Retention Management

Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time. Every organization invests time and money to groom a new joinee, make him a corporate ready material and bring him at par with the existing employees. The organization is completely at loss when the employees leave their job once they are fully trained. Employee retention takes into account the various measures taken so that an individual stays in an organization for the maximum period of time.

Importance of Retention Manage Employee Turnover

Employers implement retention strategies to manage employee turnover and attract quality employees into the organization. Retention programs focus on the relationship between management and their workers. Competitive pay, benefits, employee recognition and employee assistance programs are all apart of a company's attempt to maintain employee satisfaction. Human resources specialists utilize feedback they receive from exit interviews and focus groups to improve employee relations and reduce turnover.

Cost-Effective

A company can significantly benefit from employee retention programs because of a direct effect on an employer’s bottom line. High turnover can be very expensive. According to the Society for Human Resources Management, “employee replacement costs can reach as high as 50 to 60 percent of an employee’s annual salary. ” Strategies geared towards retaining good workers helps offset employee replacement costs and reduces the indirect costs such as decreased productivity and lost clients. Maintain Performance And Productivity Employee retention practices help support an organization’s productivity.

Recruiting and training new employees takes time. An unfilled position means work is not getting done. Even if a position is filled, there is still a learning curve most employees must overcome before their work becomes profitable. Taking the necessary steps to keep current workers satisfied with their roles will ensure productivity is not interrupted. Enhances Recruitment Effective retention strategies often begin during the employee recruitment process. Employees are more inclined to remain with a company that fulfills the promises made when their employment offer was extended.

Companies that provide a realistic view of their corporate environment, advancement opportunities and job expectations to new hires can positively influence employee retention. Increases Morale Employees that enjoy what they do and the atmosphere in which they work are more likely to remain employed with their company. Retention strategies are important because they help create a positive work environment and strengthen an employee’s commitment to the organization. Strategies that target employee engagement, such as team-builders and community involvement, increase company morale and give employees a sense of pride in what they do.

The procedure of Retention Management

The procedure of retention management consists of six steps:

1. Identification of the target and actual needs of the staff
2. Analysis of the fluctuation risk of the staff
3. The Analysis of factors of Motivation/Demotivation of the retention group
4. Identification of the targeted measures
5. Implementation of the measures
6. Evaluation of the measures

Step 1: Identification of target and actual needs of the staff The starting point is the corporate strategy and business objectives. The product, market or organisational goals of the company can help to identify strategic staffing needs and the strategic relevant skills of employees.

Step 2: Analysis of the fluctuation risk of staff In step 2, the HR manager is interested in the degree of the fluctuation risk. First, it is important, to analyse the common portfolio of the potentials and performance of the employees. In large companies, this could be done through a management audit. In small businesses this can be clarified with an employee interview. This gives the manager information about the power structure in the relevant group. But this information is not enough to estimate the probability of fluctuation. It is also necessary to consider the demand for the relevant skills in the labor market. When a manager combines the results of the analysis he can identify three risk categories, which would cause a priority for the retention management:  Those employees, who are in great demand in the labor market and who have a high capacity, are the key target group for retention management measures. * Those employees, who perform well and whose skills are somewhat in demand in the labor market, have a mean fluctuation risk. Depending on the corporate strategy they are the second important target group for retention management measures.  Employees that have skills that exist in large numbers in the labor market and who also who perform well are currently not a relevant retention target.

Step 3: Analysis of factors of Motivation/Demotivation of the retention group Now motivators and demotivators must be found in the identified retention target group. The motivators must be taken into account and demotivators must be removed with the help of appropriate measures, to ensure that the employees develop affective commitment. Motivators and demotivators can be estimated from the outcome of questionnaires. Subsequently a Motivation/Demotivation profile of the retention target group should be formed.

Step 4: Identification of the targeted measures .The various measures of human resource management relate to different motivational factors. These connections can be used to create a specific matrix in which the action areas of personnel management and appropriate measures will be brought together with the motivational factors.

Step 5: Implementation of the measures After the analysis measures will be implemented. Here are some important aspects: Conceptual foundations: The measures must be defined and applied according to clear rules, in this context ad hoc measures lead only to short-term success with negative cultural impact.  Cultural fit: Measures must be in accordance with the corporate culture and the existing Management tool system For example, a variable compensation system makes little sense without a performance appraisal system!  Marketing personnel action: The application of the measures must be accompanied by internal communication. Only then the efforts of a retention manager will be perceived! Retention factors: By the design and implementation of retention management policies respect and transparency must be taken into account. Only when these measures convey these values, they will have great influence!

Step 6: Evaluation of the measures After the implementation of the measures it is necessary to assess the success of the activities. This can be achieved by comparing the results to the objectives that were set in the retention management strategy. After the expiry of the defined period and after application of the retention policies the manager can check how the objectives were achieved.

For example, if the objective was that 80% of the defined strategically relevant staff should be in business at time X, then the manager can determine whether this ratio was reached at time X, and whether it was exceeded or not exceeded. From this statement the manager can derive new measures and draw conclusions about the practice of the concept of retention management. Important conditions for the success of retention management are on the one hand, human resource management in the company, and on the other hand project management of the implementation of retention management.

Determinants of Retention Career Development Opportunities

Career development is a system which is organized, formalized and it’s a planned effort of achieving a balance between the individual career needs and the organization’s workforce requirements (Leiboiwitz et al, 1986). The rapidly growing awareness makes it obvious that people can give the firm its leading edge in the market place. The new challenge for the HR professionals is to identify the developmental strategies which can inspire the commitment of employees to the firm’s mission and values so that the employees become motivated and help the firm to gain and maintain a competitive advantage (Graddick, 1988).

A company that wants to strengthen its bond with its employees must invest in the development of their employees (Hall ;amp; Moss, 1998; Hsu, Jiang, Klein ;amp; Tang, 2003; Steel et al. , 2002; Woodruffe, 1999). It entails in creating opportunities for promotion within the company and also providing opportunities for training and skill development that let employees to improve their employability on the internal and/or external labour market (Butler ;amp; Waldrop, 2001). Growth opportunities which were offered by the employers are reduced due to turnover intentions of employees because the lack of training and romotional opportunities was the main cause for high-performers to leave the company (Allen, Shore ;amp; Griffeth, 2003; Steel et al. , 2002). Career development is important for both the organization and individual (Hall, 2002). It’s a mutual benefit process because career development provides the important outcomes for both parties (Hall, 1996; Kyriakidou and Ozbilgin, 2004). Organizations need talented employees for maintaining the sustainable competitive advantage and individuals require career opportunities to develop and grow their competencies (Prince, 2005).

Supervisor Support

One of the most important factors that have impact on retention is the relationship between a worker and a supervisor. Supervisors are the “human face” of an organization. According to Eisenberger and associates (1990), a worker’s view of the organization is strongly influenced by their relationship with their supervisor. By having support, workers are less likely to leave an organization and be more engaged by having good relationship and open communication with the supervisor (Greenhaus, 1987).

Supervisors interact as a link to practice applications among stated goals and expectations. By harmonizing the competing demands, they support in managing both inside and outside the work environment. If the relationship does not exceed then employee will seek to any other opportunity for new employment and vice versa. The supervisor support is so essential to retention that it can be said that employees leave bosses, not jobs. Organization must groom supervisors to well build the place where employees want to stay. Providing each level of performance and opportunities can enhance their capabilities to work.

Work Environment

Numerous studies have attempted to explain work environment in various areas such as for example employee turnover job satisfaction employee turnover, job involvement and organizational commitment. Work environment is one of the factors that affect employee’s decision to stay with the organization. Hytter (2008) analyzed that work environment has commonly been discussed by industrial perspective, i. e. ith a focus on physical aspects such as, heavy lifts, noise, exposure to toxic substances etc. The interesting part is; characteristics of work environment vary in services sector as compare to production sector because it has to interact with the clients/consumers (Normann 1986). Depending on the kind of business and kind of job, interactions will be more or less frequent and more or less intense. The interaction between employees and consumer/client hence demands a move of focus from the physical to the Psycho social dimension of work environment.

Psycho social work environment includes support, work load, demands, decision latitude, stressors etc. It’s very important to recognize the emerging needs of individuals to keep them committed and provide the work environment as necessitate (Ramlall, 2003). Milory (2004) reported that people enjoy working, and strive to work in those organizations that provide positive work environment where they feel they are making difference and where most people in the organization are proficient and pulling together to move the organization forward.

The term ‘reward’ is discussed frequently in the literature as something that the organization gives to the employees in response of their contributions and performance and also something which is desired by the employees. A reward can be extrinsic or intrinsic it can be a cash reward such as bounces or it can be recognition such as naming a worker employee of the month, and at other times a reward refers to a tangible incentive, reward is the thing that an organization gives to the employee in response of their contribution or performance so that the employees become motivated for future positive behavior.

In a corporate environment rewards can take several forms. It includes, cash bonuses, recognition awards, free merchandise and free trips. It is very important that the rewards have a lasting impression on the employee and it will continue to substantiate the employee’s perception that they are valued. Rewards are very important for job satisfaction because it fulfills the basic needs as well as helps to attain the higher level of goals. Earnings is the way by which worker get to know that how much they are gaining by dedicating their time, effort and skills in a job.

Attractive remuneration packages are one of the very important factors of retention because it fulfills the financial and material desires as well as provide the means of being social by employee’s status and position of power in the organization. Many researchers demonstrate that there is a great deal of inter-individual difference in understanding the significance of financial rewards for employee retention. An organization’s reward system can affect the performance of the employee and their desire to remain employed.

Work-Life Policies

Many researchers tested the impact of work and family benefits which comprise of flexible schedules, childcare assistance, parental leave, childcare information and parental leave on organization commitment. Researches showed that there is greater organizational commitment if employees had access to work life policies and also these employees articulated considerably with lower intent to renounce their profession. Today a major concern in business is Workplace flexibility. The one thing becomes very clear that money alone is not enough; employees are willing to trade a certain amount of money for reduced work hours in their schedules.

It is argued by the researchers that reduced work hour options should have the potential of win-win situation for both individuals and organizations, there should be a fit between the schedule the person needs and the actual number of hours worked. Distress and fatigue from excessive time on job can lead to decline in performances of the employee and also it affects the safety level. A large amount of time at work is not a good predictor of productivity and it is observed that periods of time away from work can be extremely beneficial to the quality and productivity of a person’s work.

The employee willingness to opt for reduced –hours schedules is not simply a matter of scheduling it involves redesigning work arrangements which leads to change in organization culture and careers, viable reduced-hours career options require simultaneous changes in the areas of compensation, assignments and promotions. So it is more cost-effective and productive for management to design the work arrangements to fit the human than it is force the human to fit the system (Barnet ;amp; Hall, 2001).

By applying work-life course of actions, an organization can enhance its ability to respond to demands of customers for better access to services and also the tactics for the organizations to deal with the revolutionized way in order to satisfy both employees and employers .

Absenteeism

Absenteeism is a serious workplace problem and an expensive occurrence for both employersand employees seemingly unpredictable in nature. A satisfactory level of attendance byemployees at work is necessary to allow the achievement of objectives and targetsby a department. Employee Absenteeism is the absence of an employee from work.

It is a major problem faced by almost all employers of today. Employees are absentfrom work and thus the work suffers. Absenteeism of employees from work leads toback logs, piling of work and thus work delay. Absenteeism is of two types . Innocent absenteeism - Is one in which the employee is absent from workdue to genuine cause or reason. It may be due to his illness or personalfamily problem or any other real reason. Culpable Absenteeism - is one in which a person is absent from workwithout any genuine reason or cause. He may be pretending to be ill or justwanted a holiday and stay at home.

Many employees will, on occasions, need a few days off work because of illness, however, whenabsences become more frequent or long term and reach an unacceptable level, action bymanagement is necessary. Absence from work can be expensive in both monetary and humanterms. The costs incurred when an employee is absent from work may include: Replacing the employee or requiring other staff to cover the absence; Inability to provide services, or achieve section and departmental objectives;Low morale and general dissatisfaction from other staff, particularly if the absence is

High absenteeism in the workplace may be indicative of poor morale, but absences can also be caused by workplace hazards or sick building syndrome. Many employers use statistics such as the Bradford factor that do not distinguish between genuine illness and absence for inappropriate reasons. As a result, many employees feel obliged to come to work while ill, and transmit communicable diseases to their co-workers. This leads to even greater absenteeism and reduced productivity among other workers who try to work while ill.

Work forces often excuse absenteeism caused by medical reasons if the worker supplies a doctor's note or other form of documentation. Sometimes, people choose not to show up for work and do not call in advance, which businesses may find to be unprofessional and inconsiderate. This is called a "no call, no show". According to Nelson & Quick (2008) people who are dissatisfied with their jobs are absent more frequently. They went on to say that the type of dissatisfaction that most often leads employees to miss work is dissatisfaction with the work itself.

The psychological model that discusses this is the "withdrawal model", which assumes that absenteeism represents individual withdrawal from dissatisfying working conditions. This finds empirical support in a negative association between absence and job satisfaction, especially satisfaction with the work itself. Medical-based understanding of absenteeism find support in research that links absenteeism with smoking, problem drinking, low back pain, and migraines. Absence ascribed to medical causes is often still, at least in part, voluntary.

Research shows that over one trillion dollars is lost annually due to productivity shortages as a result of medical-related absenteeism, and that increased focus on preventative wellness could reduce these costs.  The line between psychological and medical causation is blurry, given that there are positive links between both work stress and depression and absenteeism.  Depressive tendencies may lie behind some of the absence ascribed to poor physical health, as with adoption of a "culturally approved sick role".

This places the adjective "sickness" before the word "absence", and carries a burden of more proof than is usually offered. Evidence indicates that absence is generally viewed as "mildly deviant workplace behavior". For example, people tend to hold negative stereotypes of absentees, under report their own absenteeism, and believe their own attendance record is better than that of their peers. Negative attributions about absence then bring about three outcomes: the behavior is open to social control, sensitive to social context, and is a potential source of workplace conflict.

Thomas suggests that there tends to be a higher level of stress with people who work with or interact with a narcissist, which in turn increases absenteeism and staff turnover . Employee turnover is the process of replacing one worker with another for any reason. A turnover rate is the percentage of employees that a company must replace within a given time period. This rate is a concern to most companies because employee turnover can be a costly expense, especially for lower-paying jobs, which typically have the highest turnover rates. Having n employee leave a company, either because of his or her choice or after being fired or otherwise let go, might require various administrative tasks to be performed and severance pay or other payments made to the employee. Replacing the employee might require such things as advertising the open position, using a so-called headhunter or other service to find potential job candidates, bringing in candidates for interviews and eventually training the new employee. Types Of Turnover The two general types of turnover are voluntary and involuntary.

Voluntary turnover is when the employee chooses to leave for whatever reason. Involuntary turnover is caused by layoffs and similar actions where the decision for an employee to leave is made by the company and not the employee. As a general rule, voluntary turnover is the measure used to discuss and compare employers. It is the type most directly affected by the front line supervisors. Involuntary turnover, caused by layoffs, can be a long-term result of high levels of voluntary turnover.

What Is Turnover Rate

Turnover rate is a calculation of the number of employees who have left the company and it is expressed as a percentage of the total number of employees. Although turnover rate is usually calculated and reported as a percentage per year it can be for different periods. How to prevent turnover Employees are important in any running of a business; without them the business would be unsuccessful. However, more and more employers today are finding that employees remain for approximately 23 to 24 months, according to the 2006 Bureau of Labor Statistics.

The Employment Policy Foundation states that it costs a company an average of $15,000 per employee, which includes separation costs, including paperwork, unemployment; vacancy costs, including overtime or temporary employees; and replacement costs including advertisement, interview time, relocation, training, and decreased productivity when colleagues depart. Providing a stimulating workplace environment, which fosters happy, motivated and empowered individuals, lowers employee turnover and absentee rates. 10] Promoting a work environment that fosters personal and professional growth promotes harmony and encouragement on all levels, so the effects are felt company wide.  Continual training and reinforcement develops a work force that is competent, consistent, competitive, effective and efficient. Beginning on the first day of work, providing the individual with the necessary skills to perform their job is important.

Before the first day, it is important the interview and hiring process expose new hires to an explanation of the company, so individuals know whether the job is their best choice. Networking and strategizing within the company provides ongoing performance management and helps build relationships among co-workers. It is also important to motivate employees to focus on customer success, profitable growth and the company well-being . Employers can keep their employees informed and involved by including them in future plans, new purchases, policy changes, as well as introducing new employees to the employees who have gone above and beyond in meetings. Early engagement and engagement along the way, shows employees they are valuable through information or recognition rewards, making them feel included. When companies hire the best people, new talent hired and veterans are enabled to reach company goals, maximizing the investment of each employee. Taking the time to listen to employees and making them feel involved will create loyalty, in turn reducing turnover allowing for growth.

Attrition

Attrition or Employee Attrition is a voluntary reduction in an organization’s manpower through resignations or retirements. A high attrition rate causes a high employee turnover in an organization, reducing quantity and quality of an organization’s manpower.

This in turn causes a huge expenditure on human resource, by contributing towards repeated acquisition, training and development, and performance management. Attrition or voluntary turnover, although undesirable to any firm, is not completely avoidable. Yet, by improving employee morale and providing a satisfactory working environment, this problem can be nullified to a greater extent. A major cause for voluntary turnover is uninteresting and unchallenging job that offers boredom rather than enthusiasm for employees. Employees who experience boredom at work usually try exploring alternatives to make their work life happier.

An easy track to retain these employees is by adopting some sort of job shift through job enrichment, empowerment, de-jobbing, or job rotation. There is also a great impact from the working environment that an organization offers to its employees. An unhappy employee with organizational culture, superiors, subordinates, or even customers cause high attrition rate to that organization. These employees can also influence his peers and subordinates by sharing their feelings and opinion. There is also another group of employees who hunt for better alternatives and hop as they get one.

They are a reasonable way of obtaining relevant information, though response rates are often disappointing. Questionnaires need to be designed carefully to be effective. They should be easy to use, anonymous and fairly brief. Questions can be open or closed, multiple choice answers, ranking of items or checklist format. 2. Exit Interviews : Exit interviews are used by the majority of companies. They tend to be conducted just before an employee leaves, though some firms wait until after the departure. Exit interviews will normally to be done in the form of a questionnaire, though one to one interviews are also used.

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Retention Management. (2018, May 05). Retrieved from https://phdessay.com/retention-management/

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