the supervisor, the employee feels de-motivated and loses interest in job. Lack of trust and support in co-workers, seniors and management: Trust is the most important factor that is required for an individual to stay in the job. Non-supportive co-workers, seniors and management can make office environment unfriendly and difficult to work in. Stress from overwork and work life imbalance: Job stress can lead to work life imbalance which ultimately many times lead to employee leaving the organization.

Compensation:

Better compensation packages being offered by other companies may attract employees towards themselves.

New job offer:

An attractive job offer which an employee thinks is good for him with respect to job responsibility, compensation, growth and learning etc. can lead an employee to leave the organization.

Research Methodology:

The present study adopted the descriptive research design. Regarding the population, 120 employees were considered as sample in which 30 employees are taken from each company. Data regarding employee perceptions on employee retention practices were collected by using Convenience Sampling method. The primary data was collected through questionnaires which were filled by the employees of the company. The variables used in the study are career advancement and opportunities, superior support, work environment and facilities, work pressure, rewards and recognition. For analyzing the major determinants of employee retention, the secondary data was gathered from the books, research papers, online journals, project reports and internet.

Limitations Of The Study:

• Due to time constraint and administrative issues of the organization, the samples size had to be restricted.
• The respondents might not have disclosed their actual opinions on certain issues related to the organization which could be confidential in nature.

Data Analysis:

A questionnaire was designed in order to collect respondent opinion on their perceptions regarding ER strategies in the organization. The questionnaire mainly consisted of closed-end questions and Likert scale technique has been used. The responses from every respondent for each determinant are scored on a five point scale i.e.; Highly Satisfied, Satisfied, Neutral, Dissatisfied and Highly Dissatisfied. Higher scores in each determinant indicate the high level of impact on employee retention and lower scores indicates less impact of determinants level of job satisfaction. The questionnaire was consisted of 30 items, excluding demographics were asked from the respondents, which were related to the determinants taken in the study. Data collected from the study were presented and analyzed using MS-Excel applications. The responses of the various respondents have been given below

• Major Factors
• Responses
• Highly Satisfied
• Satisfied
• Neutral
• Dissatisfied
• Highly Dissatisfied

1. Career Advancement and Opportunities (20; 39; 28; 15; 18)
2. Superior support (32; 25; 30; 17; 16)
3. Work Environment and facilities (15; 40; 31; 21; 13)
4. Work pressure (11; 15; 22; 30; 42)
5. Rewards and Recognition (13; 18; 25; 29; 35)

Career Advancement and Opportunities:

Out of 120 respondents, the overall response of IT Employees with respect to career advancement and opportunities is 32.5% respondents were satisfied and 16.7% of respondents were highly satisfied which indicates that there are better career advancement and opportunities in those IT companies.

Superior support:

Out of 120 respondents, the overall response of IT Employees with respect to superior support is 26.7% respondents were highly satisfied and 20.8% of respondents were satisfied which indicates that there is good relationship between superior and employees in those IT companies.

Work Environment and facilities:

Out of 120 respondents, the overall response of IT Employees with respect to work environment and facilities is 33.3% respondents were satisfied and 12.5% of respondents were highly satisfied which indicates that employees feel comfortable with the working environment and satisfied with the facilities provided by those IT companies.

Work pressure:

Out of 120 respondents, the overall response of IT Employees with respect to work pressure is 35% respondents were highly dissatisfied and 25% of respondents were dissatisfied which indicates that employees are overloaded with work in those IT companies.

Rewards and Recognition:

Out of 120 respondents, the overall response of IT Employees with respect to rewards and recognition is 29.2% respondents were highly dissatisfied and 24.2% of respondents were dissatisfied which indicates that the employees are not rewarded for their performance in those IT companies.

Findings:

In this study it is understood that, there are three retention variables which influences most for retaining employees are Career advancement and opportunities, Superior support, Work environment and the remaining two retention variables such as Work pressure, Rewards and recognition are least influencing for employee retention in IT companies.

Suggestions:

1) The organization should provide stress free work environment for employees by providing flexible working hours through job sharing, week-end off and work from home so that the people enjoying their work, make work place cheerful and fun-filled as possible.

2) The knowledgeable and skilled employees must be rewarded by the company for their best performance by giving periodical raise in salary and promotion.

Conclusion:

Employee turnover increases the attrition rate and reduces the retention of employees. Retention of the employees reduces the cost of the product, increase productivity and condense brain drain of the particular industry. The exponential growth of IT sector has prompted the Organization to focus on employee centered employment relationship to hold back the employees. The employee retention has been quite challenge for IT-units and HRD should focus on Work pressure, Rewards and recognition retention strategies. Organizations have to provide their employees with the best career advancement and opportunities, supervisor support, working environment, work pressure, rewards, and recognition and should work on them. In this way, it will help the employees to put their best in the organization.

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