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Employee-retention-

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EMPLOYEE RETENTION IN PRIVATE SECTOR




                    DISSERTATION REPORT

                                 2010

S...
CERTIFICATE




This is to certify that the dissertation entitled (employee retention in public sector) and
submitted by -...
ABSTRACT


Employee retention is a process in which the employees are encouraged to remain with the
organization for the m...
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  1. 1. EMPLOYEE RETENTION IN PRIVATE SECTOR DISSERTATION REPORT 2010 Submitted for the partial fulfillment of the requirement for the award Of POST GRADUATE DIPLOMA IN MANAGEMENT SUBMITTED BY --------------------- UNDER THE SUPERVISION OF ----------------------- DEPARTMENT OF MANAGEMENT
  2. 2. CERTIFICATE This is to certify that the dissertation entitled (employee retention in public sector) and submitted by ------------------- having roll ----------------for the partial fulfilment of the requirements of ------------------embodies the bonafide work done by her supervision. Signature of guide Place: Date:
  3. 3. ABSTRACT Employee retention 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 harbouring bright new ideas for its growth Blog Online And Earn Money.
  4. 4. ACKNOWLEDGEMENT I am very grateful --------------- for giving me the opportunity of working in this project and give me useful instruction . I extend my regards and sincere thanks to----------------------with who support & effort, I completed my project. Also I am thankful to the management and my fellow colleges for making my project duration a memorable and fruitful one. -------------------]
  5. 5. CONTENTS 1. Introduction 2. Company profile. • Need of the study • Scope of the study 2. Research methodology • Objective of the study • Research methodology (Sample size, Instrument used, Methods of data collection) • Scope of the study • limitations 6. Descriptive work 7. Data Analysis 8. Suggestion and Conclusions 9. Bibliography 10. References 11.Appendices 12. Checklist of the items in the project
  6. 6. Introduction Employee turnover is one of the largest though widely unknown costs an organization faces. While companies routinely keep track of various costs such as supplies and payroll, few take into consideration how much employee turnover will cost them: Ernst & Young estimates it costs approximately $120,000 to replace 10 professionals. According to research done by Sibson & Company, to recoup the cost of losing just one employee a fast food restaurant must sell 7,613 combo meals at $2.50 each. Employee turnover costs companies 30 to 50% of the annual salary of entry-level employees, 150% of middle-level employees, and up to 400% for upper level, specialized employees. Now that so much is being done by organizations to retain its employees. Why is retention so important? Is it just to reduce the turn over costs ? Well, the answer is a definite no. It’s not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting poached. Retention involves five major things:  Compensation  Environment  Growth  Relationship  Support  Compensation: Compensation constitutes the largest part of the employee retention process. The employees always have high expectations regarding their compensation packages. Compensation packages vary from industry to industry. So an attractive compensation package plays a critical role in retaining the employees.
  7. 7. Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacations, etc. While setting up the packages, the following components should be kept in mind:  Salary and monthly wage: It is the biggest component of the compensation package. It is also the most common factor of comparison among employees. It includes • Basic wage • House rent allowance • Dearness allowance • City compensatory allowance Salary and wages represent the level of skill and experience an individual has. Time to time increase in the salaries and wages of employees should be done. And this increase should be based on the employee’s performance and his contribution to the organization. Bonus: Bonuses are usually given to the employees at the end of the year or on a festival. Economic benefits: It includes paid holidays, leave travel concession, etc. Long-term incentives: Long term incentives include stock options or stock grants. These incentives help retain employees in the organization's start up stage.  Health insurance: Health insurance is a great benefit to the employees. It saves employees money as well as gives them a peace of mind that they have somebody to take care of them in bad times. It also shows the employee that the organization cares about the employee and its family.  After retirement: It includes payments that an Employee gets after he retires like EPF (Employee Provident Fund) etc.  Miscellaneous compensation: It may include employee assistance programs (like psychological counselling, legal assistance etc), discounts on company products, use of a company cars, etc.
  8. 8. Scope of the study It is not about managing retention. It is about managing people. If an organization manages people well, employee retention will take care of itself. Organizations should focus on managing the work environment to make better use of the available human assets. People want to work for an organization which provides • Appreciation for the work done • Ample opportunities to grow • A friendly and cooperative environment • A feeling that the organization is second home to the employee Organization environment includes • Culture • Values • Company reputation • Quality of people in the organization • Employee development and career growth • Risk taking • Leading technologies • Trust Types of environment the employee needs in an organization • Learning environment: It includes continuous learning and improvement of the individual, certifications and provision for higher studies, etc. • Support environment: Organization can provide support in the form of work-life balance. Work life balance includes:  Flexible hours  Telecommuting  Dependent care  Alternate work schedules  Vacations  Wellness
  9. 9. • Work environment: It includes efficient managers, supportive co-workers, challenging work, involvement in decision-making, clarity of work and responsibilities, and recognition. Lack or absence of such environment pushes employees to look for new opportunities. The environment should be such that the employee feels connected to the organization in every respect. Growth and Career Growth and development are the integral part of every individual’s career. If an employee can not foresee his path of career development in his current organization, there are chances that he’ll leave the organization as soon as he gets an opportunity. The important factors in employee growth that an employee looks for himself are: • Work profile: The work profile on which the employee is working should be in sync with his capabilities. The profile should not be too low or too high. • Personal growth and dreams: Employees responsibilities in the organization should help him achieve his personal goals also. Organizations can not keep aside the individual goals of employees and foster organizations goals. Employees’ priority is to work for themselves and later on comes the organization. If he’s not satisfied with his growth, he’ll not be able to contribute in organization growth. • Training and development: Employees should be trained and given chance to improve and enhance their skills. Many employers fear that if the employees are well rained, they’ll leave the organization for better jobs. Organization should not limit the resources on which organization’s success depends. These trainings can be given toimprove many skills like:  Communications skills  Technical skills  In-house processes and procedures improvement related skills or customer satisfaction related skills  Special project related skills Need for such trainings can be recognized from individual performance reviews, individual meetings, employee satisfaction surveys and by being in constant touch with the employees. Importance of Relationship in Employee Retention Program Sometimes the relationship with the management and the peers becomes the reason for an employee to leave the organization. The management is sometimes not able to provide an employee a supportive work culture and environment in terms of personal or
  10. 10. professional relationships. There are times when an employee starts feeling bitterness towards the management or peers. This bitterness could be due to many reasons. This decreases employee’s interest and he becomes demotivated. It leads to less satisfaction and eventually attrition. A supportive work culture helps grow employee professionally and boosts employee satisfaction. To enhance good professional relationships at work, the management should keep the following points in mind. Respect for the individual: Respect for the individual is the must in the organization. • Relationship with the immediate manager: A manger plays the role of a mentor and a coach. He designs and plans work for each employee. It is his duty to involve the employee in the processes of the organization. So an organization should hire managers who can make and maintain good relations with their subordinates. • Relationship with colleagues: Promote team work, not only among teams but in different departments as well. This will induce competition as well as improve the Relationship among colleagues. • Recruit whole heartedly: An employee should be recruited if there is a proper place and duties for him to perform. Otherwise he’ll feel useless and will be dissatisfied. Employees should know what the organization expects from them and what their expectation from the organization is. Deliver what is promised. Promote an employee based culture: The employee should know that the organization is there to support him at the time of need. Show them that the organization cares and he’ll show the same for the organization. An employee based culture may include decision making authority, availability of resources, open door policy, etc. • Individual development: Taking proper care of employees includes acknowledgement to the employee’s dreams and personal goals. Create opportunities for their career growth by providing mentorship programs, certifications, educational courses, etc. • Induce loyalty: Organizations should be loyal as well as they should promote loyalty in the employees too. Try to make the current employees stay instead of recruiting new ones. Support Lack of support from management can sometimes serve as a reason for employee retention. Supervisor should support his subordinates in a way so that each one of them is a success. Management should try to focus on its employees and support them not only in their difficult times at work but also through the times of personal crisis. Management can support
  11. 11. employees by providing them recognition and appreciation. Employers can also provide valuable feedback to employees and make them feel valued to the organization. The feedback from supervisor helps the employee to feel more responsible, confident and empowered. Top management can also support its employees in their personal crisis by providing personal loans during emergencies, childcare services, employee assistance Programs, conseling services, etc Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. Thus employers can support their employees in a number of ways as follows: • By providing feedback • By giving recognition and rewards • By counseling them • By providing emotional support
  12. 12. COMPANY PROFILE In August, 1994 the Housing Development Finance Corporation Limited (HDFC) was incorporated in the name of HDFC Bank Limited. The Reserve Bank of India has approved in principle to set up private banks. HDFC was one of the first organizations to receive in principle approval from RBI. The HDFC Bank has its registered office in Mumbai. In January 1995, the operations of HDFC Bank as a commercial bank has commenced. In India and in international markets HDFC has an impeccable track record. HDFC has maintained a healthy growth and a consistency in its operations and remained as a leader in market of mortgages. The portfolio of HDFC’s outstanding loan has a million dwelling units. HDFC has a large corporate client base for housing related credit facilities. HDFC was ideally positioned to promote a bank in the Indian market with its experience and strong reputation in market of finance. i Objective : · HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team determined to accomplish the vision of becoming a world-class Indian bank. · Bank’s business philosophy is based on four core values - Customer Focus, Operational Excellence, Product Leadership and People. Bank believes that the ultimate identity and success of bank will reside in the exceptional quality of our people and their extraordinary efforts. For this reason, bank is committed to hiring, developing, motivating and retaining the best people in the industry.
  13. 13. Mission : Bank mission is to be “a World Class Indian Bank”, benchmarking bank against international standards and best practices in terms of product offerings, technology, service levels, risk management and audit & compliance. The objective is to build sound customer franchises across distinct businesses so as to be a preferred provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, consistent with the Bank’s risk appetite. Bank is committed to do this while ensuring the highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank has been recognized as 'Best Bank in India' in the magazine rankings as well as surveys year on year. HDFC Bank is the most preferred employer in banking industry in India. Bank business strategy emphasizes the following: · Increase bank’s market share in India’s expanding banking and financial services industry by following a disciplined growth strategy focusing on quality and not on quantity and delivering high quality customer service. · Leverage technology platform and open scalable systems to deliver more products to more customers and to control operating costs. · Maintain current high standards for asset quality through disciplined credit risk management. · Develop innovative products and services that attract targeted customers and address inefficiencies in the Indian
  14. 14. financial sector. · Continue to develop products and services that reduce cost of funds. · Focus on high earnings growth with low volatility. · Vision : Visions don’t change quite often. Near-term objectives do. The country’s second largest private bank still strives to become a “world-class Indian bank”, a vision that was documented in its first annual report back in 1995. Call them less aggressive or more conservative, it doesn’t ruffle the top management of Housing Development Financing Corporation (HDFC) Bank. As American author, Frank Herbert says: “There’s no secret to balance. You just have to feel the waves.” It may be quite a unique distinction but HDFC Bank hasn’t seen a change in the leadership since day one. Aditya Puri, in his capacity as MD and CEO, has continued to surprise industry critics and consistently delivered a growth of around 25-30% (Quos) in net profit for the past 40-50 quarters. Today, the Rs 54,000-crore bank services over 11 million customers and operates from more than 1,200 branches in 444 Indian towns and cities, while some 2,500-odd ATMs offer anytime, anywhere banking. For HDFC Bank executive director Paresh Sukthankar, this consistent performance has been his defining moment at the bank. “It may look less glamorous, but personally this achievement has been much more valuable. It’s very easy to have a great quarter, and fall back to mediocrity, in terms of a lazy quarter. What makes this success even more remarkable is the fact that the last 10
  15. 15. years have seen a fair amount of volatility in the macroeconomic environment, domestically as well as globally,” he quips. e Strengths : Highest level of ethical standards · Professional integrity · Corporate governance · Regulatory compliance · Business Philosophy : The four values are the bank’s business philosophy, · Operational Excellence · Customer Focus · Product Leadership · People · Management : · Chairman In July 2001 Mr. Jadish Capoor has taken the responsibilities of the bank as Chairman. He was a Deputy Governor of the RBI. · Managing Director Mr. Aditya Puri is the managing director of the HDFC bank, before he was with Citibank as a head for operations in Malaysia. · Board of Directors The members of the HDFC bank’s Board of Directors are senior banking professionals with experience in abroad and India, who head various businesses.
  16. 16. PROMOTERS : HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment. p BUSINESS FOCUS : HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values - Operational Excellence, Customer Focus, Product Leadership and People. P CAPITAL STRUCTURE : At present, HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5 billion), of this the paid-up amount is Rs 424.6
  17. 17. crore (Rs.4.2 billion). In terms of equity share, the HDFC Group holds 19.4%. Foreign Institutional Investors (FIIs) have around 28% of the equity and about 17.6% is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). The bank has about 570,000 shareholders. Its shares find a listing on the Stock Exchange, Mumbai and National Stock Exchange, while its American Depository Shares are listed on the New York Stock Exchange (NYSE), under the symbol 'HDB'. N Awards : Awards with its strengths and its talented people the HDFC banks have made all its efforts to achieve its mission to be World Class Indian bank. Its services are recognized not only nationally but also internationally. The HDFC bank is appreciated with so many awards like: · Asian Banker Excellence Awards 2009 · The Asset Triple A Awards · Financial Insights Innovation Awards 2010 · Global Finance Awards 2010 · Business World Best Bank Award 2009
  18. 18. 2011 BloombergUTV's Best Bank Financial Leadership Awards 2011 IBA Banking Winner - Technology Awards 1) Technology Bank of the Year 2010 2) Best Online Bank 3) Best Customer Initiative 4) Best Use of Business Intelligence 5) Best Risk Management System Runners Up - Best Financial Inclusion IDC FIIA Awards Excellence in Customer Experience 2011
  19. 19. 2010 Outlook Money Best Bank 2010 Awards Businessworld Best Best Bank (Large) Bank Awards 2010 Teacher's Mr. Aditya Puri Achievement Awards 2010 (Business) The Banker and Best Private Bank in India PWM 2010 Global Private Banking Awards Economic Times Business Leader of the Year - Mr. Aditya Puri Awards for Corporate Excellence 2010 Forbes Asia Fab 50 Companies - 5th year in a row NDTV Business Best Private Sector Bank Leadership Awards 2010 The Banker World's Top 1000 Banks Magazine MIS Asia IT BEST BOTTOM-LINE I.T. Category Excellence Award 2010 Dun & Bradstreet Banking Awards 2 Overall Best Bank 2010 Best Private Sector Bank Best Private Sector Bank in SME Financing Institutional HDFC Bank MD, Mr. Aditya Puri among "Asian Captains of Investor Magazine Finance 2010"
  20. 20. RESEARCH METHODOLOGY Research Design: The research design indicates the type of research methodology under taken to collect the information for the study. The researcher used both descriptive and analytical type of research design for his research study. The main objective of using descriptive research is to describe the state of affairs as it exits at present. It mainly involves surveys and fact finding enquiries of different kinds. The researcher used descriptive research to discover the characteristics of customers. Descriptive research also includes demography characteristic of consumer who use the product. The researcher also used analytical research design to analyze the existing facts from the data collected from the customer. Area of study: The area of study is confined to employees of HDFC BANK .LTD Research instrument: The Structured questionnaire is used as the research instrument for the study. Questionnaire Design: The questionnaire framed for the research study is a structured questionnaire in which all the questions are predetermined before conducting the survey. The form of question is of both closed and open type. The scales used to evaluate questions are: • Dichotomous scale (Yes or No) • Likert 5 point scale (Highly satisfied, satisfied, Neither Satisfied nor dissatisfied, Dissatisfied, Highly dissatisfied)
  21. 21. • Category scale (Multiple items) • Ranking type (R1, R2, R3…) The questionnaire for the research was framed in a clear manner such that it enables the respondents to understand and answer the question easily. The questionnaire was designed in such a way that the questions are short and simple and is arranged in a logical manner. Pilot study: It is appropriate to conduct pilot survey to check the reliability of the questionnaire. So pilot study was conducted on 5 respondents which is a 10% of the sample. Sampling design: A Sample design is a definite plan for obtaining a sample from a given population. It is the procedure used by the researcher in selecting items for the sample. Sample size: Sample size=125 samples, variance and confidence methods are used for determining sample size. Sampling Technique: The researcher adopted simple random sampling for the study.
  22. 22. DATA COLLECTION METHOD Primary data: Primary data is the new or fresh data collected from the respondents through structured scheduled questionnaire. Secondary data: The secondary data are collected through the structured questionnaire, literature review and also from the past records maintained by the company. STATISTICAL TOOLS AND TECHNIQUES PERCENTAGE ANALYSIS: Percentage = (No. Of respondents / total no. Of respondents)*100 WEIGHTED AVERAGE METHOD: Formula: Mean score = total score/no of respondents. Where total score = no of respondents*weighted average CHI – SQUARE TEST: 1. Null Hypothesis (Ho): There is no difference in attributes 2. Alternate Hypothesis(H1): There is a difference in attributes 3. Level of significance α = 0.05 4. Degrees of freedom = (r-1)(c-1) 5. Expected frequency: E = R.T × C.T
  23. 23. 6. Calculation of : Σ = Σ (O-E)2 7. The tabulated value of at given level of significance with (r-1)(c-1) ONE RUN TEST: Null hypothesis (H0): There is a no significant relationship between the variables Alternate hypothesis (H1): There is significant relationship between the variables μr = 2 n1 n2 + 1 n1 + n2 2 n1 n2- n1- n1 σr = 2 n1n2 (n1+ n2)2 (n1+ n2-1 ) Lower limit = μr + (2.58) σ Upper limit = μr + (2.58) σ KENDALL’S COEFFICIENT OF CONCORDANCE: Null hypothesis (H0): There is a difference in attributes Alternate hypothesis (H1): There is no difference in attributes Σ Rj = (Rj-Rj)2 S= Rj = Σ Rj LIMITATIONS OF THE STUDY 1. The findings of the study are subjected to bias and prejudice of the respondents. 2. Area of the study is confined to the employees in Chennai only. 3. Time factor can be considered as a main limitation. 4. The findings of the study are solely based on the information provided by the respondents.
  24. 24. 5. The accuracy of findings is limited by the accuracy of statistical tools used for analysis. 6. Findings of the research may change due to area, demography, age condition of economy etc. Analysis and Interpretation of data 1. PERCENTAGE ANAYLSIS 2. AWARENESS OF HR POLICIES Chi-Square Test To find whether there exists a significant relationship between Work Culture of the Company and interpersonal relationship between employees. H0: There is a no significant relationship between Work Culture of the Company and interpersonal relationship between employees. H1: There is a significant relationship between Work Culture of the Company and interpersonal relationship between employees. Calculated value is more than table value therefore accept H0 Result: There is a significant relationship between overall satisfaction and aspects of job. KENDALL’S COEFFICIENT OF CONCORDANCE Null hypothesis (H0): There is a no significant difference in the rank assigned by respondents towards the attributes that gives them satisfaction in the company. Alternate hypothesis (H1): There is a significant difference in the rank assigned by respondents towards the attributes that gives them satisfaction in the company.
  25. 25. Ranking Based on Satisfaction K=20: Salary, Superior Role, Team Coordination, Work responsibilities, Rules and Policies, Physical work environment Training Calculated value : S= 5815.714 Table value : 1158 Calculated value is more than table value therefore reject H0 Result: There is a significant difference in the rank assigned by respondents towards the attributes that gives them satisfaction in the company. ONE RUN TEST: Null hypothesis (H0): The samples are not taken randomly. Alternate hypothesis (H1): The samples are taken randomly. Retention Management: Background: retention management is a highly topical subject and an important dilemma many organizations might face in the future, if not facing it already. We believe that the leader plays a key role in employee retention and retention management. The concept of retention management can both have a narrow, and a broader significance. Both parts of its significance are generally included in this thesis. The background of the thesis present a few articles that discuss issues that makes it important for the organization, and the leaders, to work hard with retention management. The research is based on the leaders in the Finnish case company Tradeka. Following key questions are intended to be answered: What are the consequences between leaders actions and employees retention? Which is the leader’s role when it comes to retaining employees? Purpose statement: The purpose of the thesis is to investigate and analyze how company leaders today can retain their key employees. How can the provision of key human resources
  26. 26. develop a long-term relationship that makes top employees stay in the company? The study aims to establish the procedure leaders apply to retain employees. The purpose is to compare the qualitative study, made at the case company, with findings from the thesis theoretical framework. Research method: The study is a qualitative, as well as a theoretical study where empirical findings and theories has been compared. The intention of investigating and using the Finnish company Tradeka Limited as a case company, is to make the information from the theories more valid, and also the interest in how retention management works in practice. Eleven qualitative interviews were conducted at Tradeka? financial department, both with supervisors and employees to get a broader view at the phenomenon retention management. Result: Leaders and their skill in creating a culture of retention, has becoming a key in why people stay and what usually drives them away from a company. The leader has become the main factor in what motivates people’s decision to stay or leave. For organizations to keep its key employees their number one priority should be to look at their management, because people leave managers and not companies. Characteristics in a leader that are of importance, as the leader plays a key role in retention management is: trust builder, esteem builder, communicator, talent developer and coach, and talent finder. The leader’s relation to the employees plays a central role in retaining employees. Employee Retention Strategies The basic practices which should be kept in mind in the employee retention strategies are: 1. Hire the right people in the first place. 2. Empower the employees: Give the employees the authority to get things done. 3. Make employees realize that they are the most valuable asset of the organization. 4. Have faith in them, trust and respect them 5. Provide them information and knowledge. 6. Keep providing them feedback on their performance. 7. Recognize and appreciate their achievements. 8. Keep their morale high. 9. Create an environment where the employees want to work and have fun.
  27. 27. These practices can be categorized in 3 levels: • Low, • medium and • high level. • Low Level Employee Retention Strategies:  Appreciating and recognizing a well done job·  Personalized well done and thank-you cards from supervisors·  Congratulations e-cards or cards sent to spouses/families·  Voicemails or mess·ages from top management  Periodic days off for good performance·  Rewards ( gift, certificates, monetary and non monetary rewards)·  Recognizing professional as well as personal significant events·  Wedding gifts  Anniversary gifts  New born baby gifts  Scholarships for employee’s children  Get well cards/flowers  Birthday cards, celebrations and gifts  Providing benefits·  Home insurance plans  Legal insurance  Travel insurance  Disability programs  Providing perks: It includes coupons, discounts, rebates, etc·  Discounts in cinema halls, museums, restaurants, etc.  Retail store discounts  Computer peripherals purchase discounts  Providing workplace conveniences·  On-site ATM  On-site facilities for which cost is paid by employees  laundry facility for bachelors
  28. 28.  Shipping services  Assistance with tax calculations and submission of forms  Financial planning assistance  Casual dress policies  Facilities for expectant mothers  Parking  Parenting guide  Lactation rooms  Flexi timings  Fun at work·  Celebrate birthdays, anniversaries, retirements, promotions, etc  Holiday parties and holiday gift certificates  Occasional parties like diwali, holi, dushera, etc  Organize get together for watching football, hockey, cricket matches  Organize picnics and trips for movies etc  Sports outings like cricket match etc  Indoor games  Occasional stress relievers·  “Casual dress” day  “Green is the color” day  Handwriting analysis  Tatoo, mehandi, hair braiding stalls on weekends  Mini cricket in office  Ice cream Fridays  Holi-Day breakfast  Employee support in tough time or personal crisis·  Personal loans for emergencies  Childcare and eldercare services  Employee Assistance Programs ( Counseling sessions etc)  Emergency childcare services • Medium Level Strategies for Employee Retention  Appreciating and recognizing a well done job  Special bonus for successfully completing firm-sponsored certifications
  29. 29.  Benefit programs for family support  Child adoption benefits  Flexible benefits  Dependents care assistance  Medical care reimbursement  Providing conveniences at workplace·  Gymnasiums·  Athletic membership program·  Providing training and development and personal growth opportunities·  Sabbatical programs  Professional skills development  Individualized career guidance • High Level Strategies  Promoting Work/Life Effectiveness·  Develop flexible schedules·  Part-time schedules·  Extended leaves of absence·  Develop Support Services·  On-site day care facility etc. · • Understand employee needs: This can be done through proper management style and culture·  Listen to the employee and show interest in ideas·  Appreciate new ideas and reward risk-taking  Show support for individual initiative  Encourage creativity • Encouraging professional training and development and/or personal growth opportunities: It can be done through:·  Mentoring programs  Performance feedback programs  Provide necessary tools to the employees to achieve their professional and personal goals  Getting the most out of employee interests and talents
  30. 30.  Higher study opportunities for employees  Vocational counselling  Offer personalized career guidance to employees • Provide an environment of trust: Communication is the most important and effective way to develop trust.·  Suggestion committees can be created  Open door communication policy can be followed • Regular feedbacks on organization’s goals and activities should be taken from the employees by:  Management communications  Intranet and internet can be used as they provide 24X7 access to the information Newsletters, notice boards, etc. • Hire the right people from the beginning: employee retention is not a process that begins at the end. The process of retention begins right from the start of the recruitment process. The new joinees should fit with the organization’s culture. The personality, leadership characteristics of the candidate should be in sync with the culture of the hiring organization. Referral bonus should be given to the employees for successful hires. They are the best source of networking. Proper training should be given to the managers on interview and management techniques. An internship program can be followed to recruit the fresh graduates. Retention Success Mantra • Transparent Work Culture In today’s fast paced business environments where employees are constantly striving to achieve business goals under time restrictions; open minded and transparent work culture plays a vital role in employee retention. Companies invest very many hours and monies in training and educating employees. These
  31. 31. companies are severely affected when employees check out, especially in the middle of some big company project or venture. Although employees most often prefer to stay with the same company and use their time and experience for personal growth and development, they leave mainly because of work related stress and dissatisfactions .More and more companies have now realized the importance of a healthy work culture and have a gamut of people management good practices for employees to have that ideal fresh work-life. Closed doors work culture can serve as a deterrent to communication and trust within employees which are potential causes for work- Related apathy and frenzy. A transparent work environment can serve as one of the primary triggers to facilitate accountability, trust, communication, responsibility, pride and so on. It is believed that in a transparent work culture employees rigorously communicate with their peers and exchange ideas and thoughts before they are finally matured in to full-blown concepts. It induces responsibility among employees and accountability towards other peers, which gradually builds up trust and pride. More importantly, transparency in work environment discourages work-politics which often hinders company goals as employees start to advance their personal objectives at the expense of development of The company as a single entity. . Quality Of Work The success of any organization depends on how it attracts, recruits, motivates, and retains its workforce. Organizations need to be more flexible so that they develop their talented workforce and gain their commitment. Thus, organizations are required to retain employees by addressing their work life issues. The elements that are relevant to an individual’s quality of work life include the task, the physical work environment, social environment within the organization, administrative system and relationship between life on and off the job. The basic objectives of a QWL program are improved working conditions for the Employee and increase organizational effectiveness.
  32. 32. Providing quality work life involves taking care of the following aspects: Occupational health care: The safe work environment provides the basis for the person to enjoy working. The work should not pose a health hazard for the person. The employer and employee, aware of their risks and rights, could achieve a lot in Their mutually beneficial dialogue. Suitable working time: Organizations are offering flexible work options to their employees wherein employees enjoy flexi-timings for dedicating their efforts at work. Appropriate salary: The appropriate as well as attractive salary has always been an important factor in retaining employees. Providing employees salary at par with the other counterparts of above that what competitors are paying motivates them to stick With the company for long. QWL consists of opportunities for active involvement in group working arrangements or problem solving that are of mutual benefit to employees or employers, based on labor management cooperation. People also conceive of QWL as a set of methods, such as autonomous work groups, job enrichment, and high-involvement aimed at boosting the satisfaction and productivity of workers. It requires employee commitment to the organization and an environment in which this commitment can flourish. Providing quality at work not only reduces attrition but also helps in reduced absenteeism and improved job satisfaction. Not only does QWL contribute to a company's ability to recruit quality people, but also it enhances a company's competitiveness. Common beliefs support the contention that QWL will positively nurture a more flexible, loyal, and motivated workforce, which are essential in determining the company's competitiveness. Supporting Employees Organizations these days want to protect their biggest and most valuable asset and they want to do this in a way that best suits their organizational culture. Retaining employees is a
  33. 33. difficult task. Providing support to the employees acts as a mantra for retraining them. Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. The management can support employees directly or indirectly. Directly, they provide support in terms of personal crises, managing stress and personal development. Management can support employees, indirectly, in a number of ways as follows: Manage employee turnover: Employee turnover affects the whole organization in terms of productivity. Managing the turnover, hence, becomes an important task. A proactive approach can be adopted to reduce attrition. Strategies should be framed in advance and implemented when the times arrives. Turnover costs should also be taken into consideration while framing these strategies. Become employer of choice: What makes a company an employer of choice? Is the benefit it offers or the compensation packages it gives away to its employees? Or is it measured in terms of how they value their employees or in terms of customer satisfaction? Becoming an employer of choice involves following a road map which tells where to go as a brand. Engage the new recruits: The newly hired employees are said to be least engaged in the organization. Keeping them engaged is an important task. The fresh talent should be utilized to maximum before they start feeling bored in the organization. Optimize employee engagement: An organization’s productivity is measured not in terms of employee satisfaction but by employee engagement. Employees are said to be engaged when they show a positive attitude toward the organization and express a commitment to remain with the organization. Employee satisfaction also comes with high engagement levels. So, organizations should aim to maximize the engagement among employees. Coaching and mentoring: Employees whose work performance suffers due to poor interpersonal relationships or because of lack of interpersonal skills should be provided proper coaching by their superiors. Planed coaching sessions help an individual to work through issues, maximize his potential and return to peak performance.
  34. 34. Feedback Feedback acts as a channel of communication between the employee and his manager. The amount of information employees receive about how well or how poorly they have performed is what we call feedback. It is a dialog between a manager and an employee which acts as a way of sharing information about the performance. It suggests where the employee performance is effective and where performance has to improve. Managers can provide either positive feedback or negative feedback to employees. This feedback helps the employee assess his performance and identify the improvement areas. Positive feedback communicates managerial satisfaction. Positive recognition for good performance boosts up morale of employees and results in performance improvement to a higher productivity level. It is believed that positive feedback is the only type of feedback that generates performance above the minimum acceptable level. Negative feedback obviously communicates manager’s dissatisfaction. However, negative feedback sometimes make employee to put more efforts to improve his performance. But such times are very rare. Moreover this improvement is short term. Some managers do not provide any kind of feedback to their employees. Due to no feedback, employees may assume that they are performing productively or they may feel that the manager is satisfied with their performance. Studies reveal the performance tends be same or even decreases if no feedback is provided. Thus, feedback is necessary because: • It builds trust and enhances communication between manager and employee. • It gives managers and employees a way to identify and discuss skills and strengths. • Positive feedback leads to employee retention and Retention. • It helps in identifying performance areas that need improvement and specific ways to improve them. It acts as an opportunity to enhance performance by identifying resources for skill development. It is an opportunity for managers and employees to assess and identify career and advancement opportunities. It helps employees to understand the effectiveness of their performance and contributes to their overall
  35. 35. knowledge about the work Managers have tendency to ignore good performances of their employees. Providing no feedback may demotivate employees and may lead to employee absenteeism. Input from manager’s side is necessary as it help employees to improve their performance and increase productivity. • Communication Between Employee and Employer Communication is a process in which a message is conveyed to the receiver by the sender. The message may be or may not be in a common format or language that both the sender and receiver understand. So there is a need to encode and decode the message in the process. Encoding and decoding also helps in the security of the message. The process of communication is incomplete without the feedback. Communication is the solution to almost everything in this world. Same applies to employee retention also. Straight-from-the-shoulder communication is what the employees need from their employers. Employees look for organizations where communication and process are transparent. Nothing is hidden and shared with the employees. There are 3 categories of employees: A: Who will leave their current employer in 3 years of their employment B: Who have a probability of leaving their current employer in next 3 years C: Who will stay with their current employer in the next 3 years Category A: These are the employees who lack communication with their employers. Category C: These are the employees who have proper, well structured communication with their employers. Communication is also the way to win the employees trust in the organization. Employees trust the employers who are friendly and open to them. This trust leads to employee loyalty and finally retention. Employers also feel that the immediate supervisors are the most authenticated and trusted source of information for them. So the organizations should hire managers who are active communicators. Communication mediums.
  36. 36. Open door policy: Organizations should support open door policies so that the employees feel comfortable and are able to express their doubts and feeling to their employers. Frequent meetings and Social gatherings Emails, Newsletters, Intranet and many more. So there should be effective communication across the organization and this communication should be two-way. Communication alone can lead to unimaginable heights of employee retention. Importance Of Employee Retention The process of employee retention will benefit an organization in the following ways: 1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of money to a company's expenses. While it is difficult to fully calculate the cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate. Loss of Company Knowledge: When an employee leaves, he takes with him valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized. Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss. Turnover leads to more turnovers: When an employee terminates, the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff. Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization.
  37. 37. Regaining efficiency: If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee What Makes Employee Leave? Employees do not leave an organization without any significant reason. There are certain circumstances that lead to their leaving the organization. The most common reasons can be: 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.
  38. 38. 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. Managing Employee Retention: The task of managing employees can be understood as a three stage process: 1. Identify cost of employee turnover. 2.Understand why employee leave. 3.Implement retention strategies The organizations should start with identifying the employee turnover rates within a particular time period and benchmark it with the competitor organizations. This will help in assessing the whether the employee retention rates are healthy in the company. Secondly, the cost of employee turnover can be calculated. According to a survey, on an average, attrition costs companies 18 months’ salary for each manager or professional who leaves, and 6 months’ pay for each hourly employee who leaves. This amounts to major organizational and financial stress, considering that one out of every three employees plans to leave his or her job in the next two years. Understand why employees leave : Why employees leave often puzzles top management. Exit interviews are an ideal way of recording and analyzing the factors that have led employees to leave the organization. They allow an organization to understand the reasons for leaving and underlying issues. However employees never provide appropriate response to the asked questions. So an impartial person should be appointed with whom the employees feel comfortable in expressing their opinions. Implement retention strategy : Once the causes of attrition are found, a strategy is to be implemented so as to reduce employee turnover. The most effective strategy is to adopt a holistic approach to dealing with attrition. An effective retention strategy will seek to ensure: Attraction and recruitment strategies enable selection of the ‘right’ candidate for
  39. 39. each role/organization New employees’ initial experiences of the organization are positive Appropriate development opportunities are available to employees, and that they are kept aware of their likely career path with the organization The organization’s reward strategy reflects the employee drivers How To Increase Employee Retention Companies have now realized the importance of retaining their quality workforce. Retaining quality performers contributes to productivity of the organization and increases morale among employees/ Four basic factors that play an important role in increasing employee retention include salary and remuneration, providing recognition, benefits and opportunities for individual growth. But are they really positively contributing to the retention rates of a company? Basic salary, these days, hardly reduces turnover. Today, employees look beyond the money factor. Retention Bonus Higher attrition rates within a particular industry have forced companies to use some innovative strategies to retain employees. Retention Bonus is one of the important tools that are being used to retain employees. Retention bonus is an incentive paid to an employee to retain them through a critical business cycle. Retention bonuses are becoming more common in the corporate world because companies are going through more transitions like mergers and acquisitions. They need to give key people an attractive incentive to stay on through these transitions to ensure productivity. Retention bonuses have proven to be a useful tool in persuading employees to stay. A retention bonus plan is not a panacea. According to a survey, non management employees generally receive about 10 percent of their annual salaries in bonuses, while management and top-level supervisors earn an additional 50 percent of their annual salaries. While bonuses based on salary percentages are the generally used, some companies choose to pay a flat figure. In some companies, bonuses range from 25 percent to 50 percent of annual salary, depending on position, tenure and other factors. Employees are chosen for retention bonuses based on their contributions to management and the generation of revenue. Retention bonuses are generally vary from position to position and are paid in one lump sum at the time of termination. However, some companies pay in instalments as on when the business cycle completes. A retention period can run somewhere between six months to three years. It can also run for a particular project. A project has its own life span. As long as the project gets completed, the employees who
  40. 40. have worked hard on it are entitled to receive the retention bonus. For example, the implementation of a system may take 18 months, so a retention bonus will be offered after 20 months. Although retention bonuses are becoming more common everywhere, some industries are more likely than others to offer them. Retail/wholesale companies are the most appropriate to implement stay-pay bonuses, followed by financial service providers and manufacturing firms. Companies of all sizes use retention bonus plans to keep knowledge employees retained in the company. To retain its key senior employees post merger with EDS Corporation, Mphasis is providing cash component based retention bonus plan for its employees. This is mainly to retain good employees and provide them a cash incentive to keep them motivated. Hire Right Talent employee retention starts with recruitment. Early departures arise from the wrong recruitment process. Here are a few ways to ensure how to hire the right talent for a particular job. Hire appropriate· candidates. Hire candidates who are actually suitable for the job. For this the employer should understand the job requirements clearly. Don’t hire under qualified or clearly overqualified candidates. Provide realistic job preview at the time of hiring: Mostly employees leave an organization because they are given the real picture of their job responsibilities at the time of joining. Attrition rate can be reduced if a right person is hired for a right job. Realistic preview of the job responsibilities can be given to the employment seekers by various methods like discussions, trial periods, internships etc. Clearly discuss what is expected from the employee: Before joining the organization, tell the candidate what is expected from him. Setting wrong expectations or hiding expectations will result in early leaving of employees. Discuss what the expectations of the employees are: Ask employees what they expect from the organization. Be realistic. If their requirements can be fulfilled only then promise them. Or tell them beforehand that their requirements cannot be fulfilled.
  41. 41. Don’t show them an unrealistic picture Culture fit: Try to judge individual’s capability to adapt to the organization’s culture. A drastic change in the culture may give a culture shock to the candidate. Referrals: According to· the research, referred candidates stay longer with the organization. There is a fear of hampering the image and reputation of the person who referred the candidate. Manager Role in Retention When asked about why employees leave, low salary comes out to be a common excuse. However, research has shown that people join companies, but leave because of what their managers’ do or don’t do. It is seen that managers who respect and value employees’ competency, pay attention to their aspirations, assure challenging work, value the quality of work life and provided chances for learning have loyal and engaged employees. Therefore, managers and team leaders play an active and vital role in employee retention. Managers and team leaders can reduce the attrition levels considerably by creating a motivating team culture and improving the relationships with team members. This can be done in a following way: Creating a Motivating Environment: Team leaders who create motivating environments are likely to keep their team members together for a longer period of time. Retention does not necessarily have to come through fun events such as parties, celebrations, team outings etc. They can also come through serious events. e.g. arranging a talk by the VP of Quality on career opportunities in the field of quality. Employees who look forward to these events and are likely to remain more engaged. Standing up for the Team: Team leaders are closest to their team members. While they need to ensure smooth functioning of their teams by implementing management decisions, they also need to educate their managers about the realities on the ground. When agents see the team leader standing up for them, they will have one more reason to stay in the team. Providing coaching: Everyone wants to be successful in his or her current job.
  42. 42. However, not everyone knows how. Therefore, one of the key responsibilities will be providing coaching that is intended to improve the performance of employees. Managers often tend to escape this role by just coaching their employees. However, coaching is followed by monitoring performance and providing feedback on the same. Delegation: Many team leaders and managers feel that they are the only people who can do a particular task or job. Therefore, they do not delegate their jobs as much as they should. Delegation is a great way to develop competencies. Extra Responsibility: Giving extra responsibility to employees is another way to get them engaged with the company. However, just giving the extra responsibility does not help. The manager must spend good time teaching the employees of how to manage responsibilities given to them so that they don’t feel over burdened. Focus on future career: Employees are always concerned about their future career. A manager should focus on showing employees his career ladder. If an employee sees that his current job offers a path towards their future career aspirations, then they are likely to stay longer in the company. Therefore, managers should play the role of career counsellors as well. How to Improve Employee Retention? People want to enjoy their work so make work fun and enjoyable. Understand that employees need to balance life and work so offer flexible starting times and core hours. Provide 360 feedback surveys and other questionnaires to foster open communication. Consider allowing anonymous surveys occasionally so employees will be more honest and candid with their opinions. Provide opportunities within the company for career progression and cross-training. Offer attractive, competitive benefits . Organizations should target job applications for employees who have characteristics that fit well with the organizational culture. Upon conducting an interview, seek out traits, such as loyalty. Also, ask the potential employee what motivates them on the job. Having more information about the potential employee’s expectations can help retain them, should they get hired into the company.
  43. 43. Rewards and Recognition Employees want to be recognized for a job well done. Rewards and recognition respond to this need by validating performance and motivating employees toward continuous improvement. Rewarding and recognizing people for performance not only affects the person being recognized, but others in the organization as well. Through a rewards program, the entire organization can experience the commitment to excellence. When the reward system is credible, rewards are meaningful; however, if the reward system is broken, the opposite effect will occur. Employees may feel that their performance is unrecognized and not valued, or that others in the organization are rewarded for the wrong behaviours. Unrecognized and no valued performance can contribute to turnover. Recognition for a job well done fills the employees' need to receive positive, honest feedback for their efforts. Need for Rewards and Recognition Recognition should be part of the organization's culture because it contributes to both employee satisfaction and retention. Organizations can avoid employee turnover by rewarding top performers. Rewards are one of the keys to avoiding turnover, especially if they are immediate, appropriate, and personal. A Harvard University study concluded that organizations can avoid the disruption caused by employee turnover by avoiding hiring mistakes and selecting and retaining top performers. One of the keys to avoiding turnover is to make rewards count. Rewards are to be immediate, appropriate, and personal. Organizations may want to evaluate whether getting a bonus at the end of the year is more or less rewarding than getting smaller, more frequent payouts. Additionally, a personal note may mean more than a generic company award. Employees should be asked for input on their most desirable form of recognition. Use what employees say when it comes time to reward for performance. Designing a Rewards and and Recognition Solution In designing a rewards and recognition program, the following guidelines should be considered. • Rewards should be visible to all members of the organization.
  44. 44. • Rewards should be based on well-defined, credible standards that have been developed using observable achievements. • Rewards should have meaning and value for the recipient. • Rewards can be based on an event (achieving a designated goal) or based on a time frame (performing well over a specific time period). • Rewards that are spontaneous (sometimes called on-the-spot awards) are also highly motivating and should also use a set criteria and standard to maintain credibility and meaning. • Rewards should be achievable and not out of reach by employees. • Nonmonetary rewards, if used, should be valued by the individual. For example, an avid camper might be given a 10-day pass to a campsite, or, if an individual enjoys physical activity, that employee might be given a spa membership. The nonmonetary rewards are best received when they are thoughtfully prepared and of highest quality. Professionalism in presenting the reward is also interpreted as worthwhile recognition. Rewards should be appropriate to the level of accomplishment received. A cash award of $50 would be inappropriate for someone who just recommended a process that saved the organization a million dollars. Determining the amount of money given is a delicate matter of organizational debate in which organizational history, financial parameters, and desired results are all factors. Recognition for a job well done can be just as valued and appreciated as monetary awards. Formal recognition program can be used with success. First Data Resources, a data processing services company that employees more than 6,000 individuals in Omaha, Nebraska, uses a formal recognition program (Adams, Mahaffey, and Rick,2002). Rewards are given on a monthly, quarterly, and yearly basis, and range from Nebraska football tickets, gift certificates, pens, plaques, mugs, and other items. One of the most popular awards at First Data is called the "Fat Cat Award" that consists of: $500 gift check Professional portrait of the employee • Appreciation letter from the CEO and senior management • E-mails, phone calls, and notes from peers
  45. 45. In addition to nonmonetary rewards, employees can be rewarded using money in numerous ways. Cash is a welcome motivator and reward for improving performance, whether at formal meetings or on the spot. Variable bonuses linked to performance are another popular reward strategy. Profit sharing and pay-for-skills are monetary bonus plans that both motivate individuals and improve goal achievement. Small acts of recognition are valuable for employee daily Retention. Sometimes a personal note may mean more than a generic company award. In one survey, employees cited the following as meaningful rewards (Moss, 2000): • Employee of the month awards Years of service awards • Bonus pay (above and beyond overtime) for weekend work • Invitations for technicians to technical shows and other industry events • Meaningful and Retention Rewards What gives meaning to rewards and recognition? What makes them effective? First, rewards and recognition should be based on a clear set of standards, with performance verifiable or observable. The standards for the reward should also be achievable. If the reward is based on an unachievable result, such as a production goal that is beyond employees' power, then those employees will not be motivated. Meaningful rewards and recognition that are achievable have the greatest impact. Case Studies 1.Employee Retention Best Practices in Keeping and Motivating Employees By LisBeth Claus Ask any CEO of an organization, “What keeps you awake at night?” and you will get a response that relates to people management issues. a main concern for any organization (whether small or large; private, public or nonprofit) is its capacity to attract, engage, and retain the right people. The problem of retention is compounded by the predicted talent shortage resulting from the upcoming retirement of the baby boomers, the scarcity of talent with relevant work skills for today’s jobs, the changing values about work and the high cost of turnover. Research and human resource practices provide us with a number of recommendations to increase employee retention.
  46. 46. 2.How Auditing Company X Works with Retaining Valuable Employees : Swedish Case study University essay from Hogskolan i Jonkoping/IHH, EMM (Entrepreneurskap, Marknadsforing, Management) Author: Josip Bogic; Elina Armanto; Maja Cassel; [2008] Abstract: Today, neither employees nor employers seem to take for granted that a person will stay with the same firm until retirement. Yet, keeping employees for longer periods is an imp-ortant challenge for firms. One industry where retention is interesting is the auditing industry in Sweden, this because certain requirements are needed to become an auditor. Firstly, the employee needs to have a Swedish university degree, including specific courses within au-diting/accounting. Furthermore, the person needs practical experience for a specific period of time. Due to these statements the challenge of retaining and motivating valuable employees is crucial for the auditing firms, which is why we have chosen to do a case study at Auditing Company X to see how they work with employee retention. We have compared the findings to our chosen theory, which consist of four categories: the hiring process, in-ternal labor market and career, motivation and performance, and finally culture and leader-ship. These four categories are initially based on Leigh Branham?s book: ? Keeping the people who keep you in business: 24 ways to hang on to your most valuable talent? (Bran-ham, 2001). In our conducted case study, at Auditing Company X, we have been able to conclude that the firm’s retention practices are to a great extend in line with the theoretical framework. There are some areas that need further attention from the company, such as an individualized reward system and communication between managers and employees. Even though there are some parts to work on the most important aspects of retention, such as having a holistic and long-term orientation, Auditing Company X seems to have incorporated this into their practices successfully. 3.Retention: An explanatory study of Swedish employees in the financial sector regarding leadership style, remuneration and elements towards job satisfaction University essay from Vaxjo universitet/Ekonomihogskolan Author: Sanna Paulsson; Linda Lindgren; [2008]
  47. 47. Abstract: Introduction: Companies today are forced to function in a world full of change and complexity, and it is more important than ever to have the right employees in order to survive the surrounding competition. It is a fact that a too high turnover rate affects companies in a negative way and retention strategies should therefore be high on the agenda. When looking at this problem area we found that there may be actions and tools that companies could use to come to terms with this problem. Research told us that leadership, remuneration and elements like participation, feedback, autonomy, fairness, responsibility, development and work-atmosphere is important for job satisfaction and retention. Object: The main objective is to increase the understanding regarding employee’s retention in relation to leadership style, remuneration and elements such as participation, feedback, autonomy, fairness, responsibility, development and work atmosphere in the Swedish financial Sector Method: We wanted to investigate how employee of the Swedish financial sector prefers to be retained, and how they consider and react to the chosen areas. The survey has a quantitative approach with a web based questionnaire and includes 129 respondents from banks, insurance and finance companies. The theoretical framework includes leadership and leadership style, financial as well as non- financial remuneration and research done in later years regarding participation, feedback, autonomy, fairness, responsibility, development and work-atmosphere connected to retention. Conclusion: The result shows that regarding leadership the respondents prefer leadership based on relations were they feel appreciation. Both appreciations from the closest manager as well as the company management influences employee job satisfaction in a positive way. More money was the most common reason for wanting to change jobs, and when asking how the remuneration system should be designed, base pay with additional bonus and benefits were preferred. But also non financial factors such as participation, feedback, autonomy, fairness, responsibility, development and work-atmosphere must be taken in consideration to satisfy since they seem to increase employees? Willingness to stay in the company.
  48. 48. 4.What leaders can do to keep their key employees - Retention Management University essay from Goteborgs universitet/Foretagsekonomiska institutionen Author: Lisa Hedberg; Maria Helnius; [2007-09-03T08:22:31Z] Abstract: Background: retention management is a highly topical subject and an important dilemma many organizations might face in the future, if not facing it already. We believe that the leader plays a key role in employee retention and retention management. The concept of retention management can both have a narrow, and a broader significance. Both parts of its significance are generally included in this thesis. The background of the thesis present a few articles that discuss issues that makes it important for the organization, and the leaders, to work hard with retention management. The research is based on the leaders in the Finnish case company Tradeka. Following key questions are intended to be answered: What are the consequences between leaders actions and employees retention? Which is the leader’s role when it comes to retaining employees? Purpose statement: The purpose of the thesis is to investigate and analyze how company leaders today can retain their key employees. How can the provision of key human resources develop a long-term relationship that makes top employees stay in the company? The study aims to establish the procedure leaders apply to retain employees. The purpose is to compare the qualitative study, made at the case company, with findings from the thesis theoretical framework. Research method: The study is a qualitative, as well as a theoretical study where empirical findings and theories has been compared. The intention of investigating and using the Finnish company Tradeka Limited as a case company, is to make the information from the theories more valid, and also the interest in how retention management works in practice. Eleven qualitative interviews were conducted at Tradeka? financial department, both with supervisors and employees to get a broader view at the phenomenon retention management. Result: Leaders and their skill in creating a culture of retention, has becoming a key in why people stay and what usually
  49. 49. drives them away from a company. The leader has become the main factor in what motivates people’s decision to stay or leave. For organizations to keep its key employees their number one priority should be to look at their management, because people leave managers and not companies. Characteristics in a leader that are of importance, as the leader plays a key role in retention management is: trust builder, esteem builder, communicator, talent developer and coach, and talent finder. The leader’s relation to the employees plays a central role in retaining employees, because employees need to feel involvement, and that their presence count. When retention is a core value, good things happen for customers, employees, and the company. because employees need to feel involvement, and that their presence count. When retention is a core value, good things happen for customers, employees, and the company. FINDINGS ・ It is found out that, 40% of respondents are aware of HR Policies and 60 % of respondents are not aware of HR Policies. ・ It is found out that, 76% of respondents are getting right amount of accurate information at right time and 24% of respondents are not getting right amount of accurate information at right time. ・ It is found out that, 82% of respondents are able to meet superior’s expectation and 18% respondents are not able to meet superior’s expectation. ・ It is found out that,57% of respondents feels that there pay is on par with compare to employee’s handling similar responsibilities, and 39% of respondents feels that there pay is less with compare to employee’s handling similar responsibilities. ・ It is found out that, 70% of respondents are satisfied with hygiene and cleanliness of company infrastructure and 30% of respondents are not satisfied with hygiene and cleanliness of company infrastructure. ・ It is found out that, 40% of respondents are satisfied with Availability of system, storage facilities of company and 60% of respondents are not satisfied with Availability of system, storage facilities of company.
  50. 50. ・ It is found out that, 78% of respondents skills are recognized by superiors and 22% of respondents skills are not recognized by superiors. ・ It is found out that, 74% of respondents feel that superiors are taking efforts to motivate them and 26% of respondents feel that superiors are not taking efforts to motivate them. ・ It is found out that, 83% of respondents feel that workload is manageable and 10% of respondents feel that workload is very hard to manage. ・ It is found out that,55% of respondents feels that the field worker are able to get updates on internal activities, and 45% of respondents feels that the field worker are not able to get updates on internal activities. ・ It is found out that, 89% of respondents feel that the superiors are easily accessible and 11% of respondents feel that the superiors are not easily accessible. ・ It is found out that, 51% of respondents feel that their complaints are resolved quickly and 49% of respondents feel that their complaints are not resolved quickly. ・ From weighted Average analysis it is found that most of the respondents are satisfied with the working hours of the organization ・ From weighted Average analysis it is found that roles & responsibilities are clearly defined by the Reporting heads. ・ From weighted Average analysis it is found that employees feel that their superior's commitment towards job is good. ・ From weighted Average analysis it is found that respondents feel that training and orientation programs are neither good nor bad. ・ From weighted Average analysis it is found that most of the respondents are satisfied with job. ・ From chi-square it is found that there is a significant relationship between Work Culture of the Company and interpersonal relationship between employees. ・ From chi-square it is found that there is a no significant relationship between overall satisfaction and Commitment towards Company. ・ From chi-square it is found that there is a significant relationship between overall satisfaction and aspects of job. ・ From Kendall’s coefficient of concordance it is found that there is a significant difference in the rank assigned by respondents towards the attributes that gives them satisfaction in the company. ・ From One Run Test it is found that the samples are taken randomly.
  51. 51. SUGGESTIONS • Employee should be provided with proper training. • Employee should be appreciated for good work. • Employee should be motivated to welcome the change. • If any changes are brought in to software or any module is added then proper • training should be given. Conclusion Retention is an important concept that has been receiving considerable attention from academicians, researchers and practicing HR managers. In its essence, Retention comprises important elements such as the need or content, search and choice of strategies, goal-directed behaviour, social comparison of rewards reinforcement, and performance-satisfaction. The increasing attention paid towards Retention is justified because of several reasons. Motivated employees come out with new ways of doing jobs. They are quality oriented. They are more productive. Any technology needs motivated employees to adopt it successfully. Several approaches to Retention are available. Early theories are too simplistic in their approach towards Retention. For example, advocates of scientific Management believe that money is the motivating factor. The Human Relations Movement posits that social contacts will motivate workers. Mere knowledge about the theories of Retention will not help manage their subordinates. They need to have certain techniques that help them change the behavior of employees.One such technique is reward. Reward, particularly money, is a motivator according to need-based and process theories of Retention. For the behavioral scientists, however, money is not important as a motivator. Whatever may be the
  52. 52. arguments, it can be stated that money can influence some people in certain circumstance. Being an outgrowth of Herzberg’s, two factor theory of Retention, job enrichment is considered to be a powerful motivator. An enriched job has added responsibilities. The makes the job interesting and rewarding. Job enlargement refers to adding a few more task elements horizontally. Task variety helps motivate job holders. Job rotation involves shifting an incumbent from one job to another. Recommendations 1. Develop an attractive employee value proposition. An employee value proposition means that your company has something attractive to offer that is perceived as valuable to an employee. as an employer, you must understand what makes your organization attractive to potential recruits and current employees. Branding yourself as an employer of choice is not just a slick set of marketing tactics. The best advocates for an employer’s brand are its current employees. What messages do they send to others about their employer? Are they honestly saying and believing that, “This is a great place to work.” 2. Create a total reward structure that includes more than compensation. Every company should have all the normal compensation mechanisms common to their type of employment. yet, total rewards packages go far beyond money. While money might temporarily retain employees, it does not always equate with engagement. People want a chance to make a difference and realize themselves. That self-realization is multi-dimensional and different for each employee. The total reward structure should include, in addition to compensation, support for employees to attain their personal objectives aligned with the goals of their organization. 3. Give feedback on employee performance on a regular basis. Most managers and employees are not enamored with the performance appraisal process in their organization. yet, an effective performance management process serves many purposes. Ongoing performance feedback allows employees to better know where they stand, gives them a formal means to provide input, indicates that their managers
  53. 53. pay attention to them and that their performance matters. This feedback contributes to employee engagement and retention. 4. Be flexible in terms of work-life balance. Workers more and more value a balance between work and life. They want more flexible ways to engage with their employer. To attract and retain workers with different work and career expectations, organizations have to be more flexible in structuring work and its expectations. It calls for a different managerial mindset and practices that involve letting go of old ways of controlling workers’ time and attendance in favor of result criteria such as output, productivity and quality. 5. Create a culture of engagement. Employees have become more connected with others in the organization (and the broader supply-and-customer chain) through project-based team work and process management activities. Employees are shifting their loyalty to people, teams and projects and away from company loyalty. It is organizations that create the culture and climate that allow people, processes and projects to become fully connected and engaged with one another. Engaged employees are more likely to stay with their employer. 6. Train managers to be effective. Exit interviews consistently show that “poor and bad” management practices greatly contribute to an employee’s decision to leave a company. It is imperative to provide supervisors and managers with adequate tools to become effective managers since we cannot assume that these competencies are innate. Professor Patrick Connor, recently retired after teaching 25 years at the atkinson Graduate school of Management, is famous among MBA students and alumni for his ‘Connorisms.’He told them, “your employees do not work for you, they work for themselves.” When I teach my students about managing organizations, I have them reflect on what really matters to employees and what they are constantly asking of their managers and their organizations. In the end, what employees expect of their managers is fairly simple: Can I trust you? are you committed to excellence? Do you care about me? What people constantly ask of their organization is: Do you tell the truth? Do you keep promises? Do you act fairly? Do you respect me? Managers and organizations that keep these questions in mind will have a competitive advantage over others in retaining their employees.
  54. 54. BIBLIOGRAPHY BOOKS ・ Human Resource Management C.B.Memoria ・ Research methodology C.R.Kothari ・ Journals, Newspaper and Internet For more Notes, Presentations, Project Reports visit • a2zmba.blogspot.com • hrmba.blogspot.com • mbafin.blogspot.com • HDFCbank.com

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