RETENTION

RETENTION

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For an organization to perform successfully its need to keep the best employ on board. This is the goal of employee retention and needs to have continued efforts to retain their employees

Source -Organizational Culture: Definition, Importance, and Development - Engage Blog (achievers.com)

 Retention is often expressed as statistics

 Source - https://resources.workable.com/hr-terms/what-is-employee-retention
 

 

Employ retention strategy is the practice an organization follows to retain its staff by minimizing the turnover

Source -https://visual.ly/community/Infographics/business/employee-retention-5-tips-keeping-your-best-employees

 REASON WHY RETENTION SO VITAL FOR AN ORGANIZATION

              1) To   have sustain productivity

·         Who works for a long period in a workplace adds significant value for an organization with all important skills, knowledge acquired, throughout. They’re also a deep level of understanding of the company vision too.

2) Reduce employee cost

·         Recruiting, onboarding new staff, and training for them are expensive and time-consuming.

 3) Reduce training time

·        Existing staff are highly trained and carry out their daily responsibilities confidently. Strong communication channels already established the entire team and know how to deliver the service on time. However new members need more training and time to establish proper communication with the team.   

 

 Strategies to retain employees

Areas usually focus on preparing employee retention strategies and processes to be followed,

·        Compensation & benefits

         ·        A nice working environment

                  ·        Training and career development

·        Clean communication

Retaining the top talents and Role of HRM in global Talent Management.

Retaining of top talents in an organization is very crucial in a globalized market place which always give huge pressure on the HRM. Talent is the word to use explain an employees’ performance and the term ‘’top talent’’ is described as something as ‘’valuable, rare and hard to imitate”, and such talent leads to exceptional performance (Govarts, Kyndt, Dochy & Baert, 2011)

As top talented workforce record high returns retaining these high performers is a “source of advantage for an organization” (Sigler, 1999, p. 1). Since the top talents make a huge positive impact on the progress of an organization while enabling it to have a competitive advantage over the competition, retaining top talent became a major concern of any successful organization.

Leaving top talent from an organization is a direct loss of investment (Govarts et al., 2011).This employee Turnover cost can be segregated into two categories as Direct and indirect. Direct cost includes advertising, temporary cover over-time fresh interviews, induction training, and other related expenses. Indirect costs include Loss of knowledge and competencies, loss or reduced productivity, new competitive pressure, designing training programs, organizing interviews, etc… and difficulty to quantify the actual cost incurred on most of the occasions.

Further challenges due to the top talent resigning are the fact that their exit could also lead to other employees’ tent to leave the organization. HRM has to investigate the push and pull factors that influence the decision to resign and also to discuss the impact of trying to retain top talents who are considering resigning such as the possibility of demanding salary increments, not complying with organizational practices, or interacting well with management. Hence it is very vital to understand the motivating factors to retain such an important segment of employees for the betterment of the entire organization. Considering the above, HRM should introduce a proactive policy of employee retention, rather than incurring preventable expenses of employee turnover.

Taylor (2014). Segregates employee turnover into push and pull elements. Job satisfaction with a present employer has been considered as a push factor whereas the pull factor describes another organization offering a more attractive package. According to Author  “the number one reason that employees choose to leave a company is that their managers fail to lead” Jacobs (2007) validates these findings and highlights that successful retain is fulfill by seven factors

1. Management that listens

2. Regular communications and feedback

 3. Involved staff

 4. Competitive compensation

5. Clear vision

 6. Training

7. Fun workplace

 

If HRM fails to lead, create each of the above important factors will be affected. Therefore leadership skills and style of management of supervisors and line management play an important part and substantial impact on the job satisfaction of the subordinates. Since HR management plays a critical role in the entire area of employee turnover, understanding and applying the different styles of leadership topmost importance in today’s globalized business world.  

 

Motivational Theories

“Motivation is an internal force, dependent on the needs that drive a person to achieve” (Teck-Hong, & Waheed, 2011).

In order to identify how to motivate and retain these top talented employees in today’s business context, this literature review explores motivation theories and characteristics of the same. Motivation theories explain workforce behaviors and their attitudes towards organizational objectives and the carrier progress. Hence it is worth discussing and explaining these theories to get to know work motivations within globalization and employees. 

There are four commonly discussed motivational theories such as

 

1. Theory X and Theory Y

 Theory X- makes an assumption that people are lazy and always try to push people to work.

 Theory Y- makes an assumption that people are positive towards work assuming people are always want to work.

 

 2. Maslow’s hierarchy of needs

 

Maslow’s hierarchy of needs describes that there are 5 levels of needs that need to be fulfilled in motivating employees.  Therefore this model could be used all over the world to motivate employees. According to Maslow when esteem needs and self-actualization needs have not been fulfilled the level of motivation is questionable.

Figure: Maslow's hierarchy of needs. (McLeod, 2007).

 

3. Expectancy Theory of Motivation

 

As the employees tend to work willingly when they are motivated it would increase the organizational performance in a sustainable manner.

 

Figure: Expectancy theory of motivation   (Value based management, 2018).

 

Motivation = Expectancy x Instrumentality x Valence

Expectancy refers to the ‘’Effort-performance ‘’relation and the perception of the person is that the effort will have actually resulted reaching the   in the ‘’performance”

Instrumentality describes a "performance-reward" connection. The individual evaluates the probability that reaching the performance level will actually result in the acquiring of the reward. Valence is the value that the individual engagement with the outcome (reward). Hence leaders must discover and offer what the employees value. (Bass & Bass, 2008).

Analysis of the Expectancy Theory

 

Motivation is the vital factor that tremendously influences the workforce resulted in the desired performance. With the globalization impact, Human Resources and especially the top talents have become the competitive advantage over the global completion. Hence it will be a huge challenge to onboard the right people for the job but the real challenge is to retain the top talent in today’s business context.

 

4. Herzberg’s motivator/ hygiene factors

The theory consists of two categories: such as hygiene factors- that switch people off and, motivators factors -that make people feel good.

This theory describes that some factors related to the job have a short-listing motivation or could drive to dissatisfaction whereas other factors generate long-lasting motivation towards their job. This report intends to identify what are the factors that derive dissatisfaction in order to discover the way to motivate and improve job satisfaction and to identify the impact of same for the top talented employee in the organization. 

 

 

Herzberg’s Hygiene factors include

· Company policy

· Supervision

· Working conditions

· Salary

· Relationship with peers

· Personal life

· Status

· Security

 

Motivators include:

· Achievement

· Recognition

· Work itself

· Responsibility

· Advancement

· Growth

 

It is learned that low job satisfaction is leading top talents to tender resignations from the workplace and it is worth applying Herzberg’s theory to evaluate job satisfaction level which influences these decisions to resign. According to the theory, it is worth exploring further to understand the factors that impact job satisfaction levels:

Working environment,

The working environment plays a vital role in job satisfaction an important tool for recruitment and retention of top talent. Further, the working environment is highly contributing towards the employee’s engagement on performance. There is a positive interconnection between employee engagement and performance, leading to optimum service to customers. Engaged employees are always performed beyond the expected level which required an organization to stay ahead of the competition. The working environment and the culture that the workforce experiences influence their behavior on the job and focus their level of satisfaction.

 

Relationship with management,

According to Bagga (2013) “around a third of people who leave their jobs cite the behavior of their immediate supervisor as the reason”

Hence the HRM is with the responsibility of having a management team with good leadership qualities to handle the top talents in an organization who serve as mentors to get the maximum results while ensuring low staff turnover. They have to gain trust and the respect that bring employee with them to accomplish the organizational objectives and goals. Leadership qualities have a direct impact and influence how employees behave in an organization and therefore impact the overall performance of the company and employees’ decision to stay or leave. If the management does not focus on an employees’ career and investment in their development genuinely, it will be demotivated the top talents which will impact both individual and company performance. The level of job satisfaction of an employee will be affected due to the leadership style of the management.

In addition to these leadership impacts on satisfaction and performance tow way democratic communication also plays an important role in employee motivation. Acknowledging and giving feedback is one of the ways of rewarding staff and happen them realize valued and appreciated. In order to understand what is important to employees and what they need to do differently to improve their own performance receiving feedback from the management is vital and handling those feedbacks in fare and proper way is very much needed to have optimum results.

The following are various styles and types of leadership styles which Armstrong outlines(2012):

· Coercive – demands compliance

· Authoritative – uses their position to instruct to mobilize people

·Affiliative – motivates people and creates harmony

· Democratic – get input from a collective group to build agreements

· Pacesetting – sets high results

· Coaching – develops people

 

Armstrong (2012) explains a functional leader as someone who has clear idea on what they need to achieve, reflects confidence to lead the way, and brings people with them by earning respect. An effective leader has a strong degree of emotional intelligence to motivate teams and adapt their communication style in response to the situation (Armstrong, 2012).

With the effect of globalization, responsibility of retention of top talent should be partly shifted to the each department level to have good results. HRM should focus on policies and practices that have impact on working conditions, compensation, communication, and career progression in the workplace. In addition to the above leadership style of individual management, members to be revisited and proper training and workshops to be arranged in order to lead the teams towards the organizational objectives while motivating the top talent to reach their maximum performance level with high job satisfaction. With these initiatives, the organization will be able to retain its top talents with them to have sustainable growth in the business despite the huge competition and challenges due to globalization.

 

Career Development

When considering the retaining of the top talent in an organization, career development opportunities for employees represent a major part of today’s organization and social context. Hence, HRM should introduce clear career paths, personal development plans based on the performance, competencies, and commitment of an employee. This process creates the path for an organization to retain its top talent as they always searching for new opportunities with more expectations to fulfill their individual goals. 

Since career prospects are the vital motivation for employees, HRM should create this room to retain strong performers.

 

Reward and Recognition.

Job security and employee benefits are more important factors contributing to job satisfaction and arrest future quits up to a substantial level. Rewards and recognition are two different elements and need to discuss this to have better results.

Rewards gives strong massage and signify what an organization stands for and it is different from one organization to another. Main three components of the rewards are Financial, Material and Psychological,

Financial Rewards

Organization should offer better compensation and benefit package over the salary and that is on par or finer than the market. Further it is important that the employer to have dialogs with employees to ensure that the package offered are valued by them. Performance-based incentives which avail with appropriate weights on different performance aspects and proper evaluation process and methodology encourage talented employees to stay in the organization. This initiative creates an opportunity to identify objectively who are the top talents as well as who are the underperforming employee in the organization.

Non-Financial Rewards

The reward that has a direct cost to an organization but is unable to exchange for their monitory value describe as non-financial rewards. Such as training opportunities, improvements in the working environment, career progression opportunities.  

Recognition

Rose (2014) defines recognition as “a process of acknowledging or giving special attention to a high level of accomplishment or performance” It can be financial or non-financial and recommends that recognition should be done on the spot or in a timely manner in order to motivate the performer. Recognition motivates employees and makes people feel valued and recognized regardless of the value of the same.

As discussed earlier, irrespective of the cost of these total reward schemes retaining top talents costs less than replacing them and organizations should consider attractive packages that give high returns despite challenges due to globalization. The main objective of this scheme is to maintain mutual respect between the organization and its top performers.

Considering the above facts which we have discussed in detail HRM role is a very challenging highly globalized business environment and topmost required to be proactive and creative when arranging packages to maintain competitive advantage.

It is learnt within this literature review that top performers contribute substantially to improve organizational performance. Hence the demand to recruit and retain top talented workforce has become a challenging topic of concern for Human Resource Management. The employee’s satisfaction level is the key factor to the performance of the organization. This review indicates motivating factors to be focused on to determine how best to retain these top talents. There are different motivational theories to evaluate the reasons for which drive the top talents to leave an organization.

 

 

 

 

References 

Recruiting Resources: How to Recruit and Hire Better. (2019). What is employee retention? [online] Available at: https://resources.workable.com/hr-terms/what-is-employee-retention [Accessed 7 Dec. 2021].

·     Govaerts, N., Kyndt, E., Dochy, F. and Baert, H. (2011) ‘Influence of learning and working climate on retention of talented employees’. Journal of Workplace Learning, 23 (1), pp. 35- 55.

     Sigler, K.J. (1999) ‘Challenges of employee retention’. Management Research News, 22(10), pp. 1- 5.

·   Jacobs. K.(2007) ‘The rewards of retention: Retaining your best and your brightest’. Public Relations Tactics, (14) 8, pp. 18– 20

·  Bagga, G. (2013) ‘How to keep the talent you have got’. Human Resource Management International Digest, 21 (1), pp. 3- 4.

Ar  Armstrong, M. (2004). A Handbook of Human Resource Management Practice, South Asian Published

·  Teck-Hong, T. and Waheed, A. (2011) ‘Herzberg’s motivation-hygiene theory and job satisfaction in the Malaysian retail sector: the mediating effect of love of money’. Asian Academy of Management Journal, 16 (1), pp. 73- 94.

 Top 10 Employee Retention Strategies in 2020 -  Vantage Circle- YouTube. Available at: https://youtu.be/z42UZpE5jys [Accessed 06 Dec. 2021].