Employee Retention Final
-
Upload
ved-prakash -
Category
Documents
-
view
223 -
download
1
Transcript of Employee Retention Final
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 1/85
Employee Retention
Employee Retention
A Project report submitted in partial fulfillment
of the requirement for the award of the degree
of
‘Bachelors of Management Studies’
Mumbai University
Submitted by:
VARUN.A.CHHIBBER
Roll no. 7720
SEMESTER: V
Parle Tilak Vidyalaya Association’s
Mulund College of Commerce
2005 – 2006University of Mumbai
1
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 2/85
Employee Retention
Declaration
I, Varun.A.Chhibber, a student of Mulund College of Commerce
T.Y.BMS (semester Vth) herby declare that I have completed this project
on “Employee Retention” in the academic year 2005-2006. The
information submitted is true and original to the best of my knowledge
Signature of student
(Varun.A.Chhibber)
2
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 3/85
Employee Retention
Certificate
I MISS.ROOPALI.MANDLEKAR hereby certify that
Varun.A.Chhibber a student of Mulund College of Commerce
TYBMS (Semester 5) has completed the project titled Employee
Retention in the academic year 2005-2006. The information
submitted is true and original to the best of knowledge
Signature of the Project Signature of Principal of
the
Coordinator College/Institution
Signature of the Examiner
3
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 4/85
Employee Retention
Acknowledgement
I take this opportunity with great pleasure to present before you
this project on “Employee Retention” which is a result of
cooperation, hard work and good wishes of many people. I would like
to thank my with deep sense my project guide & BMS
Coordinator Miss.Roopali Mandlekar for her kind
appreciation, friendly guidance, constant encouragement, involvement
in my project work and for her valued guidance throughout my study.
I owe the debt to our Principal Mr. D.G Deshpande for
giving me an opportunity to present a creative outcome in form of a
project.
I express my sincere thanks to the library staff who have provided me
right information and study material at the right time. No words can
adequately express my debt of gratitude to all my BMS friends for their
continuous support while the work was in process. I must also put on
record my gratitude to my Institute Mulund College of Commerce for all
that I learnt as a student. I also wish to thank my Family Members
whose efforts and creativity helped me in giving the final structure to
the project.
Lastly needless to say I am also thankful to all those seen and
unseen hands and minds, which have been of direct or indirect, help in
the completion of my project.
4
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 5/85
Employee Retention
Executive Summary
The project begins with the significance of Human Resource
Management in today’s corporate world. It signifies the increasing
importance of HRM.
Then it leads over to the employee turn over problem faced by the
companies. It highlights the resource for the high turnover rate and the
cost that this act adds up to the company.
Then the project highlights the significance of employee retention to
overcome the employee turnover problem.
The project briefly covers the various areas where employee retention
strategies are implemented namely recruitment, training and
development, work culture, salary negotiation, compensation
management, rewards and recognition and exit interviews.
And at the end the report finally highlights various aspects which are
to be considered for improvement of employee retention strategies.
5
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 6/85
Employee Retention
Objective of Study
1) To know the importance attached to employee retention in
today’s corporate world.
2) Strategies employed by the company to improvise on the rate of
employee turnover rates.
3) General problems faced by the companies while practicing
employee retention.
6
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 7/85
Employee Retention
Scope of study
This project has been prepared with an intention to make one realize
and understand the significance of employee retention.
Employee retention has become a major goal of the organization.
Initially recruitment was only talked about, but now in today’s
corporate world, recruitment has become just a part of HRM. Major
importance is attached to employee retention.
This project not only aims to present the theoretical aspects, but thepractical aspects as well. A survey has been done to understand the
strategies followed by various organizations to ensure Employee
Retention.
7
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 8/85
Employee Retention
Methodology
The information provided in this project has been collected from
various sources. These include major information’s downloaded from
various articles through the Internet. And the matter was also acquired
from the book “Human Resource and Personal Management- 3 edition”
written by K. Aswathappa.
The information collected has been diluted and presented in a very
simple and lucid manner. This was done with an objective that even alayman should be able to understand the topics that I have dealt with.
8
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 9/85
Employee Retention
Index
Sr.No Contents Page
No
1. Introduction
2. Significance of HRM in Corporate World
3. Employee Turnover a) Measuring Employee Turnover
b) Why do People Leave Organizations???
c) When does Employee Turnover Become
Problematic???
4. Employee Retention
5. Recruitment, Selection & Induction
6. Remuneration Negotiation7. Work Environment
8. Significance of Training & Development
9. Performance Appraisal
10. Compensation Management & Reward
11. Exit Interviews
12. Questionnaire
13. Analysis of Survey14. Managing IT Retention & Turnover
15. Employee Retention Problems faced by
Call Centers
16. Retention Stratagem
9
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 10/85
Employee Retention
17. Conclusion
18. Bibliography & Webliography
Introduction
Employee Retention
Employee retention is not a question or debate but rather it’s the
most important thing for any concern if its serious in long term
business.
What’s a business without people and how is it going to work if the
required people aren’t there. The only and most important resource for
any company is its people. Some people might have this
misconception that this resource is less important than the other
resources like money, materials and machinery. But we have all
learned from all successful companies around the world that theirsuccess was and is due the most important M of all the other M’s and
that’s the manpower.
Well if we all know that people are the most important resource
then why do we have this question that is Employee Retention required
or not. I guess this question arised all around the world because of a
very high figure of employee turnover.
So if we are able to stop this or at least know the answer to why
there is such a high employee turnout we would know what it takes to
retain the required people. I would like to put a lot of stress in the word
required. This word needs to be understood by lot of people and
10
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 11/85
Employee Retention
especially the people in the top management believe who believe that
there is not much difference in manpower requirement and material
requirement and the irony is that in the later case, more emphasis is
given to details & specifications. The reason I think why they are very
particular about material specifications is because they can calculate
the losses if they do not get the required material.
Unfortunately and sadly they are unable to figure out the deep
negative impact if they do not get the required people.
So how do we specify the required people? I think we can start
with answering a few questions. What is the minimum desired output?
Is it long term or short term? Are we capable of meeting his
expectations or rather that his takeaway is above or below market
rates? Are we ready to spend time and energy in grooming him and
including him in the family? Yes, I believe that the employees of a
company are like a family and it would benefit a lot of companies if
they too agree. And the most important of all that, are we willing to be
transparent enough for him to understand the company and its people.
Are we willing to share with him the companies’ clear vision and
mission and the long-term company strategies.
With the answers to the above questions we would be in a
position to specify the required people to the HR dept. And with the
present tremendous gap between demand and supply the HR dept.
would not find it very difficult to find the required and right person.
Well that’s assuming that the HR dept. is competent enough to match
the candidate’s long term career aspirations to the companies’
requirement. Well that can be a very tricky and difficult thing for the
HR dept. But we all know that the HR depts. are trained and equipped
with lot of tools to know the career aspirations of a candidate.
11
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 12/85
Employee Retention
Now that we have the right and required person there is no
doubt that we need to retain him. We need to know our Organization
and the type it belongs to.
There are three types of organizations
The Organizations that:
• Change by themselves
• Change, when told by others
• Do not change even when told by others.
The excellent organizations belong to the category of ‘change by
themselves”.
They have a clear vision of where they want to be in future & all their
actions are aimed towards it.
They govern their own future and not are merely victims of
circumstances.
Also these Organizations are low profile, have a unified theory
about transformation and are holistic in approach. They focus on
strengthening fundamentals and mobilize the entire organization with
people aligned.
These Organizations have their concepts right regarding people
development. These Organizations encourage People to accept
ownership and responsibility to solve problems. In these organizations
people are empowered to act and openly share knowledge and
experience.
12
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 13/85
Employee Retention
General Electric(GE) is one of the finest examples
worldwide and back home we have the much talked about
Infosys & Wipro
Significance of Human Resource
Management in Corporate World
HR has always been seen as the “cost centre” of an organization.
However studies reveal that in today’s business world, HR practices
does churn revenues. It’s all about how you invest in your human
capital.
Studies suggest that not only is Human resource the most valued
asset of a company, but there also proof that investing in HR does
produce returns.
“Employee-involvement practices such as information sharing, skills
training rewards programs, and empowerment efforts -- all of which fall
squarely into Hr’s domain -- show a significant bottom-line return”.
Companies who have followed the employee-involvement practices
have produced a 13 percent higher return on equity.
Thus it’s obvious that employees form an integral part. How do
you select and retain talented people? How can you create an
environment, which helps people thrive at work? Many such questions
form an integral part of a company’s HR policy. Increased global
competitiveness has given way to uncertainty, which is impacting the
environment within an organization. This is where the role of a HR
manager is becoming even more crucial.
13
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 14/85
Employee Retention
Traditionally the HR department has played dual roles—an
operational function (such as recruitment, personnel and performance
management, employee relations and statutory compliance’s) and a
human developmental role (comprising people development, culture
and organization building). Both these functions have always been
considered “soft” roles.
Today the equation has changed. The HR department plays a key role
in the company’s overall business strategy. HR managers have a clear
understanding of the business, the organization, its vision, mission,
values and are given ample freedom to bring processes in place to get
people aligned to these values and goals.
The focus of HR today is to create an agile organization, which can
innovate rapidly and exceed client expectations constantly, rather than
just managing people.
The basic trait required in an efficient HR manager is his ability
to gauge the strengths of his employees and put them to best use. Be
a supportive manager and create an environment where employees
feel assured that they can fall back for support in difficult situations.
He should be able to delegate responsibility, while always retaining the
accountability. Lastly, personal touch plays an important factor for
creating a sense of belonging with the company. The person should be
very effective at understanding people, their skill sets and emotional
intelligence which will help in goal setting and finally achieving the
desired results.
Some key points to remember
14
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 15/85
Employee Retention
The organization has to ensure that communication is timely and open
to retain employee trust. This also means that there is continuous
feedback from employees, which helps in better productivity.
There has to be a common theme built relating to vision, participation,
control, measurement of work processes, communication and
commitment. Experts point out that if you create an environment
where people truly participate. You don’t need control. The employees
do what needs to be done.
Employee Turnover
Measuring employee turnover
Most organizations simply track their crude turnover rates on a month
by month or year by year basis. The formula is simply:
Total number of leavers over period x 100
Average total number employed over period
The total figure includes all leavers, even people who left involuntarily
due to dismissal, redundancy or retirement. It also makes no
distinction between functional (i.e.-beneficial) turnover and that, whichis dysfunctional.
Crude turnover figures are used by all the major surveys of employee
turnover. So they are necessary for effective benchmarking purposes.
However, it is also useful to calculate a separate figure for voluntary
turnover and to consider some of the more complex employee
15
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 16/85
Employee Retention
turnover indices, which take account of characteristics such as
seniority and experience.
Costing employee turnover
Estimating the cost of employee turnover is a useful starting
point when seeking to persuade line managers and Finance Directors
that money needs to be invested in order to improve retention rates.
At present surprisingly few (7%) HR departments calculate the costs of
turnover.
It is possible to compute a ‘not less than’ figure very easily by
working out what it costs on average to replace a leaver with a new
starter in each of the major employment categories. This figure can
then be multiplied by the crude turnover rate for that staff group to
calculate the total annual cost of turnover.
The major categories of costs to take account of are:
• Administration of the resignation
• Recruitment costs
• Selection costs
• Cost of covering during the period in which there is a vacancy
• Administration of the recruitment and selection process
• Induction training for the new employee.
16
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 17/85
Employee Retention
Many of these costs consist of management or administrative staff’s
time (opportunity costs) but direct costs can also be substantial where
advertisements, agencies or assessment centers are used in the
recruitment process.
More complex approaches to turnover costing give a more accurate
and invariably higher estimate of total costs. A widely quoted method
involves estimating the relative productivity of new employees during
their first week’s or months in a role and that of resigns during the
period that they are working their notice
Why Do People Leave Organizations?
Employees resign for many different reasons.
• Sometimes it is the attraction of a new job or
• The prospect of a period outside the workforce which ‘pulls’
them, on other occasions they are ‘pushed’ due to
dissatisfaction in their present jobs to seek alternative
employment.
• Sometimes it is mixtures of both pull and push factors.
• For a fourth group reasons for leaving are entirely explained by
domestic circumstances outside the control of any employer, as
is the case when someone relocates with their spouse or partner.
Recent research strongly suggests that push factors are a great
deal more significant in most resignations than most managersappreciate. It is relatively rare for people to leave jobs in which they
are happy, even when offered higher pay elsewhere. Most staff has a
preference for stability.
17
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 18/85
Employee Retention
It is important to appreciate that the reason people give for their
resignations are frequently untrue or only partially true. The use of exit
interviews is widespread yet they are notoriously unreliable,
particularly when conducted by someone who may later be asked to
write a reference for the departing employee. They are reluctant to
voice criticism of their managers, colleagues or the organization
generally, preferring to give some less contentious reason for their
departure.
Recent research highlights the importance of front line managers
and how their behaviour relates directly to the levels of commitment,
motivation and satisfaction reported by employees.
A poor relationship with a line manger can be an important reason for
individuals leaving their organization, but its significance can be
masked as a result of the difficulties associated with exit interviews
mentioned above. A lack of training and developmental opportunities is
also major reason voluntary turnover. On an average, 44% of
respondents cited ‘promotion outside the organization’ as a main
cause of labour turnover, 40°/o highlighted ‘change of career’ and 37%
‘lack of career of developmental opportunities.
Early leaving
In the high turnover industries in particular, a great deal of employee
turnover consists of people resigning or being dismissed in the first few
months employment. Research shows that during 2003, 2O% of
leavers left between 0 and 6 months’ service. Even when people stay
for a year or more is often the case that the decision to leave sooner
rather than later is effectively taken in the first weeks of employment.
18
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 19/85
Employee Retention
Poor recruitment and selection decisions, both on the part of the
employee and employer, are usually to blame, along with poorly
designed or non-existent induction programs.
Expectations are often raised too high during the recruitment
process leading people to compete for and subsequently to accept jobs
for which they are in truth unsuited. Organizations do this in order to
ensure that they fill their vacancies with sufficient numbers of well-
qualified people as quickly as possible. However, over the longer term
the practice is counter-productive as it leads to costly, avoidable
turnover and the development of a poor reputation in local labour
markets.
When Does Employee Turnover Become
Problematic?
There is no set level of employee turnover above which effects
on the employing organization becomes damaging. Everything
depends on the type of labour markets in which the company
competes. Where it is relatively easy to find and train new employees
quickly and at relatively little cost (i.e. where the labour market is
loose), it is possible to sustain high quality levels of service provision
despite having a high turnover rate. By contrast, where skills are
relatively scarce, where recruitment is costly or where it takes several
weeks to fill a vacancy, turnover is likely to be problematic from a
management point of view. This is especially true of situations in which
19
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 20/85
Employee Retention
you are losing staff to direct competitors or where customers have
developed relationships with individual employees as is the case in
many professional services organizations.
Some employee turnover positively benefits organizations. This
happens whenever a more effective employee replaces a poor
performer, and can happen when a senior retirement allows the
promotion or acquisition of welcome ‘fresh blood’. Moderate levels of
staff turnover can also help to reduce staff costs in organizations
where business levels are unpredictable month on month. In such
situations when business is slack it is straightforward to hold off filling
recently created vacancies for some weeks.
Employee Retention
20
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 21/85
Employee Retention
Retaining Top Talent in a Competitive Market Successful
Companies Develop Integrated Retention Programs to Keep
Top Talent from Leaving for the CompetitionWith business booming, it’s a sellers market for job seekers. For
company HR departments, retention of key employees is more
important than ever, as tempting offers from competitors seeking to
correct their own labour shortage increases the likelihood of key
employees heading out for greener pastures. So how can companies
keep employees happy and retention rates high?
Research says that top talents in organizations cannot beretained merely by high salary and a wealth of perks. They demand
more intangible benefits — stimulating work, flexible career options,
and a corporate culture which values their work. As experienced
consultants in the area of Talent Retention, we offer these basic pillars
of success for companies in any industry:
Employ competency-based recruiting to improve selection
effectiveness and increase employee retention.
The company should identify the following benefits of recruiting
candidates based on their competencies: improved accuracy in
selecting the best candidates, better person-job fit, reduced turnover,
lower hiring costs, higher levels of productivity and contribution.
Offer an attractive benefits package. Talented employees are highly marketable and almost always
have advanced degrees. While salary and benefits cannot substitute
for deficiencies in other areas, companies must also show their
appreciation for key employees contributions with substantial
compensation packages. Like health care benefits in the industry, an
21
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 22/85
Employee Retention
employee stock purchase plan, and one of the largest corporate-
sponsored day-care centers in the country.
Establish a corporate culture that emphasizes knowledge
sharing and employee feedback.
Employees value a workplace in which their input is encouraged
and appreciated. An open door policy encourages employees at all
levels to ask questions, contribute ideas and resolve issues. This
sharing atmosphere gives everyone a voice in creating the type of
corporate culture in which they would like to work.
Provide opportunities to explore different positions within the
company
Here employees participate in different types of activities within
their field of interest, new hires can explore their strengths and
interest areas before selecting a job that best suits them. The varietyof assignments also benefits new employees by giving them an
opportunity to learn more about the company’s diversity develop a
company contact network and demonstrate their research capabilities
to a variety of employees.
Leading companies look at talent retention as an integrated process,
not as isolated events.
Companies that recognize the importance of long-term, dedicated
employees begin the retention process during recruiting and embed
retention practices in career path and employee development and
processes.
22
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 23/85
Employee Retention
Today’s workers are no longer inclined to stay at one company for the
duration of their careers. The most talented professionals are more
likely to be courted by other businesses, and the effects of turnover
can be costly. The time and money it takes to recruit, rehire and retain
can quickly cut into a firm’s bottom line.
Hiring smart is the first step to developing a loyal, motivated
workforce and keeping turnover at a minimum. Other factors, such as
competitive compensation and creating an employee-friendly work
environment also play a role. A study commissioned by our firm among
executives at the nation’s 1000 largest companies found that, aside
from salary, job applicants inquire just as frequently about corporate
culture as they do other benefits. The implication is clear: The more
enriching your work environment, the more likely are to retain a staff
of satisfied, productive employees.
Improving employee retention
• Give prospective employees a ‘realistic job preview’ at the
recruitment stage. Take care not to raise expectations only to dash
them later.
• Make line managers accountable for staff turnover in their teams.
Reward managers whose record at keeping people is good by including
the subject in appraisals,
• Maximize opportunities for individual employees to develop their
skills and move on in their careers
• Ensure wherever possible that employees have a ‘voice through
consultative bodies, regular appraisals, and attitude surveys and
grievance systems.
23
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 24/85
Employee Retention
• Wherever possible accommodate individual preferences on working
hours. Be as flexible as possible in the allocation of shifts.
• Provide as much job security as possible. Employees who are made
to feel that their jobs are precarious may put a great deal of effort in to
impress
• Bend over backwards to ensure that you do not and are never seen
to discriminate against employees on any unfair grounds.
• Defend your organization against penetration by headhunters and
others seeking to poach your staff.
Recruitment, Selection & Induction
The human resources are the most important assets of an
organization. The success or failure of an organization is largely
dependent on the caliber of the people working therein. Without
positive and creative contributions from people, organizations cannot
progress and prosper. In order to achieve the goals or the activities of
an organization, therefore, they need to recruit people with requisite
skills, qualifications and experience. While doing so, they have to keep
the present as well as the future requirements of the organization in
mind.
Recruitment is distinct from Employment and Selection. Once the
required number and kind of human resources are determined, the
management has to find the places where the required human
resources are/will be available and also find the means of attracting
them towards the organization before selecting suitable candidates for
jobs. All this process is generally known as recruitment. Some people
24
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 25/85
Employee Retention
use the term “Recruitment” for employment. These two are not one
and the same. Recruitment is only one of the steps in the entire
employment process. Some others use the term recruitment for
selection. These are not the same either. Technically speaking, the
function of recruitment precedes the selection function and it includes
only finding, developing the sources of prospective employees and
attracting them to apply for jobs in an organization, whereas the
selection is the process of finding out the most suitable candidate to
the job out of the candidates attracted (i.e., recruited).
Recruiting Smart
Finding and recruiting good people can be a challenge for any
company Therefore, it’s crucial to have a recruiting strategy in place.
Why are some recruitment’s successful while others are disastrous
failures? The mount of time, effort and money spent in the hiring
process very often comes to naught because hiring managers make
25
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 26/85
Employee Retention
some inevitable mistakes. Yes, the recruitment process is more
complex than meets the eye, and it is this inability to understand the
subtle factors of the system that leads to hiring the wrong person,
which often becomes a calamitous situation for the company. Why is it
necessary for the recruitment process to be very focused? Finding out
whether the person is the “right fit” in the organization culturally is as
important as Testing his/her skill sets. Failure to identify the exact
company needs is one of the reasons that lead to wrong hiring. Adding
to this is the inability to test the exact skills of the candidate. At times
organizations hire out of desperation and consequently land up paying
the price of inducting a candidate who is not suitably qualified or
skilled to take care of the responsibilities. Blindly promoting from
within and hiring because a friend referred the candidate are the other
mistakes that are often repeated.
The CV of a person is in fact the most common blind spot as it
often exaggerates the truth and can be misleading in the selection
process. Furthermore, often it is the good communication skills of the
candidate that help him/her succeed in the interview without the
necessary domain knowledge or skill.
Rushed hiring can lead to overlooking of many factors. “One has to
check where The candidate comes from—from the perspective of
suitability to work in the new culture, which could be different from the
earlier organization: and from the perspective of ability to work in
teams, customer-facing skills, ability to work under pressure, etc,” Cost
effectiveness plays an important part too.
26
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 27/85
Employee Retention
Selection
Steps in Selection
The purpose of selection programme & technique is to choose
the most suitable candidate for a given job from among the
prospective employees. Selection procedures which employees
27
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 28/85
Employee Retention
systematic & scientific methods that are reliable & valid can achieve
this objective & can also save cost. In order to achieve organizational
objectives effectively & efficiently, it is important to place the right
man on the right job at the right time at the right place. In order to
avoid the pitfalls of wrong selection & placement, it is necessary to
adopt the principal of scientific selection. The use of science &
systematic procedure in selection is essential for finding the right man
for the right job. A wrong man on a wrong job will mar the
development & progress of the organization, whereas the right man on
right job will contribute to organizational growth.
A sound selection system based on scientific methods can
go a long way in establishing an image of impartiality & thus can help
to attract & retain the most qualified candidates for in/towards the
organization.
Induction
Introducing the new employee who is designated as a probationer to
the job, job location, surroundings, organization, organizational
surroundings, and various employees is the final step of employment
process. This process gains more significance as the rate of turnover is
high among new employees compared to that among senior
employees. This is mainly because of the problem of adjustment &
adaptability to the new surroundings & environment. Further absence
of information, lack of knowledge about the new environment, cultural
gap, behavioural variations, different levels of technology, variations in
the requirements of the job & the organization also disturb the newemployee. Further induction is essential as the newcomer may feel
insecure, shy, nervousness & disturbing. This situation leads to
instability & turnover. Hence, induction plays pivotal role in
acquainting the new employee to the new environment, company rules
& regulations.
28
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 29/85
Employee Retention
Remuneration Negotiation
Salary negotiations are a critical step in the hiring process and also
attach a huge significance in retention of the employees. Candidates
with in-demand skill sets may already be evaluating other
opportunities by the time you make an offer, so its important to handle
this stage effectively. Following are some tips for successful salarynegotiations.
Act Quickly
Once you’ve selected the prospective hire, make the offer as soon as
possible. A delay can cause you to lose the best applicant.
Cautiously Evaluate the Employment OfferEnter negotiations with a strong understanding of compensation
trends. The offer should be fair to the candidate and in line with
current standards in the industry and at your firm. Businesses that
29
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 30/85
Employee Retention
can’t provide high starting salaries should consider offering other
incentives — such as stock options, profit sharing or extra time off.
Elucidate the Details
If possible, make the offer in person. This allows you to explain all
aspects of the salary and benefits package, and provides an
opportunity for the candidate to ask questions.
Provide Encouragement
When presenting an offer, be sure to highlight the reasons someone
would want to work at your company. Prospective employees are
interested in hearing about staff recognition and bonus programs,
advancement possibilities and unique aspects of the corporate culture.
Set a Time Frame
Give entry-level professionals a few days to consider the offer, and
more senior level candidates up to a week. Applicants who will need to
relocate may require additional time.
Know When to End Negotiations
When faced with a candidate who’s reluctant to accept an offer, try to
discover the source of the hesitation. Consider the potential impact of
any changes required to address these concerns or issues. For
example, providing a salary that exceeds someone’s potential
contributions can ultimately affect your firms overall compensation
scale. Likewise, persuading an applicant with serious reservations can
backfire if that individual has second thoughts after joining your
organization.
Maintain Communication
30
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 31/85
Employee Retention
It’s important to stay in touch with the candidate after the offer is
accepted. Send relevant brochures about your company and
employment forms. Also, call the individual to make sure he or she has
all of the information needed for a successful start at your firm.
Work Environment
The top career concern of employees today involves balancing
family and work demands — even above earning a competitive salary
according to a research study commissioned by our company.
Increasingly, employees are asking for corporate programs that reflecta more flexible business environment. The challenge for businesses is
responding to these concerns without sacrificing productivity.
Following are some strategies followed by companies for
creating a friendly working environment.
Building a Worker-Friendly Reputation
Encourage staff to participate in developing solutions for enhancing
your company’s work environment. Solicit feedback from employees
by periodically conducting anonymous satisfaction surveys. Ask not
31
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 32/85
Employee Retention
only for improvements they would like to see but also practical ways of
implementing these suggestions
Publicizing Programs
Accentuating out those aspects of your business that most
Appeal to job candidates. Look for areas in which your company excels
and emphasize them when you interview applicants. For example, if
your firm is small, you may have more flexibility than larger companies
when it comes to offering nontraditional benefits, relaxed business
attire or a faster track to career advancement
Empowering the Employees
Most people work harder and do a better job if they feel the company
values their opinions; the management trusts them to be responsible
and empower them to make their own decisions.
Hire for the Long Term
The way a company hires, trains and rewards employees reveal a great
deal about its values. Hiring for aptitude and then training for career
advancement goes a long way toward building loyalty and increasing
retention rates. Companies with worker-friendly management practices
are at a distinct advantage when it comes to hiring qualified talent.
These programs help create a productive, satisfying workplace where
employee turnover, as well as recruitment and training costs, is kept to
a minimum.
32
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 33/85
Employee Retention
Significance of Training and Development
Does training increase employee retention?
IN MORE WAYS THAN ONE, employee turnover is an important
consideration for managers and employers alike. For starters, the
monetary cost of hiring a new worker is significantly high. It is
estimated that the cost of replacing an employee could average as
much as 1 year’s salary for that position. The estimate may be low. A
pharmaceutical company recently put the cost of a single employee
turnover at 1.5 times the person’s annual salary.
In addition to financial considerations, turnover takes its toll in other
ways as well. It lowers staff morale, safety, Productivity,
interdepartmental cooperation, and--most significantly--customer
service.
Where training fits in, many employers believe that training
boosts morale, enhances motivation, and improves personnel
33
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 34/85
Employee Retention
retention. Marriott hotels found, for example, that effective training of
its entry-level workers had a profound effect on keeping these
employees
• Lack of training to promote career development encourages
ambitious employees to find new employers who will provide
such educational opportunities.
• Inadequate training for multicultural staff results not only in
hostility and increased turnover of minority groups but also in
fewer applications from members of these groups. The same
holds true for women when the employers fail to provide training
about sexual harassment.
The following statements support the belief that training is, indeed,
likely to improve worker retention.
• Employees are trained to do things that are applicable only to
jobs found in their own organizations. Someone, therefore,
skilled in a highly specialized technique in forensic pathology, for
instance, might have difficulty finding a similar job elsewhere
(unless that skill were in short supply, in which case the worker
would be highly sought after by other employers).
• Effective, comprehensive training provides experiences that
allow workers to realize success early on in their careers,
resulting in increased morale and, as a result, improvedemployee retention. Note: The most successful training will be
that which is given during the orientation of new employees
since this is when workers are most receptive to learning new
things.
34
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 35/85
Employee Retention
• Training in participative management, empowerment, and self-
directed teams produces significantly increased job satisfaction.
People who become members of semi-autonomous work teams
are more resistant to turnover. (Keep in mind, however, that
when such programs are first introduced, turnover may increase
for a short time since some employees thrive only in paternalistic
organizations and therefore will be unwilling or unable to accept
more responsibility.)
Now lets look at the other side of the coin, since some people would
argue that training can actually work against employers, encouraging
turnover.
• Many employers discover--unfortunately, too late--that they have
trained their people for other employers, often the competition.
Case in point:
Hospital A trains student nurses. Hospital B uses the money that it has
saved by not supporting a training school to entice Hospital A
graduates into joining B’s staff.
Bank managers are constantly complaining that they train their
employees in computer operations, only to lose them as soon as they
become proficient.
• Many people accept positions in organizations that provide high
quality education or highly specialized training, knowing full well
they will leave as soon as they complete that training. This is
especially true in the military. In fact, judging from the recruitingmessages of the armed services, this practice is actually
encouraged.
• If training is involuntary or must be paid for by the trainee,
morale may plummet. If training programs cause hardship, for
35
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 36/85
Employee Retention
example, by being offered only after work hours or at another
inconvenient time, employees may not be able to synchronize
their participation with personal obligations. Any of these
instances spur workers to look for a new job.
• Employees become upset when they believe that their training
agenda is inappropriate or that the quality of the training
sessions leaves much to be desired. Technologists will surely
become frustrated if they are taught things contrary to what they
have learned in the laboratory, or if they are unable to apply
what they were taught in the classroom to their work back at the
bench. Hence, employee retention is once again threatened.
• A bigger question. Perhaps rather than pondering over whether
training helps to retain employees, we should ask ourselves this
question: “Does training improve service?” The answer is a
resounding YES! The right kind of training, given to the right
employees, by the light trainers, at the right time, and reinforced
by their managers back on the job can have a significantly
beneficial effect on customer service, productivity, safety,
turnaround time, and morale.
36
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 37/85
Employee Retention
Performance Appraisal
Performance appraisal may be defined as a structured formal
interaction between a subordinate & supervisor, that usually takes the
form of a periodic interview (annual or semi - annual), in which the
work performance of the subordinate is examined & discussed, with a
view to identifying weaknesses and strengths as well as opportunities
for improvement & skill development.
In many organizations – but not all – appraisals results are used,
either directly or in directly, to help determine reward outcomes. That
is, he appraisal results are used to identify the better performing
employees who should get the majority of available merit pay increase,
bonuses & promotions.
Employee Viewpoint
37
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 38/85
Employee Retention
From the employee view point the purpose of appraisal is four – fold :
1) Tell me what you want me to do
2) Tell me how well I have done it
3) Help me to improve my performance
4) Reward me for doing well
Organizational Viewpoint
From the organizations point of view, one of the most important
reasons for having a system of performance appraisal is to establish &
uphold the principle of accountability
Before performance appraisal one must keep the following things in
mind:-
Encourage Discussion – Research studies show that
employees are likely to feel more satisfied with their appraisal
result if they have a chance to talk freely & discuss their
performance. It is also more likely that such employees will be
better able to meet future performance goals.
Constructive Intention – It is very important that employees
recognize that negative appraisal feedback is provided with a
constructive intention, i.e. to help them overcome present
difficulties & to improve their future performance. Employees will
be less anxious about criticism, & more likely to find it useful,
38
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 39/85
Employee Retention
when they believe that the appraiser’s intentions are helpful &
constructive.
Set Performance Goals – it has been shown in numerous
studies that goal setting is an important element in employee
motivation. Goals can stimulate employee effort, focus attention,
increase persistence, & encourage employees to find new &
better ways to work.
Appraiser Credibility – it is important that the appraiser be
well informed & credible. Appraiser should feel comfortable with
the techniques of appraisal & should be knowledgeable about
the employee’s job & performance.
When these conditions exist, employees are more likely to view the
appraisal process as accurate & fair. They also express more
acceptance of the appraiser’s feedback & a greater willingness to
change.
Motivation, Satisfaction & Retention
Performance appraisal can have profound effect on levels of
employee motivation & satisfaction.
Performance appraisal provides employees with recognition for
their work efforts it also offers opportunity to focus on work activities &
goals, to identify & correct existing problems, & to encourage better
future performance. Thus, the performance of the whole organization
is enhanced. The power of social recognition as an incentive has been
39
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 40/85
Employee Retention
long noted. In fact, there is evidence that human beings will even
prefer negative recognition in preference of no recognition at all.
If nothing else, the existence of an appraisal program indicates
to an employee that the organization is genuinely interested in their
individual performance & development. This alone can have a positive
influence on the individual’s sense of worth, commitment & belonging.
The strength & prevalence of this natural human desire for individual
recognition should not be overlooked. Absenteeism & turnover rates in
some organizations might be greatly reduced if more attention were
paid to it. Regular performance appraisal, at least, is a good start
Compensation Management & Reward
Compensation considers why organizations pay people the way they
how various pay strategies influence the success of organizations.
Compensation management basically starts with job analysis, job
descriptions, job evaluation, salary surveys, salary ranges, and
customized performance evaluations
Compensation could be briefly classified into categories namely
Monetary compensations
Non monetary compensations
Benefits are any form of compensation that aren’t part of an
employees basic pay and aren’t tied directly to job requirements or
performance levels. Specific employee benefits today take a multitude
40
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 41/85
Employee Retention
of forms — from the basics that you find in every benefits package
(Social Security, workers’ compensation and unemployment insurance)
to highly specialized offerings such as tuition reimbursement, child- or
elder-care assistance and in-house concierge services. Precisely which
benefits the company offers and what portion of its payroll expense
goes to pay for these services will depend on the company’s financial
health, the competition for talent within the industry and the strategic
business plan.
Case Study
Every month Sandeep Mahajan and Ramesh Boridkar eagerly
wait for one thing — the pay cheque. Sandeep is the director and
Ramesh the office boy in the same company. Like them millions await
their pay cheques every month. The pay has become a symbol of
someone’s worth in the organization vis-a-vis the of the work being
performed by the person. Figuring out how much any one is really
worth has been never easy.
Recently we hired a very senior executive for an IT client. After
pro deliberations we offered Rs 40 lakh per annum. We thought we had
done a pretty good job because the pay was equivalent to that of themanaging director. Six months later the executive started raising the
very issue of his perceived worth and claimed that he should be
drawing Rs 50 Iakh. The managing director and other directors had
never had any salary hike for the past three years. The former had in
fact brought the organization from its inception to the current level.
41
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 42/85
Employee Retention
The new executive had agreed on performance target of $2 million and
failed to deliver. Yet, he argued that his compensation was unfair and
was not reflecting his worth.
The traditional Pay Cheque
Traditional pay scales in companies reflect job characteristics like
importance of the work, decision/responsibility level. The salary has
been and will continue to represent the positional level in the
organization. Even in companies, which attempted merit pay, the
quantum was so small it failed to register any impact on the
performance.
Pay hikes are similarly linked to promotions. Employees expect
not a jump but a big leap in pay but would not agree or even discuss
how much they performance would go up in the elevated position.
The HR community also spends considerable time in collecting
market and industry data.
The market ultimately decides pay levels, but it also assumes
that people occupying similar positions in organizations, or having
similar experience or skills, must be on the same salary irrespective of
contributions.
The pay levels for positions go up or down, based on supply and
demand levels (We have witnessed pay rates going up over $100 per
hour during the Y2K crunch). The issue therefore is—should we allow
the market to dictate pay, or the position or hierarchy to drive the pay,
or should a good portion of the pay come from performance andcontribution?
The traditional pay scale models are not viable any more. Hence,
it is time for organizations to re-engineer their salary system. The
meaning of pay has to change just like the economic and social orders
42
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 43/85
Employee Retention
have undergone a change. IT organizations are already on the road to
change the meaning of compensation. Comparable worth is a
complicated issue and hence very many organizations are defining the
meaning of worth itself. The basis to determine pay is gradually
shifting from position to performance, status to contribution. This will
have some revolutionary consequences. Companies are working on the
theory of doing more with less. They are driven hard to conserve
precious human as well as financial capital. The route therefore is not
far away from performance and pay cheque linkage. The new mantra
must be, “get paid only if there s contribution”. That is remuneration
according to the expected level of contribution. The guaranteed pay
syndrome must now end.
The new order
Having said all the above it is worthwhile to look at merit pay system
also. Merit pay is the first logical step to link performance to pay. Pay
the base salary as per the job ranks, and then do annual or semi-
annual raises based on performance (this is still conservative in my
view). It still protects the traditional hierarchy based system.
Quite often this contradicts the view that the organization’s
performance s team work, as pay raises here come only for individual
performance.Many would agree that pay raises should come only through
performance, but which performance? That of the individual or the
organization?
Individual performance as a determinant of pay increase has been
identified as the most important internal equity. Companies must then
43
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 44/85
Employee Retention
lean towards systems wherein the better performers at least will see
the linkage of raises to their contributions.
Evidence shows that there is positive association between
organization performance and compensation. There is a universal
agreement among lower level people that managers receive unfairly
excessive amounts. The question of getting more by paying less will be
answered if there is a system of thin guaranteed pay and fat variable
pay that depends on the company’s performance. The fixed wage cost
thus can be brought down.
As the compensation mode moves away from status or position price
to contribution and performance, the work culture also undergoes
change. Work cultures are no more authoritarian and encourage
constant innovation, risk taking, quick problem solving, the status as
basis for pay also must vanish soon. In conclusion we can say that
there is considerable merit in linking compensation to corporate and
individual performance. Successful introduction will depend on striking
balance between the two.
Thus aspects to be considered while formulating the compensation
plan
Develop compensation strategies and policies in line with
legislation and the organization’s business strategy.
Attach meaningful monetary values to posts in the organization
ensuring that the organization’s compensation is in line with
market forces (this maybe cy means of traditional job evaluationor other methods such as skill or competency based pay).
Develop appropriate compensation systems for the organization.
Manage overall labour costs.
44
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 45/85
Employee Retention
Reward = Retention
Recruiting and retaining the staff who can deliver the strategic
objectives of an organization are fundamental responsibilities of any
manager. Whilst selecting individuals who match the ethos and culture
is crucial, they will not join the organization if the pay and benefits
package is not attractive.
Defining Total Rewards and a Rewards Strategy
Designing a reward strategy begins with the broadest view and
understanding of the concept of “Total Rewards.” This term includes all
types of rewards indirect as well direct and intrinsic as well as
extrinsic. From an employee’s perspective, it is everything the
employee takes away from his or her relationship with an employer.
The operative word here is everything! Yet this definition is
inconsistent with how reward plan design is generally practiced; very
few companies take such a holistic view.
Total Rewards
TR begins with base cash the fixed and recurring wage. Building on
base cash is any short-term variable pay. Short-term variable pay is
compensation that s paid for the result of work measured in
increments of a year or less; it typically varies from one period to the
next.
Non-cash Rewards
In addition to the elements of Total Remuneration, organizations
offer employees rewards in various forms that, while measurable, may
or may not have a dollar value. As the dynamics of the labor market
shift, these other non- cash rewards take on greater significance for
several reasons.
45
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 46/85
Employee Retention
Non cash rewards are the components of the employment compact, or
employer/employee relationship that matter most to today’s
workforce, People do not leave jobs for money they leave jobs for
opportunity.
Assessing the companies’ assets all too often, the power of the
individual a company is neglected or underrated. The fact is, without a
team of individuals that are fighting with the company and for the
company the company going to be in five years time? The company
may have given them training, support, advice and guidance, but what
about the package the pay and benefits? If the company relies on their
team’s knowledge and talents success, have they assessed the impact
their reward system might have on their employees? After all, the
companies don’t want their Einstein s running off to their competitors!
It doesn’t take a genius to determine the fundamentals for
retaining key staff, just common sense. Good remuneration packages
benefits and staff perks, However, the difficulty arises in knowing how
to effectively implement and assess it. Setting salary benefits
packages to attract and retain staff is all about managing reward, and
managing reward is doing the things that needs to done to implement
the reward strategy. ‘The reward strategy is the means of using pay
and, or other forms of reward, to assist the organization to achieve its
corporate goals.’
Stopping employees from leaving begins before they are
recruited and continues even after they have left. ‘It costs money to
keep staff, but then recruitment can cost up to 150 per cent of the
advertised post’s salary and failing to deal with staff retention can
potentially affect financial performance It is not a simple issue, but if
46
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 47/85
Employee Retention
the company wants to keep their best staff then they need to take
action.
Typical staff rewards cover pay, benefits, training and the
working environment. Getting the basic pay structure in place is of
prior importance. First of all, which type of job evaluation are the
companies going to use to structure their pay package? Analytical —
where they create the job first and then put the people in place? Non-
analytical — where the whole job evaluation is based on a ranking
scheme? Or using pay comparisons?
‘The salary structure should depend on the size, type and nature
of the organization, and should provide the flexibility to cope with
market and skills pressures. It should also have the scope to reward
high achievers and solid performers, and form the basis for career
planning.’
In order to maintain a happy working environment, it is important for
employers to identify what’s important to the people that make up its
workforce. For example, parents, graduates, older workers, women and
specialist staff, The pay ranges can then be set in relation to age,
Service, qualifications, performance and marketability.
Research shows that paying extortionate rates to attract and retain
talent is not necessarily the answer. Compensation becomes the weak
link during uncertainty or downturns.
Salary levels have been taken to unrealistic level. Today the ratio
of 1.5 : 1.0 can be seen between salary levels for similar positions
between IT and non - IT sectors. This has resulted in low withstanding
capacity of companies.
47
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 48/85
Employee Retention
Other motivating factors, which attract and retain staff, are
interest in the job, prospects in the organization and working
conditions. Is it a ‘nice place to work? What do the employees like
about it? What’s lacking Benefits could be categorized into salary
(fixed and variable), asset building, long term security, medical needs,
social / family needs, education / learning of employee and family, long
term association and specific superior performance awards.
If the company doesn’t know, why not ask their staff. Send a survey
around the office; ask for feedback in appraisals, reviews, or in exit
interviews. Make the staff feel valued — show them that their input
counts now — rather than leaving it too late!’
The top three reason people leave jobs all involve opportunities
the opportunity to grow and develop, to learn new skills, and to be in
an environment where they are appreciated. On a list of the top eight
reasons why people leave jobs, pay rants at number eight. People seek
the opportunity to contribute, and they want to feel their contribution
is appreciated. At the same time, chief executive officers rank
customer satisfaction and employee retention as the top two
measurements of value creation. Customer service is a proven by-
product o employee satisfaction, which in turn is directly linked to
rewards and recognition.
In addition, non cash rewards are the only real way to
differentiate your employment offerings. Cash is a commodity, so it
cannot different one company’s employment compact from another; it
is the intangibles that distinguish. Besides, when it comes to money,
someone will always pay more.
It is by broadly defining Total Rewards to include other non-cash
rewards that employers truly distinguish themselves in the labor
48
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 49/85
Employee Retention
market from the competition and earn employee commitment. It is a
matter of focusing the employment compact on the rewards that
matter to the workforce you are trying to create, not on the cash
elements traditionally measured by companies. Organizations spend a
lot of time measuring Total Remuneration. But what matters to
employees is the total package the Total Rewards.
It is never advisable to wait for the inevitable to come along —
losing staff could have repercussions on the business, and clients could
begin to doubt the ability of the company. Although some staff will
eventually move on, it is important to identify the needs of the
individual — what benefits are attractive and how will these produce
results?
A strategic reward system - pay, benefits, continual training and
investment — can provide an excellent grounding for a successful,
adept team. ‘Spend the money, invest in your staff. If you get your
strategy correct, you’ll be rewarded with more than ten times the
amount of money invested.’
Exit Interviews
In traditional internal face-to-face exit interviews, “better pay”
and “better job opportunities” are often the main reasons cited for
leaving the organization However, relying on the information gathered
49
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 50/85
Employee Retention
in this way can be misleading since, in this type of interview situation,
employees are often reluctant to identify the true causes for their
decision to resign and tend to provide more “socially acceptable”
reasons for leaving.
This issue of pay emphasizes the need to be sensitive to both
“push” and “pull” factors that may have influenced the employee’s
decision.
The traditional method of having the employee’s supervisor or a
company HR representative conduct an in-person interview on an
employee’s final day is fraught with difficulties and problems, including
being time-consuming, difficult to tabulate, not necessarily executed
consistently and both less reliable and valid than using surveys to
collect the data.
It appears, then, that many organizations are failing to recognize
the value of a systematic approach to collecting information from
exiting employees, including:
Gathering and collating the data in a structured manner
Aggregating the results for the organization as a whole
Analyzing the findings to identify consistent trends, patterns and
themes
Using the results to determine and implement strategies to
increase retention and reduce turnover.
In the most straightforward terms, an exit interview is simply a
means of determining the reasons why a departing employee has
decided to leave an organization.
50
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 51/85
Employee Retention
With the use of an exit survey system that effectively canvasses the
opinions and attitudes of departing employees, a wide range of
operational, organizational and personal variables affecting the
decision to leave are likely to be uncovered. It is this information that
is essential to highlighting the areas of perceived deficiency in the
organization’s working environment and can then be used to plan
effective retention strategies and actions.
The main reasons for leaving can be categorized into five primary
“themes”…
Career opportunities, including:
Perceived opportunity for advancement
Presence and/or clarity of development plan.
Enjoyment of the work, including:
How well work utilizes skills
“Fit” with job
Work/life balance.
Corporate leadership, including:
Clarity and strength of vision and mission
Management style
Overall perception of leadership
Level of respect and support received.
Availability of training, including:
Opportunity to learn new skills/develop new talents
Corporate commitment to training and development
51
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 52/85
Employee Retention
Keeping up with latest technology.
Compensation/rewards, including:
Base/variable pay
Benefits
Recognition of contributions
Communication regarding performance.
Thus it should be recognized that, in many cases, the organization has
at least some influence over the employee’s decision to voluntarily
give up a job. In fact, when all reasons for leaving are categorized in
terms of
(1) The employer’s impact on the decision to stay or go and
(2) The employee’s own level of control over the decision,
More than 50% of the reasons for leaving are within the control
of both the employer and the employee. These reasons for leavinginclude both the longer- term concerns and problems that can lead to a
gradual decrease in satisfaction as well as the more immediate work-
oriented “shocks” that can prompt previously-satisfied employees to
rethink their commitment to the organization and, ultimately, leave
their jobs.
From this analysis, it is clear that organizations should seriously
consider what strategies and policies are in place to reduce turnover
and retain valuable employees. Since a large proportion of turnover
appears to be avoidable, it is imperative for organizations to determine
how best to intervene and thereby prevent at least some degree of
turnover.
52
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 53/85
Employee Retention
The value of exit surveys
A structured system of exit surveys can play an integral role in a
well – planned programme of employee satisfaction and work climate
research. Some principles for planning an exit survey system include
being:
Universal — interviewing all voluntary departures provides a
more complete understanding of turnover.
Standardized — using a core set of consistent questions ensures
comparability throughout the organization and across time.
Comprehensive — including feedback on the work environment
in addition to reasons for leaving increases usefulness in
determining strategies to reduce turnover.
Independent — minimizing the discomfort in revealing the true
reasons for leaving improves the reliability of the results.
Available — encouraging centralized access to the findings
increases the likelihood of taking action.
Monitored — setting targets for reduction in turnover through
planned strategies helps to ensure that the investment made in
exit surveys is to its maximum use.
53
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 54/85
Employee Retention
Questionnaire
Name of the organization:
Name of the employee:
Designation
1. According to you, which sources are reliable for recruiting the
right candidate?
2. What according to you attracts job seekers to your company?
a) What kind of induction program does the company
design for the new recruit?
Duration of the program
c) Do you think that the employees benefit from the
induction program? If yes, to what extent?
3. Is succession planning done for the employees if yes at what
level?
54
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 55/85
Employee Retention
4. Does work culture of the company help in boosting the morale of
the employees?
a) How do you define the culture of your organization?
5. What efforts are taken to ensure that the employees have a good
working environment?
6. How often are performance appraisals conducted?
i) 3 months ii) 6 months iii) Annually iv) other [pls specify]
7. How does the result of performance appraisal help the
employees & the organization?
8. What steps are taken by the company in order to motivate the
employees who have reached at a stagnation level?
9. How are the training needs identified?
10. How often management development programs organized for
managers?
55
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 56/85
Employee Retention
11. On what basis are the pay packages revised?
12. Are job rotation, enrichment, enhancement techniques adopted
in your organization? If yes, how does it benefit the employees &
the organization?
13. What are the two challenges faced by the HR department &
how can it be overcome?
14. What steps are taken for retaining productive & efficient work
force?
15. According to you how can exit interviews prove to be a double
edged weapon for developing retention strategies?
16. . What retention strategies are adopted by the company so
far?
56
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 57/85
Employee Retention
Analysis of survey
Following is the analysis of the survey conducted by me of
various companies. Major information has been acquired by personally
visiting the companies and some information is compiled with the
material acquired through internet.
The companies whose survey analyses are presented are Ceat,
Convergys, L&T infotech, and Airtel. Below is the brief analysis of the
survey.
The companies basically underwent the same recruitment’s
processes such as ads in newspaper, approved manpower agencies,
campus interviews, walk-in interviews, employee referrals, email etc.
As very much obvious the companies interviewed are quite reputed so
it’s the brand name that attracts the job seekers towards the company.
And other reasons were scope for multifunctional experience under
one roof, working condition is the best, good housing and schoolingfacilities, investment of time, money and energy in continuous training.
Job prospects offered are mostly complete orientation of the
organization in all functional facilities. Basically during recruitment
itself the skills needed are tested and even through performance
appraisal system is undertaken to gauge soft skills. And these skills are
basically working in teams, interpersonal skills, creative thinking,
entrepreneurial skills etc.
Induction program generally include proper orientation and top
management takes part in formal induction of employee and convey
the mission, vision and other values of the company, followed by
feedback. Attempts are being made to promote employees vertically
and laterally.
57
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 58/85
Employee Retention
The main requirements for prevalence of healthy work culture are
spirit of teamwork, informal employee feedback, open, Informal and
performance enabling innovativeness, respect for people,
empowerment with accountability and entrepreneurship are the key
ingredients. But the major problem faced is senior people feel insecure
with young entrants, especially since new employees are comfortable
with computers. and the steps taken to achieve the above stated
aspects are to empower employee to take decision and suggestions
are encouraged, ease at work, no obstruction during delivering error
free service, informality, fun, work life balance, employee
communication.
The next question was about the importance attached to
compensation benefits. Well here Convergys said it is one of the most
important retention strategies. Whereas at Ceat it is not considered as
a decisional factor they believe more on non-monetary benefits.
Rewards and recognition schemes undertaken are like employee of the
month, rewards for achieving above expectation results, even best
performers reward schemes for dealer’s e.g. foreign trip, thank you
note etc. Building trust in their minds for the company could bring
about commitment from employees. i.e. is by being transparent in the
various policies and strategies, by seeing to it that that the employees
personal goals is matched to that the expectation of the organization.
Developing commitment, passion and a positive attitude, build
employee capability
Attrition rate is around 15% in L&T Infotech, 18% in Airtel and
around 1% in Ceat and quite normal in other companies. And exit
interviews play a vital role in reducing attrition rates.
Some of the unique HR policies followed by these companies are as
follows:
58
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 59/85
Employee Retention
1. Continues identification of training needs (functional as well as soft
skills) and organizing training in a regular basis.
2. Recognition of higher studies (part time) and encouraging company
sponsored management programs.
3. HR reach out, Customer contact program
4. Follow open door policy
Managing IT Retention and Turnover
The Indian software industry is poised for stupendous growth in
the coming years. Though this might sound like great news for the
Industry stalwarts and the IT Industry as a whole, it has really not
being sounding as a sweet music to the real soldiers of this revolution,
the people who are in the midst of the “Real action” on the shop floor
(if I may use that word), yes reference is to the software programmers
who make those arcane lines of code really work.
Software is a wealth and job creating industry, which has in just
a few years, grown to US $ 1 trillion, employing millions of professionals worldwide. The Indian software industry has burgeoned,
showing a nearly 50% compounded annual growth rate over the recent
years. Being knowledge — based industry, a high intellectual capital
lends competitive advantage to a firm. Intellectual capital comprises
human capital and intellectual assets — the latter being any created
bit of knowledge or expertise. With a global explosion in market -
opportunities in the IT sector, the shortage of manpower both in
numbers and skills is a prime challenge for HR professionals. The
related issues are varied indeed: recruitment of world-class workforce
and their retention, compensation and career planning, technological
obsolescence and employee turnover. This article presents some of the
59
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 60/85
Employee Retention
findings of our recent research on the HR challenges posed by the IT
sector.
As different consultants occupy themselves painting a rosy
picture for this industry in the coming years, the industry leaders are
busy chalking out business strategies, talking about the markets,
technologies, more stable Revenue Models etc, we often forget that at
the core is the software professionals who are ultimately going to
make this possible.
The more motivated they are closer the goal. But, these guys are no
zombies who are paid for sweating on the assembly lines instead these
are the “Knowledge Workers”, more qualified, more human and more
expressive. They have a voice, and their employers cannot afford to
turn a deaf ear to them. Another interesting aspect that we need to
identify is that these people work in teams and as it is, every
successful team needs a successful leader. They need leaders at every
level, leadership is no more “Motivational”, it is a “Hygiene Factor”
today. Companies need to make far more investments today in
producing effective leaders at all levels. While the Indian IT industry
has been blessed with superlative leadership at the very top
(N.R.Narayanmurthy, Azim Premji, Ashank Desai), this leadership does
not always percolates down the line. These factors have compelled the
IT companies to give priority-one attention to its greatest resource, the
“Human Resource”.
Here employee retention and motivation becomes a critical
component of this humongous challenge. The turnover rates, in the
range of 15% in the past year, have moved into the 20% range for
many organizations. Top performers are those companies that have
managed to hold their turnover below 10%, for many of them just
barely. An ideal turnover level, estimated by many at about 5%, is
60
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 61/85
Employee Retention
simply unattainable for most organizations. Those companies that do
achieve such levels in the short term may get there by using various
short term retention tactics, such as bonus and incentive plans, that
may only stem a mass exodus for a period of time. If this is a critical
time on a project, of course, it can be well worth it.
Nonetheless, it is, like most compensation based retention
tactics, merely a short-term fix. One that lasts until the bonus is paid,
the next salary survey released or the next headhunter calls. Over the
past year, we have seen many organizations recognize that they need
to move beyond the concept of traditional compensation, to focus on a
more fundamental strategy of employee development, in order to
retain top IT talent.
They need to examine in detail the issues related to employee
retention. Companies need to think beyond compensation, to examine
the nature of IT work and the work environment. They need to explore
the importance of training, development and advancement
opportunities to managing retention and turnover. We also have to
look at the impact of work-family life balance.
Today, an employee’s life outside the workplace can have a
significant impact on their value to the organization. We need to
explore areas where organizations may in fact spend less and
accomplish more, for both the organization and the employee.
Let us examine the tactics being used to “treat” the IT retention
problem in organizations today and raise some strategic options for
organizations to consider in developing a true staffing strategy. This
shift from tactics to strategy is a critical step in recognizing how to
61
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 62/85
Employee Retention
approach the management of the most costly resource in IT
departments.
A Tactical View of Retention and Turnover
Retention and motivation of personnel are major HR concerns
today. People—a Gartner group company specializing in management
of human capital in IT organizations—has observed that the average
tenure for an IT professional is less than three years. Further, the use
of new technologies, the support of learning and training, and a
challenging environment ranked higher than competitive pay
structures as effective retention practices. Our own recent survey of
1028 software professionals from 14 Indian software companies,
showed that while the professional gave importance to personal and
cultural job-fit, HR managers believed that the key to retention was
salary and career satisfaction. Money was a prime motivator for
‘starters’ but for those into their third or fourth jobs, their value-
addition to the organization was more important.
Monetarily, offering ‘the best salaries in industry’ is the minimum
every company is doing, apart from performance-based bonuses, long-
service a and stock options. Many organizations frequently conduct
employee satisfaction and organization climate surveys, and are
setting up Manpower Allocation Cells (MAC) to assign the right project
to the right person’. In fact, some are even helping employees with
62
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 63/85
Employee Retention
their personal and domestic responsibilities to satisfy & motivate their
workforce!
For most IT organizations, employees and employee retention
and turnover are managed tactically. A wide variety of tactics are
employed, each of which is thought to have a positive effect on
employee retention. For the most part these tactics are employed in an
evolutionary and ad hoc way in response to issues that arise inside the
IT organization.
These tactics or initiatives are reactive in nature, its intention is
merely to solve an existing issue and not to anticipate the larger issues
and address them. Some emerge as part of a planned process to deal
with staffing issues; others are developed in response to a problem or
issue faced by one or more employees. Whether they emerge from a
systematic review process or as a by product of some other issue, they
are seldom formulated into an overall strategy; their costs are not well
understood and their specific impact on retention even less so.
The tactical approaches can be organized into eight major
areas:
Compensation and benefits
Reward and recognition
The work environment
Lifestyle support and work arrangements (very important for the
female employee)
Flexibility and autonomy
Training, Development and Advancement
Communication
Management quality
63
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 64/85
Employee Retention
For each of these areas, a general overview of the impact on retention
and turnover is provided;
They make a bottom line assessment of the critical value of each area
(i.e. how important is each component for addressing the employee
issue) and then explore the individual tactics, highlighting some key
details in each area.
Another challenge that faces the Indian IT companies is that
people in India are culturally diverse, multilingual, and they
significantly differ in their upbringing. Yet, in organizations, they come
together to achieve a common goal. People differ in their needs,
aspirations, likes and dislikes, expectations and preferences, all of
which make them unique. The IT companies have as many different
people as their fingerprints. Human resources are considered to be the
most complex and challenging among all available resources in an
enterprise, more so in an IT enterprise.
Thus, let us try to understand the demographics of a typical IT
organization
Above 40
A majority of software professional belongs to the age group of 21-30,
constituting almost 74%. By its very nature the software industry is
young. The employees here have certain unique needs and aspirations.
The factors that motivate or at sometimes demotivate can be clustered
under following headings, these are;
1. Company Driven
Company’s Brand Image
Latest technologies to work on
64
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 65/85
Employee Retention
Company’s bright future
Company’s ambitious growth plan
The Learning experience
2. Process Driven
Participate management culture
Fast careers growth
Enhancement of competencies
Transparent and effective communication
3. Relationship/Behavior Driven
Dynamic Leadership
Team environment
Well defined roles! expectations
Sound interpersonal relationships
4. Value Driven
Fair/Impartial treatment
Timely rewards/recognition
Regular feedback
Respect for the individual
Empowerment to take decisions
5. Sustenance Driven
Location of work
Compensation
Functional infrastructure
Onsite Opportunities
65
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 66/85
Employee Retention
HR policies
These factors do not work in isolation; instead they have a cumulative
impact on the employees’ performance at the work place. Depending
upon the level of employee in terms of his designation, experience,
age the weight he gives to these factors varies. The employees can be
further classified in different levels as follows:
Level 5
Level 4
Level 3
Level 2
Level 1
Level 1: Associate, Entry Level.
Primarily works on project tasks, design tasks, design specifications,
develops routine and utility Programs.
Level 2: Intermediate Level.
Uses experience and technical competence for planning, organizingand
conducting different phases of software projects, based on
performance requirement.
Level 3: Senior Fully Experienced Level
Develops and applies advanced methods to create, design, and
develop complex software.
Level 4: Consultant
Conducts, plans and directs major projects, or phases of projects; co-
ordinates teams staff, recommends technical correction.
66
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 67/85
Employee Retention
Level 5: Manager, Software Engineering! Development.
Reviews, evaluates and approves software development specifications,
projects, proposals
Developing a Strategic Orientation
People Management cannot be treated as a one off initiative but it
should be. It is imperative that IT companies review a large number of
tactics and take their analysis up to a somewhat higher level and
formulate a strategic position around their people management
strategies. People issues should be resolved with the same importance
as the IT strategy considers architectural issues related to hardware
and software and their fit to their business needs. It is must that the
software companies should have an IT staffing strategy that provides
overall guidance in managing the people in any organization.
In short companies face two strategic directions they might pursue in
light of the IT labor shortage and the inevitable turnover that it
engenders.
Organizations need to manage the level of turnover toward some
desired target. They need to manage for turnover by restructuring
work and employment relationships to taking into account persistent
high levels of turnover.
Setting a target level of turnover
Managing towards a low target level of turnover can be accomplished
through a variety of approaches by combining different tactics. Three
influence points that can be used as the core of such a strategy are as
follows:
A Compensation based strategy
A Career based strategy
67
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 68/85
Employee Retention
A work environment strategy
Of course these factors can also be combined in various ways to
develop a unique strategic mix that best fits with your organization.
Employee Retention Problems Faced By
Call Centers
One of the most difficult challenges faced by call center
management too how to retain qualified workers. In the call center
operation, where over 70% of costs are related to staffing, turnover is
a particularly troubling problem costing organizations millions of
dollars per year. This article explores the cost or turnover to a call
center, the reasons why turnover happens, and what front- line
supervisors can do to improve Turnover Rate:
Turnover is at an all-time high. In all types of jobs, workers aged
20-24 stay with an organization only 1.3 years on average (compared
to 1.5 years just 15 years ago), and workers aged 25-34 stay 2.7 years
68
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 69/85
Employee Retention
The cost of even low levels of turnover is substantial and should
be tracked carefully in planning a retention strategy. There are two
important numbers to understand in this turnover calculation. One is
the statistical rate of turnover and the other is the actual cost of
turnover to the call center and the organization as a whole. Both
numbers should be calculated and tracked on a regular basis for
trending purposes and business case justification for programs to
assist with retention.
This turnover rate should then be reviewed to analyze internal
(employees leaving for other positions within the company) versus
external (employees leaving the organization) turnover.
Both are costly to the call center organization, but obviously some
benefits to the organization if qualified people are leaving to fill other
roles within the company.
Turnover Costs
There are many costs associated with call center staff turnover.
Some are obvious, direct, measurable costs, while others are indirect
costs organization. The measurable costs of turnover generally fall into
the following categories:
Recruiting Costs: The cost of print or other advertising, jobfairs, and other promotions to attract qualified staff.
Hiring Costs: The cost of the human resource department to
process applications and screen employees, as well as call center
staff time interview candidates,
69
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 70/85
Employee Retention
Training Costs: The cost of training facilities, trainer time, and
student training materials, both for initial and ongoing training.
Supervision Costs: The cost of additional supervisory time to
assist new staff in their early learning stages.
Unproductive Paid Time: The cost of wages during the initial
training period when staff are not yet available to process calls.
Overtime Costs: The cost of paying overtime to existing staff to
cover call workload during understaffed periods.
Reasons for Turnover
There are many reasons why turnover in the call center
industry. Some of these reasons are under the control of the call center
and are “fixable” while some must be chalked up as simply cost of
doing business.
One of call center management’s responsibilities is to consistently
assess the reasons why people leave the center (and conversely, why
they stay) so that problems in the center’s control can be addressed.
The main reasons for call center turnover fall into these four
categories:
1. Compensation: Inadequate compensation is a reason often
sited in agents exit interviews. This will be a common factor for
call centers located in highly saturated call center labor markets
such as Phoenix or Dallas where competition for qualified call
center staff is high. Call centers should do periodic compensation
bench marking studies to ensure their wages are commensurate
with the wages or nearby centers for the same type of work,
particularly in highly competitive areas.
70
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 71/85
Employee Retention
2. Job Fit: Many times the reason an individual leaves the center
is simply due to a poor job fit. This type of turnover can be
reduced significantly by defining and advertising the job
accurately and doing proper screening and assessment on the
front end to make sure the job is a good choice for the candidate
and vice versa. More effort during the selection phase will pay for
itself many times over in improving retention, Part of this
screening process will assess whether or not the candidate is
likely to be happy within the unique working condition found in
most call centers: solo work, confined space, repetitive tasks,
constant monitoring, and inflexible work schedules.
3. Limited Job/Career Opportunities: Many individuals leave
center due to limited possibilities for career growth or
opportunities for advancement. Some organizations have multi-
level job ladders with numerous levels of agent positions and
multiple career paths to many areas.
Unfortunately, others are severely limited in growth potential
and see turnover as a result. In a survey conducted by
callcentercareers.com, 27% of people had left one call center job
and were looking for another cited lack of promotionalopportunities as their primary reason to leave. Re-defining levels
and looking for career advancement opportunities within the call
center should be evaluated often.
71
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 72/85
Employee Retention
4. Supervisory Problems: Assuming compensation is in a
reasonable range and there is at east a reasonable affinity for
call center work, the main reason agents leave the call center is
due to ineffective supervision. For the most part, the adage
‘people don’t leave companies; they leave leaders” is certainly
true in the call center environment. In the majority of cases, a
supervisor can be either the greatest contributor to staff
retention or the primary cause of turnover.
Retention Stratagem
The new age economy, with its attendant paradigm shifts in
relation to the human capital, in terms of its acquisition, utilization,
development and retention has placed a heavy demand on today’s HR
professional. Today HR is selected to comprehend, conceptualize,
innovate, implement and sustain relevant strategies and contribute
effectively towards giving the corporation its winning edge. With a
dynamically changing and volatile demand-supply equation, especially
against erratic attrition trends and cutthroat competition no longer
restricted to local or regional boundaries, a need for strategizing and
putting in place a robust mechanism for attracting and retaining top
talent becomes vital for the company’s very survival and growth.
72
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 73/85
Employee Retention
The new age workforce comprises mostly of knowledge workers,
who are techno – savvy aware of market realities, are materially
focused and have higher propensity to switch jobs. They prefer to
experiment and explore new opportunities, are high risk takers with
higher aspirations and expectations and generally have a totally
different mind-set about job and careers.
In the current scenario, does supply really outstrip demand?
Supply of what and demand of what? What kind of people get the pink
slip and whom do the companies ring fence? In any organization the
employees may be broadly classified into four broad categories in
terms of their performance and potential.
73
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 74/85
Employee Retention
There are people who are woefully inadequate in both
dimensions, who we may call ‘strugglers’ and there are the ‘under-
performers’, whose performance falls below their potential. This
constitutes about one fifth of the total human capital at our disposal
and these people obviously qualify to be the first candidates for the
pink slip.
The other two segments comprise of the solid pro’s’ and the
stars’ who are at the higher end of the performance continuum. The
former may be relatively lower in their potential as compared with the
latter, but contribute immensely to the company’s overall
performance. We could call this as the ‘talent’ segment. This is the
segment we do not want to lose. We’ve got to protect this group from
the pull of all non-retentive forces and that needs effective retention
strategies that have to be kicked into high gear.
Retention strategies have to be viewed holistically against the
total systemic framework of talent management that encompasses the
‘talent the ‘corporation’ and the ‘environment’. Attrition and retention
should be seen as reciprocal phenomena, which have an inverse
relationship with each other, recruitment and needs for downsizing
must also be considered in conjunction.
As understanding of the inherent considerations of an individual who
wishes to join a company and continue to stay, and potential
compulsions, which push him away, would help.
The company’s brand image crowns the list of the priorities for
the job seeker, other important considerations being; the pay package
and other pecuniary benefits, the class and quality of people that work
in the company, the challenges of the job and attractiveness of the
74
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 75/85
Employee Retention
position & designation, the opportunities for career growth and
professional development and the kind of technology, he would be
exposed to. Dissatisfaction in any of these aspects causes severe
cracks to appear in the bonding. Anxieties and apprehensions arising
from restructuring, movements, marginalization, power politics,
change of boss, change of tasks and responsibilities, mergers and
acquisitions etc. could be instrumental in taking decisions to leave.
Other factors could be to explore better prospects elsewhere, to start
one’s own venture, to take up higher studies or certain private
compulsions.
From the company’s perspective, its brand equity, philosophy,
vision, mission, culture, values and ecology have a direct bearing on
talent attraction and retention. Other company - related attributes that
impact employee retention include high demand on performance, need
for new competencies, broader, deeper and diverse job expectations,
need for re-skilling and re-deployment, career offerings and growth
prospects, goal & role clarity, policies & processes and organizational
communication.
Putting in place an effective sensing mechanism to gauge
comfort, contentment and commitment levels becomes a pre-requisite
to designing and implementing any worthwhile retention strategy.
Many such instruments have evolved over the years and include
employee satisfaction surveys, organization climate audits, open
forums, one-to-one sessions, exit interviews, ex-employee interviews,
grape vines, informal social interactions, case studies and a multitude
of trend analyses based on hard attrition data. Whatever may be the
instrument, whether used singly or in combination, the success
depends on collection and collation of unbiased responses, cataloguing
75
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 76/85
Employee Retention
of direct and proximate clues, their effective analysis and drawing
sound inferences.
In order to appreciate the push and pull effect on the individual
in the context of attrition and retention a qualitative force field listing
may be helpful.
While on the one hand, a compelling brand image, astute
leadership within the organization, an enduring culture and an
environment that is trusting, caring and nurturing, credibility,
transparency, empowerment, responsiveness and creative policies on
compensation, recognition etc would exert a positive influence on the
subject talent, on the other hand, compliance, control, rigid power
structure, knee-jerk changes, unexciting and drab jobs, unjust
discrimination, unrealistic deadlines, lure of lucre and poaching would
be debilitating.
The retention strategies should be designed such that the
retentive forces are maximized and the debilitating forces minimized.
Retention strategies should not be orchestrated in isolation but must
form part of the overall strategies for strengthening the pull on the
talent, which in fact include sourcing, staffing and development
strategies like improving the pay structures & level on part with those
of similar organizations, providing the opportunities for self
development & promotional avenues, maintaining sound industrial &
human relations, adopting effective techniques of recruitment,
selection, induction & placement, providing congenial working
conditions, creating the facilities & environment to satisfy he
employee’s needs for pride, security, recognition, challenging work,
autonomy, achievement, appreciation, status, power to control etc. in
addition. A robust sourcing strategy is crucial to the exercise since the
76
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 77/85
Employee Retention
type of people one selects should not only fit into the job in terms of
skill set but should match the company culture in terms of attitude,
personality and commitment. An effective selection process ensures
the entry of the right kind of people into the organization, with the
desired loyalty and sense of belonging that goes a long way in
restricting attrition in the long run.
Conclusion
Critical human resource acts that need to be introduced and
altered for effective management of employees turn over
ratio.
1) Employees change job for a variety of reasons
According to a research paper by an IIT - Mumbai professor, there is a
significant gap between HR managers’ perception of why employees
change jobs and the real reasons as cited by the employees
themselves.
77
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 78/85
Employee Retention
The paper’s research findings show that people leave for different
reasons
depending on the stage in their career. For example employees new to
the
workforce tend to leave for more money, to work with new technology
and to move from small to large companies. More senior level
employees leave when the work is not challenging and when they are
unhappy with the company vision.
One solution presented is for companies to be careful in their hiring &
selection process to find employees with the ‘right’ cultural fit with the
company. Employers should also avoid presenting too rosy a picture of
the company without including a realistic look at the job and the work
requirements
2) Perks that work
Job satisfaction may be at an all time low but not for many companies
that have found a way to successfully incorporate perks into their
workplace culture. While some experts stress that perks are less
important than interesting & challenging work organizations finding
that benefits do make a difference in employee retention.
3) Employee’s first days are critical for retention success
Studies have shown that an employee’s experiences during his or her
first few weeks on a new job are critical in the employee’s laterdecision whether to stay or leave. Lasting impressions about the
company’s standards, the workload, growth opportunity, the work ethic
of colleagues and communication from upper management are all
formed during this early time period
78
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 79/85
Employee Retention
The following are some tips to ensure that new employees get off to a
good start with your company or organization:
a) Anticipate the first day . The new employee will have lots of
questions buzzing around in his mind as his first day approaches.
Anticipate those questions and put the answers in a letter or handout
for each employee. Questions might include things like
-What is the dress code?
-Where should you park?
-Where do workers eat lunch?
b) Provide a warm welcome. The new employee should be
welcomed on her first day by a friendly face. This can be someone
assigned to greet the new employee or a friendly person whom the
new employee met during interview process. Remind staff to say hello
and if you want to go all out - place fresh flowers on the new
employee’s desk.
c) Assign a friend. To help the new employee feel welcome during
the first week or more assign a friend who can meet the employee for
breaks and lunch and answer any questions that one might hesitate toask the boss.
79
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 80/85
Employee Retention
d) Provide a schedule. List tasks and/or meetings that the new
employee will be working on and attending during his or her first few
weeks.
e) Teach the job. Be prepared with training to help the new
employee successfully learn the specifics of the job. Make sure files
and equipment are available if necessary & consider providing a
colleague tutor who can assist with learning.
f) Touch base. During the first week, be sure to check in daily with
the new employee to find out how things are going. This should
continue at least weekly for the first month or two.
g) Provide hope for the future. Explain the organizational
structure to the new employee & let him see how his job fits in with the
company’s mission. If advancement opportunities are available,
explain how the process works and the steps for growth & training.
Employee retention is important even in an employer’s market where
workers are plentiful. Each employee represents a significant
investment that is lost if the employee leaves prematurely. You can
take steps to minimize this risk by making sure each employee gets a
great orientation to the company.
3) Effectiveness of Exit Interviews
Many organizations use exit interviews to find out why employees are
departing. They say that when an employee is leaving it is the best
time to get honest information. The employee at that point has nothing
80
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 81/85
Employee Retention
to lose and the organization can gather valuable insight into workplace
issues
Exit interview questions generally include how the employee felt about
his or her workload, advancement opportunities, compensation and
reason for leaving. Some organizations also seek to find out if the
employee is leaving for another organization and if so what makes the
new job more appealing.
Information gathered from exit interviews can also be useful in crafting
job descriptions. Employees often state that they accepted the job
without a clear understanding of what the job entailed.
Results from exit surveys may also reveal which positions are
underpaid and which supervisors lack good leadership skills.
Experts recommend that someone other than a direct supervisor
conduct the exits. If the organization is large enough to have a Human
Resources person, he or she would be the most appropriate person to
handle the exit interview.
Some charitable organizations say they don’t have time to conduct exit
interviews but it is recommended for those with a strong need or
interest in keeping turnover low.
4) Toxic bosses and more on workplace bullies
There are many anecdotes about bosses who rant and rave, insult and
belittle employees in front of others, give employees the silent
treatment, glare at them, spread false rumors, withhold information
81
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 82/85
Employee Retention
and take credit for employee’s work. This kind of psychological
violence often leaves employees physically and mentally weak.
Somewhere between 12% - 50% of workers are bullied. Both men and
women do the bullying but 80% of bully victims are female. They tend
to be women in their 40’s with many years of work experience.
Why is bullying so ingrained in our workplace? It might be a matter of
culture. We as a society value aggression, toughness and endurance to
pain. In many ways these kinds of beliefs come close to endorsing the
toxic boss pain. In many ways these kinds of beliefs come close to
endorsing the toxic boss. Thus it is time that these bullies not to be
recognized.
5) Stress relievers reduce turnovers in call centers
Call Center employees work an average of 9 - 10 hours per day with a
half hour for lunch and two 15-minute breaks. They handle
approximately 85 calls per shift. They are tied to their headsets and
are monitored for call volume, length of calls and how long they are
gone for bathroom breaks.
It’s not surprising that staff turnover in call centers looms at 33% per
year. Phone representatives are four times more likely to miss work
because of stress related conditions. To improve their retention of call
center representatives, some companies are instituting benefits
designed to relieve the stress that builds up on the job.Stress relief benefits include:
- Employee gym
-Quiet room with comfortable chairs for napping and reading
- Outdoor walking trails
82
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 83/85
Employee Retention
- Video arcade with free games
- Office Luncheons
- Stress management and time management training
- Company sponsored theme events
- Ergonomic work stations
Allowing representatives to focus on the quality of the call rather than
the speed of the call has also shown to boost productivity and reduce
the number of employee who quit by 50%
6) 83% of the managers will jump ships when job market
improves
Experts in the industry warn that if the job market heats up, HR
Managers should expect to see huge increases in staff turnover.
Eighty-three percent of US managers and executives said they will
likely seek work elsewhere when the opportunities become available.
Why are workers so anxious to jump ship? According to recruiters,
employees are fed up with feeling underappreciated and doing the job
of 2 or 3 or 4 people due to corporate layoffs. Employees are
dissatisfied with lack of promotions and pay raises and feelings of
being undervalued and overworked.
Employees that nave expressed unhappiness with their work has
increase from 15% in 2000 to 25% at the end of 2003.
7) Business coaches help solve work place challenges
Hiring a business coach can help company develop a more productive
and pleasant workplace.
83
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 84/85
Employee Retention
Business coaches help companies improve communication, build
better relationships both on & off the job and manage stress. Although
they are neither business consultants nor therapists they often
function in similar roles. Their goal is to “bring perspective,
accountability, focus and discipline to work environments and
relationships.”
Bibliography
84
8/3/2019 Employee Retention Final
http://slidepdf.com/reader/full/employee-retention-final 85/85
Employee Retention
Name of the Book Author
Human Resource And
Personnel Management
K. Aswathappa
Essentials of Human
Resource Management &
Industrial Relations
P. Subba Rao
Webliography
The following Websites have been used for reference:
www.retentionsystems.com
www.Careermosaicindia.com
www.hrfolks.com
www.expressitpeople.com
www.thecallcentersschool.com