Employee Retention

Long-term health and success of any organization depends upon the retention of key employees. To a great extent customer satisfaction, organizational performance in terms of increased sales, satisfied colleagues and reporting staff, effective succession planning encouraging employees to remain in the organization for a long period of time can be termed as employee retention (Maertz & Campion 1998).

Organizations today take great care in retaining its valuable employees and good employees as they are increasingly becoming more difficult to find (Panoch, 2001).

Human Resource Department plays an active role in retaining its employees. It make policies for employee betterment such that employee would be satisfied with the organization and stay with the firm for longer time. This shows that it is not just retention of employees but also retention of valued skills (Acton et al., 2003).

Organization’s inability to formulate and implement strategies capable of recruiting competent employees and retaining them to achieve organizational goals is one of the main challenge facing organizations in the area of performance (Gberevbie, 2008).

Hiring new employees are far difficult as well as costlier than to keep the current employees in the organization. That is why the core issue in any organization is to give a continuous ongoing effort to identify and try to keep all the best performers irrespective of their age (Baker 2006).

Employee retention is not influenced by a single factor, but there are hosts of factors which are responsible for retaining employees in an organization. Management need to pay attention to factors such as compensation & rewards, job security, training & developments, supervisor support culture, work environment and organization (Fitz-enz, 1990).

 

 

Human Resource Management Factors to influence employee commitment and retention (Walker, 2001).

Ø  Compensation and appreciation of the performed work

Ø  Provision of challenging work

Ø  Chances to be promoted and to learn

Ø  Invitational atmosphere within the organization

Ø  Positive relations with colleagues

Ø  Healthy balance between the professional and personal life

Ø  Good communications

 

 

Strategy of Employee Retention

 

Compensation

Compensation was not one of the top factors influencing non-management turnover but compensation can act as a critical factor in reducing managerial turnover and increasing commitment (Moncraz, Zhao and Kay, 2009). Compensation to top workers is given by every organization but very few organizations use it strategically. They said that “Salary and benefits policies are not being used strategically, within the organization to improve morale, reduce turnover, and achieve targets within an establishment”( Davies, Taylor, & Savery 2001).

 

Reward and recognition

Reward as something that the organization offers to the employees in response of the work as well as performance and something which is desired by the employees (Agarwal ,1998). Reward is important because it has an enduring impression on employees which, in turn, gives the employees an impression that they are valued in the organization (Silbert, 2005).

 

Promotion and Opportunity for growth

Talented employees are required for maintaining a competitive advantage and employees want career growth opportunities to develop and rise in their career ladder. Such plans include advancement plans, internal promotion and accurate career previews at the time of hiring (Prince, 2005).

 

Participation in decision-making

Modern businesses always keep its employees well informed about all the important affairs of its business and involve them in decision-making at all levels which can exploit the talents of its employees (Hewitt, 2002).

 

Work-life balance

Organizations which have generous human resource policies, have a very good chance to satisfy and retain employees by providing them an appropriate level of privacy and sound control on work environment which enhances the motivation levels to commit with the organization for the long term (Wells & Thelen (2002). Work-life balance is increasingly important for engagement and affects retention (Hyman et al., 2003)

 

Training and Development

Employee retention is investment on employee training and career development. Organization always invests in the form of training and development on those workers from whom they expect to return and give output on its investment (Messmer, 2000).

 

Leadership

Leadership style can affect organizational commitment and work satisfaction positively and work satisfaction can affect organizational commitment and work performance positively (Chung-Hsiung Fang, Sue-Ting Chang, Guan-Li Chen 2009).

 

Job Security

Employment features like lifetime employment and seniority system, job security lead to high commitment, job satisfaction as well as retention of employees in an organization (Abegglen,1958).

 

Job satisfaction

”Job satisfaction will be defined as the amount of overall positive affect (or feelings) that individuals have towards their jobs” (Feldman and Arnold 1983). Job satisfaction is correlated to life satisfaction which means that people who are satisfied with life will tend to be satisfied with the job and people who satisfied with job will tend to satisfied with their life (Rain, Lane & Steiner 1991).

Example of Employee Retention Strategy at a Leading Consumer Durable Organization in Sri Lanka where I work

Ø  Recognize the retention when staff Requiting

Ø  Provide ongoing education and clear paths to advancement

Ø  Offer competitive benefits

Ø  Invest in employee development

Ø  Show appreciation and respect

Ø  Promote work-life balance

 

List of References

Abegglen, J.C (1958). The Japanese Factory. Aspects of Its Social Organization. Free Press. Glencoe. IL.

Acto, T. (2003). training practices in Irish software companies.

Agarwal, N.C. (1998). “Reward Systems: Emerging Trends and Issues”. CanadianPsychology, 39(1), 60-70.

Baker, E. (2006). The human factor. CIO Insight.

Baruah, D. M. (2013). Employee Retention: A Review of Literature.

 

Chung-Hsiung Fang, Sue-Ting Chang, Guan-Li Chen (2009) “Applying Structural Equation Model to Study of the Relationship Model among leadership style, satisfaction, Organization commitment and Performance in hospital industry”.

Davies, D., Taylor,R., Savery, C (2001). “The role of appraisal, remuneration and training in improving staff relations in the Western Australian accommodation industry: A comparative study”. Journal of European Training, 25 (6/7). 366-373.

Feldman, D.C., & Arnold, H.J., (1983). Managing Industrial and Group Behaviour in Organizations McGraw-Hill, New York, p. 192.

Fitz-enz, J. (1990).Getting and keeping good employees. In personnel. 67(8): 25-29.

GBEREVBIE, D. E. (2008). STAFF RECRUITMENT, RETENTION STRATEGIES AND.

Hewitt, P. (2002). High Performance Workplaces: The Role of Employee Involvement in a Modern Economy. www.berr.gov.uk/files/file26555.pdf

Hyman, J. and Summers, J. (2004), “Lacking balance? Work-life employment practices in the modern economy”, Personnel Review, Vol. 33, pp. 418-29.

Maertz & Campion (1998). Longitudinal Assessment of Applicant Reactions to Employment Testing.

Messmer, M. (2000). Orientations programs can be key to employee retention. In Strategic Finance. 81 (8):12-15.

 Moncraz, E., Zhao, J., and Kay, C. (2009). An exploratory study on US lodging properties’, organizational practices and employee turnover and retention. International Journal of Contemporary Hospitality Management, 21 (4). 437-458.

Panoch, A. (2001). THE RELATIONSHIP BETWEEN DIVERSITY.

Prince, B.J. (2005). Career-focused employee transfer processes. Career Development International, 10(4), 293-309.

Rain, JS, Lane, IM & Steiner, D.D. (1991) .A current look at the job satisfaction/ life satisfaction relationship: Review and future considerations. Human Relations.p. 44, pp. 287-307.

Silbert, L.T. (2005). The effect of Tangible Rewards on Perceived Organizational Support. Management Sciences.

Walker, J.W. (2001). “Perspectives” Human resource planning.24 (1):6-10.

Wells, M., & Thelen, L. (2002) “What does your workspace say about you? The influence of personality, status and workspace on personalization.” Environment and Behavior, 3: 300-321