EMPLOYEE RETENTION IN PRIVATE SECTOR

DISSERTATION REPORT

2010

Submitted for the partial fulfillment of the requirement for the award

Of

POST GRADUATE DIPLOMA IN MANAGEMENT

SUBMITTED BY

ANANYA DUBEY

8007

UNDER THE SUPERVISION OF

INTERNAL: NIKUNJ AGARWAL

DEPARTMENT OF MANAGEMENT

INSTITUTE OF MANAGEMENT EDUCATION,

SAHIBABAD
 CERTIFICATE

This is to certify that the dissertation entitled (employee retention in public

sector) and submitted by (Ananya Dubey) having roll no. 8007 for the partial
fulfilment of the requirements of PGDM (batch), IME, embodies the bonafide
work done by her supervision.

Signature of guide

Place:

Date:
 ABSTRACT

Employee retention is a process in which the employees are encouraged to

remain with the organization for the maximum period of time or until the
completion of the project. Employee retention is beneficial for the organization
as well as the employee. Employees today are different. They are not the ones
who don’t have good opportunities in hand. As soon as they feel dissatisfied
with the current employer or the job, they switch over to the next job. It is the
responsibility of the employer to retain their best employees. If they don’t, they
would be left with no good employees. A good employer should know how to
attract and retain its employees.

Most employees feel that they are worth more than they are actually paid. There
is a natural disparity between what people think they should be paid and what
organizations spend in compensation. When the difference becomes too great
and another opportunity occurs, turnover can result. Pay is defined as the wages,
salary, or compensation given to an employee in exchange for services the
employee performs for the organization. Pay is more than "dollars and cents;" it
also acknowledges the worth and value of the human contribution. What people
are paid has been shown to have a clear, reliable impact on turnover in
numerous studies.

Employees comprise the most vital assets of the company. In a work place
where employees are not able to use their full potential and not heard and
valued, they are likely to leave because of stress and frustration. In a transparent
environment while employees get a sense of achievement and belongingness
from a healthy work environment, the company is benefited with a stronger,
reliable work-force harbouring bright new ideas for its growth Blog Online And
Earn Money.
 ACKNOWLEDGEMENT

I am very grateful Mrs. Nikunj Agarwal for giving me the opportunity of

working in this project and give me useful instruction .

I extend my regards and sincere thanks to Dr. Taruna Gautam with who support
& effort, I completed my project.

Also I am thankful to the management and my fellow colleges for making my

project duration a memorable and fruitful one.

Ananya Dubey

(Post graduation diploma in management)

HR & I.T.

INSTITUTE OF MANAGEMENT EDUCATION

 CONTENTS

1. Introduction

• Need of the study

• Scope of the study
2. Research methodology

• Objective of the study

• Research methodology (Sample size, Instrument used, Methods of data

collection)

• Scope of the study

• limitations

6. Descriptive work

7. Data Analysis

8. Suggestion and Conclusions

9. Bibliography

10. References

11.Appendices

12. Checklist of the items in the project

 Introduction

Employee turnover is one of the largest though widely unknown costs an

organization faces. While companies routinely keep track of various costs such
as supplies and payroll, few take into consideration how much employee
turnover will cost them: Ernst & Young estimates it costs approximately
$120,000 to replace 10 professionals. According to research done by Sibson &
Company, to recoup the cost of losing just one employee a fast food restaurant
must sell 7,613 combo meals at $2.50 each. Employee turnover costs companies
30 to 50% of the annual salary of entry-level employees, 150% of middle-level
employees, and up to 400% for upper level, specialized employees. Now that so
much is being done by organizations to retain its employees.
Why is retention so important? Is it just to reduce the turn over costs ?
Well, the answer is a definite no. It’s not only the cost incurred by a company
that emphasizes the need of retaining employees but also the need to retain
talented employees from getting poached.

Retention involves five major things:

 Compensation
 Environment
 Growth
 Relationship
 Support

 Compensation:
Compensation constitutes the largest part of the employee retention process.
The employees always have high expectations regarding their compensation
packages.

Compensation packages vary from industry to industry. So an attractive

compensation package plays a critical role in retaining the employees.
Compensation includes salary and wages, bonuses, benefits, prerequisites, stock
options, bonuses, vacations, etc. While setting up the packages, the following
components should be kept in mind:
 Salary and monthly wage: It is the biggest component of the
compensation package. It is also the most common factor of comparison
among employees. It includes
• Basic wage
• House rent allowance
• Dearness allowance
• City compensatory allowance

Salary and wages represent the level of skill and experience an individual has.
Time to time increase in the salaries and wages of employees should be done.
And this increase should be based on the employee’s performance and his
contribution to the organization. Bonus: Bonuses are usually given to the
employees at the end of the year or on a festival. Economic benefits: It includes
paid holidays, leave travel concession, etc. Long-term incentives: Long term
incentives include stock options or stock grants. These incentives help retain
employees in the organization's start up stage.

 Health insurance: Health insurance is a great benefit to the employees. It

saves employees money as well as gives them a peace of mind that they have
somebody to take care of them in bad times. It also shows the employee that the
organization cares about the employee and its family.

 After retirement: It includes payments that an Employee gets after he

retires like EPF (Employee Provident Fund) etc.

 Miscellaneous compensation: It may include employee assistance

programs (like psychological counselling, legal assistance etc), discounts on
company products, use of a company cars, etc.

• Employers And Their Key Drivers To Attract And Retain Talent

• Employers Key Drives To Attract And Retain Talent

 Procter and Gamble India

• Early responsibilities in career
• Flexible and transparent organizational culture
• Global opportunities through a variety of exposure and diverse
experiences
• Performance Recognition

 American Express (India)

• Strong global brand
• Value-based environment
• Pioneer in many people practices

 NTPC
• Learning and growth opportunities
• Competitive rewards
• Opportunity to grow, learn and implement
• Strong social security and employee welfare performance- oriented
culture.
 Johnson & Johnson
• Strong values of trust, caring fairness, and respect within the organization
• Freedom to operate at work
• Early responsibility in career
• Training and learning opportunities
• Visible, transparent and accessible leaders
• Competitive rewards
• Innovative HR programs and practices

 Glaxo Smith Kline Consumer Healthcare

• Performance-driven Rewards
• Its belief in “Growing our own timber”
• Comprehensive development and learning programs
• Flat organization, where performance could lead to very quick
progression
• Challenging work context
• Competitive rewards
• Exhaustive induction and orientation program

 Tata Steel
• Organization philosophy and culture
• Job stability
• Freedom to work and innovate
 Colgate Palmolive India
• Company brand
• Open , transparent, and caring organization
• Management according to the managing with respect to guiding
principles
• Training ad development programs
• Structured career planning process
• Global career opportunities

 Wipro
• Company’s brand as an employer
• Early opportunities for growth
• High degree of autonomy
• Value compatibility
• Innovative people program

 Indian Oil Corporation

• Company brand image
• Work ethics
• Learning and growth opportunities
• Challenging work assignments
• Growing organization

 TCS
• The group brand equity
• Strong corporate governance and citizenship
• Commitment to learning and development
 • Best in people practices
• Challenging assignments
• Opportunity to work with fortune 500 clients
• Organization Environment

It is not about managing retention. It is about managing people. If an

organization manages people well, employee retention will take care of itself.
Organizations should focus on managing the work environment to make better
use of the available human assets. People want to work for an organization
which provides
• Appreciation for the work done
• Ample opportunities to grow
• A friendly and cooperative environment
• A feeling that the organization is second home to the employee
Organization environment includes
• Culture
• Values
• Company reputation
• Quality of people in the organization
• Employee development and career growth
• Risk taking
• Leading technologies
• Trust

Types of environment the employee needs in an organization

 • Learning environment: It includes continuous learning and
improvement of the individual, certifications and provision for higher
studies, etc.
• Support environment: Organization can provide support in the form of
work-life balance. Work life balance includes:
 Flexible hours
 Telecommuting
 Dependent care
 Alternate work schedules
 Vacations
 Wellness
• Work environment: It includes efficient managers, supportive co-
workers, challenging work, involvement in decision-making, clarity of
work and responsibilities, and recognition. Lack or absence of such
environment pushes employees to look for new opportunities. The
environment should be such that the employee feels connected to the
organization in every respect.
Growth and Career Growth and development are the integral part of
every individual’s career. If an employee can not foresee his path of
career development in his current organization, there are chances that
he’ll leave the organization as soon as he gets an opportunity. The
important factors in employee growth that an employee looks
for himself are:
• Work profile: The work profile on which the employee is working
should be in sync with his capabilities. The profile should not be too low or too
high.
• Personal growth and dreams: Employees responsibilities in the
organization should help him achieve his personal goals also.
 Organizations can not keep aside the individual goals of employees and
foster organizations goals. Employees’ priority is to work for themselves
and later on comes the organization. If he’s not satisfied with his growth,
he’ll not be able to contribute in organization growth.
• Training and development: Employees should be trained and given
chance to improve and enhance their skills. Many employers fear that if
the employees are well rained, they’ll leave the organization for better
jobs. Organization should not limit the resources on which organization’s
success depends. These trainings can be given toimprove many skills
like:
 Communications skills
 Technical skills
 In-house processes and procedures improvement related skills or
customer satisfaction related skills
 Special project related skills
Need for such trainings can be recognized from individual performance
reviews, individual meetings, employee satisfaction surveys and by being in
constant touch with the employees.
Importance of Relationship in Employee Retention Program
Sometimes the relationship with the management and the peers becomes the
reason for an employee to leave the organization. The management is
sometimes not able to provide an employee a supportive work culture and
environment in terms of personal or professional relationships. There are times
when an employee starts feeling bitterness towards the management or peers.
This bitterness could be due to many reasons. This decreases employee’s
interest and he becomes demotivated. It leads to less satisfaction and eventually
attrition. A supportive work culture helps grow employee professionally and
boosts employee satisfaction. To enhance good professional relationships at
work, the management should keep the following points in mind.
Respect for the individual: Respect for the individual is the must in the
organization.
• Relationship with the immediate manager: A manger plays the role of
a mentor and a coach. He designs and plans work for each employee. It is
his duty to involve the employee in the processes of the organization. So
an organization should hire managers who can make and maintain good
relations with their subordinates.
• Relationship with colleagues: Promote team work, not only among
teams but in different departments as well. This will induce competition
as well as improve the Relationship among colleagues.
• Recruit whole heartedly: An employee should be recruited if there is a
proper place and duties for him to perform. Otherwise he’ll feel useless
and will be dissatisfied.
Employees should know what the organization expects from them and what
their expectation from the organization is. Deliver what is promised. Promote an
employee based culture: The employee should know that the organization is
there to support him at the time of need. Show them that the organization cares
and he’ll show the same for the organization. An employee based culture may
include decision making authority, availability of resources, open door policy,
etc.
• Individual development: Taking proper care of employees includes
acknowledgement to the employee’s dreams and personal goals. Create
opportunities for their career growth by providing mentorship programs,
certifications, educational courses, etc.
• Induce loyalty: Organizations should be loyal as well as they should
promote loyalty in the employees too. Try to make the current employees
stay instead of recruiting new ones.
Support Lack of support from management can sometimes serve as a reason for
employee retention. Supervisor should support his subordinates in a way so that
each one of them is a success. Management should try to focus on its employees
and support them not only in their difficult times at work but also through the
times of personal crisis. Management can support employees by providing them
recognition and appreciation. Employers can also provide valuable feedback to
employees and make them feel valued to the organization.

The feedback from supervisor helps the employee to feel more responsible,
confident and empowered. Top management can also support its employees in
their personal crisis by providing personal loans during emergencies, childcare
services, employee assistance Programs, conseling services, etc
Employers can also support their employees by creating an environment of trust
and inculcating the organizational values into employees. Thus employers can
support their employees in a number of ways as follows:
• By providing feedback
• By giving recognition and rewards
• By counseling them
• By providing emotional support
 RESEARCH METHODOLOGY

Research Design:

The research design indicates the type of research methodology under taken to
collect the information for the study.
The researcher used both descriptive and analytical type of research design for
his research study. The main objective of using descriptive research is to
describe the state of affairs as it exits at present. It mainly involves surveys and
fact finding enquiries of different kinds. The researcher used descriptive
research to discover the characteristics of customers. Descriptive research also
includes demography characteristic of consumer who use the product.
The researcher also used analytical research design to analyze the existing facts
from the data collected from the customer.

Area of study:
The area of study is confined to employees of GEMINI COMMUNICATION
LTD,Chennai.

Research instrument:

The Structured questionnaire is used as the research instrument for the study.

Questionnaire Design:

The questionnaire framed for the research study is a structured questionnaire in

which all the questions are predetermined before conducting the survey. The
form of question is of both closed and open type.
The scales used to evaluate questions are:
• Dichotomous scale (Yes or No)
• Likert 5 point scale (Highly satisfied, satisfied, Neither Satisfied nor
dissatisfied, Dissatisfied, Highly dissatisfied)
• Category scale (Multiple items)
• Ranking type (R1, R2, R3…)

The questionnaire for the research was framed in a clear manner such that it
enables the respondents to understand and answer the question easily. The
questionnaire was designed in such a way that the questions are short and
simple and is arranged in a logical manner.

Pilot study:

It is appropriate to conduct pilot survey to check the reliability of the

questionnaire. So pilot study was conducted on 5 respondents which is a 10% of
the sample.

Sampling design:

A Sample design is a definite plan for obtaining a sample from a given

population. It is the procedure used by the researcher in selecting items for the
sample.

Sample size:

Sample size=125 samples, variance and confidence methods are used for
determining sample size.

Sampling Technique:

The researcher adopted simple random sampling for the study.

 DATA COLLECTION METHOD

Primary data:

Primary data is the new or fresh data collected from the respondents through
structured scheduled questionnaire.

Secondary data:

The secondary data are collected through the structured questionnaire, literature
review and also from the past records maintained by the company.

STATISTICAL TOOLS AND TECHNIQUES

PERCENTAGE ANALYSIS:
Percentage = (No. Of respondents / total no. Of respondents)*100

WEIGHTED AVERAGE METHOD:

Formula:
Mean score = total score/no of respondents.
Where total score = no of respondents*weighted average

CHI – SQUARE TEST:

1. Null Hypothesis (Ho): There is no difference in attributes

2. Alternate Hypothesis(H1): There is a difference in attributes
3. Level of significance α = 0.05
4. Degrees of freedom = (r-1)(c-1)
5. Expected frequency:
E = R.T × C.T
6. Calculation of :
Σ = Σ (O-E)2
7. The tabulated value of at given level of significance with (r-1)(c-1)

ONE RUN TEST:

Null hypothesis (H0):

There is a no significant relationship between the variables

Alternate hypothesis (H1):

There is significant relationship between the variables
μr = 2 n1 n2 + 1
n1 + n2
2 n1 n2- n1- n1
σr = 2 n1n2
(n1+ n2)2 (n1+ n2-1 )
Lower limit = μr + (2.58) σ
Upper limit = μr + (2.58) σ

KENDALL’S COEFFICIENT OF CONCORDANCE:

Null hypothesis (H0): There is a difference in attributes

Alternate hypothesis (H1): There is no difference in attributes
Σ Rj = (Rj-Rj)2
S= Rj = Σ Rj

LIMITATIONS OF THE STUDY

1. The findings of the study are subjected to bias and prejudice of the
respondents.
2. Area of the study is confined to the employees in Chennai only.
3. Time factor can be considered as a main limitation.
4. The findings of the study are solely based on the information provided by the
respondents.
5. The accuracy of findings is limited by the accuracy of statistical tools used
for analysis.
6. Findings of the research may change due to area, demography, age condition
of economy etc.
 Analysis and Interpretation of data

1. PERCENTAGE ANAYLSIS

2. AWARENESS OF HR POLICIES

Chi-Square Test
To find whether there exists a significant relationship between Work Culture of
the Company and interpersonal relationship between employees.

H0: There is a no significant relationship between Work Culture of the

Company and interpersonal relationship between employees.

H1: There is a significant relationship between Work Culture of the Company

and interpersonal relationship between employees.
Calculated value is more than table value therefore accept H0
Result:
There is a significant relationship between overall satisfaction and aspects of
job.

KENDALL’S COEFFICIENT OF CONCORDANCE

Null hypothesis (H0): There is a no significant difference in the rank assigned

by respondents towards the attributes that gives them satisfaction in the
company.

Alternate hypothesis (H1): There is a significant difference in the rank

assigned by respondents towards the attributes that gives them satisfaction in
the company.

Ranking Based on Satisfaction

K=20:
Salary, Superior Role, Team Coordination, Work responsibilities, Rules and
Policies, Physical work environment Training
Calculated value : S= 5815.714
Table value : 1158
Calculated value is more than table value therefore reject H0

Result:
There is a significant difference in the rank assigned by respondents towards the
attributes that gives them satisfaction in the company.

ONE RUN TEST:

Null hypothesis (H0): The samples are not taken randomly.
Alternate hypothesis (H1): The samples are taken randomly.

EMPLOYEE’S SATISFACTION REGARDING MONETARY BENEFITS

PROVIDED BY THE COMPANY.
Retention Management:
Abstract:
Background: retention management is a highly topical subject and an
important dilemma many organizations might face in the future, if not facing it
already. We believe that the leader plays a key role in employee retention and
retention management. The concept of retention management can both have a
narrow, and a broader significance. Both parts of its significance are generally
included in this thesis. The background of the thesis present a few articles that
discuss issues that makes it important for the organization, and the leaders, to
work hard with retention management. The research is based on the leaders in
the Finnish case company Tradeka. Following key questions are intended to be
answered: What are the consequences between leaders actions and employees
retention? Which is the leader’s role when it comes to retaining employees?

Purpose statement: The purpose of the thesis is to investigate and analyze how
company leaders today can retain their key employees. How can the provision
of key human resources develop a long-term relationship that makes top
employees stay in the company? The study aims to establish the procedure
leaders apply to retain employees. The purpose is to compare the qualitative
study, made at the case company, with findings from the thesis theoretical
framework.

Research method: The study is a qualitative, as well as a theoretical study

where empirical findings and theories has been compared. The intention of
investigating and using the Finnish company Tradeka Limited as a case
company, is to make the information from the theories more valid, and also the
interest in how retention management works in practice. Eleven qualitative
interviews were conducted at Tradeka?
financial department, both with supervisors and employees to get a broader
view at the phenomenon retention management. Result: Leaders and their skill
in creating a culture of retention, has becoming a key in why people stay and
what usually drives them away from a company. The leader has become the
main factor in what motivates people’s decision to stay or leave. For
organizations to keep its key employees their number one priority should be to
look at their management, because people leave managers and not companies.
Characteristics in a leader that are of importance, as the leader plays a key role
in retention management is: trust builder, esteem builder, communicator, talent
developer and coach, and talent finder. The leader’s relation to the employees
plays a central role in retaining employees.

Employee Retention Strategies

The basic practices which should be kept in mind in the employee retention
strategies are:
1. Hire the right people in the first place.
2. Empower the employees: Give the employees the authority to get things
done.
3. Make employees realize that they are the most valuable asset of the
organization.
4. Have faith in them, trust and respect them
5. Provide them information and knowledge.
6. Keep providing them feedback on their performance.
7. Recognize and appreciate their achievements.
8. Keep their morale high.
9. Create an environment where the employees want to work and have fun.

These practices can be categorized in 3 levels:

• Low,
• medium and
• high level.
• Low Level Employee Retention Strategies:

 Appreciating and recognizing a well done job·

 Personalized well done and thank-you cards from supervisors·
 Congratulations e-cards or cards sent to spouses/families·
 Voicemails or mess·ages from top management
 Periodic days off for good performance·
 Rewards ( gift, certificates, monetary and non monetary rewards)·
 Recognizing professional as well as personal significant events·
 Wedding gifts
 Anniversary gifts
 New born baby gifts
 Scholarships for employee’s children
 Get well cards/flowers
 Birthday cards, celebrations and gifts
 Providing benefits·
 Home insurance plans
 Legal insurance
 Travel insurance
 Disability programs
 Providing perks: It includes coupons, discounts, rebates, etc·
 Discounts in cinema halls, museums, restaurants, etc.
 Retail store discounts
 Computer peripherals purchase discounts
 Providing workplace conveniences·
 On-site ATM
 On-site facilities for which cost is paid by employees
 laundry facility for bachelors
 Shipping services
 Assistance with tax calculations and submission of forms
 Financial planning assistance
 Casual dress policies
 Facilities for expectant mothers
 Parking
 Parenting guide
 Lactation rooms
 Flexi timings
 Fun at work·
 Celebrate birthdays, anniversaries, retirements, promotions, etc
 Holiday parties and holiday gift certificates
 Occasional parties like diwali, holi, dushera, etc
 Organize get together for watching football, hockey, cricket matches
 Organize picnics and trips for movies etc
 Sports outings like cricket match etc
 Indoor games
 Occasional stress relievers·
 “Casual dress” day
 “Green is the color” day
 Handwriting analysis
 Tatoo, mehandi, hair braiding stalls on weekends
 Mini cricket in office
 Ice cream Fridays
 Holi-Day breakfast
 Employee support in tough time or personal crisis·
 Personal loans for emergencies
 Childcare and eldercare services
 Employee Assistance Programs ( Counseling sessions etc)
 Emergency childcare services
• Medium Level Strategies for Employee Retention
 Appreciating and recognizing a well done job
 Special bonus for successfully completing firm-sponsored certifications
 Benefit programs for family support
 Child adoption benefits
 Flexible benefits
 Dependents care assistance
 Medical care reimbursement
 Providing conveniences at workplace·
 Gymnasiums·
 Athletic membership program·
 Providing training and development and personal growth opportunities·
 Sabbatical programs
 Professional skills development
 Individualized career guidance
• High Level Strategies
 Promoting Work/Life Effectiveness·
 Develop flexible schedules·
 Part-time schedules·
 Extended leaves of absence·
 Develop Support Services·
 On-site day care facility etc.
·
• Understand employee needs: This can be done through proper
management style and culture·
 Listen to the employee and show interest in ideas·
 Appreciate new ideas and reward risk-taking
 Show support for individual initiative
 Encourage creativity
• Encouraging professional training and development and/or personal
growth opportunities: It can be done through:·
 Mentoring programs
 Performance feedback programs
 Provide necessary tools to the employees to achieve their professional
and personal goals
 Getting the most out of employee interests and talents
  Higher study opportunities for employees
 Vocational counselling
 Offer personalized career guidance to employees
• Provide an environment of trust: Communication is the most important
and effective way to develop trust.·
 Suggestion committees can be created
 Open door communication policy can be followed

• Regular feedbacks on organization’s goals and activities should be

taken from the employees by:
 Management communications
 Intranet and internet can be used as they provide 24X7 access to the
information Newsletters, notice boards, etc.
• Hire the right people from the beginning: employee retention is not a
process that begins at the end. The process of retention begins right from
the start of the recruitment process.

The new joinees should fit with the organization’s culture. The personality,
leadership characteristics of the candidate should be in sync with the culture of
the hiring organization.
Referral bonus should be given to the employees for successful hires. They are
the best source of networking. Proper training should be given to the managers
on interview and management techniques. An internship program can be
followed to recruit the fresh graduates.

Retention Success Mantra

• Transparent Work Culture

In today’s fast paced business environments where employees are constantly
striving to achieve business goals under time restrictions; open minded and
transparent work culture plays a vital role in employee retention. Companies
invest very many hours and monies in training and educating employees. These
companies are severely affected when employees check out, especially in the
middle of some big company project or venture. Although employees most
often prefer to stay with the same company and use their time and experience
for personal growth and development, they leave mainly because of work
related stress and dissatisfactions .More and more companies have now realized
the importance of a healthy work culture and have a gamut of people
management good practices for employees to have that ideal fresh work-life.
Closed doors work culture can serve as a deterrent to communication and trust
within employees which are potential causes for work- Related apathy and
frenzy.

A transparent work environment can serve as one of the primary triggers to

facilitate accountability, trust, communication, responsibility, pride and so on. It
is believed that in a transparent work culture employees rigorously
communicate with their peers and exchange ideas and thoughts before they are
finally matured in to full-blown concepts. It induces responsibility among
employees and accountability towards other peers, which gradually builds up
trust and pride. More importantly, transparency in work environment
discourages work-politics which often hinders company goals as employees
start to advance their personal objectives at the expense of development of
The company as a single entity.
.
 Quality Of Work

The success of any organization depends on how it attracts, recruits, motivates,

and retains its workforce. Organizations need to be more flexible so that they
develop their talented workforce and gain their commitment. Thus,
organizations are required to retain employees by addressing their work life
issues. The elements that are relevant to an individual’s quality of work life
include the task, the physical work environment, social environment within the
organization, administrative system and relationship between life on and off the
job. The basic objectives of a QWL program are improved working conditions
for the Employee and increase organizational effectiveness.

Providing quality work life involves taking care of the following aspects:

Occupational health care: The safe work environment provides the basis for
the person to enjoy working. The work should not pose a health hazard for the
person. The employer and employee, aware of their risks and rights, could
achieve a lot in Their mutually beneficial dialogue.

Suitable working time: Organizations are offering flexible work options to

their employees wherein employees enjoy flexi-timings for dedicating their
efforts at work.

Appropriate salary: The appropriate as well as attractive salary has always

been an important factor in retaining employees. Providing employees salary at
par with the other counterparts of above that what competitors are paying
motivates them to stick With the company for long. QWL consists of
opportunities for active involvement in group working arrangements or problem
solving that are of mutual benefit to employees or employers, based on labor
management cooperation.

People also conceive of QWL as a set of methods, such as autonomous work

groups, job enrichment, and high-involvement aimed at boosting the satisfaction
and productivity of workers. It requires employee commitment to the
organization and an environment in which this commitment can flourish.
Providing quality at work not only reduces attrition but also helps in reduced
absenteeism and improved job satisfaction. Not only does QWL contribute to a
company's ability to recruit quality people, but also it enhances a company's
competitiveness. Common beliefs support the contention that QWL will
positively nurture a more flexible, loyal, and motivated workforce, which are
essential in determining the company's competitiveness. Supporting Employees
Organizations these days want to protect their biggest and most valuable asset
and they want to do this in a way that best suits their organizational culture.
Retaining employees is a difficult task. Providing support to the employees acts
as a mantra for retraining them. Employers can also support their employees by
creating an environment of trust and inculcating the organizational values into
employees.

The management can support employees directly or indirectly. Directly, they

provide support in terms of personal crises, managing stress and personal
development. Management can support employees, indirectly, in a number of
ways as follows:

Manage employee turnover: Employee turnover affects the whole

organization in terms of productivity. Managing the turnover, hence, becomes
an important task. A proactive approach can be adopted to reduce attrition.
Strategies should be framed in advance and implemented when the times
arrives. Turnover costs should also be taken into consideration while framing
these strategies.

Become employer of choice: What makes a company an employer of choice?

Is the benefit it offers or the compensation packages it gives away to its
employees? Or is it measured in terms of how they value their employees or in
terms of customer satisfaction? Becoming an employer of choice involves
following a road map which tells where to go as a brand.

Engage the new recruits: The newly hired employees are said to be least
engaged in the organization. Keeping them engaged is an important task. The
fresh talent should be utilized to maximum before they start feeling bored in the
organization.

Optimize employee engagement: An organization’s productivity is measured

not in terms of employee satisfaction but by employee engagement. Employees
are said to be engaged when they show a positive attitude toward the
organization and express a commitment to remain with the organization.
Employee satisfaction also comes with high engagement levels. So,
organizations should aim to maximize the engagement among employees.
Coaching and mentoring: Employees whose work performance suffers due to
poor interpersonal relationships or because of lack of interpersonal skills should
be provided proper coaching by their superiors. Planed coaching sessions help
an individual to work through issues, maximize his potential and return to peak
performance.

Feedback

Feedback acts as a channel of communication between the employee and his

manager. The amount of information employees receive about how well or how
poorly they have performed is what we call feedback. It is a dialog between a
manager and an employee which acts as a way of sharing information about the
performance. It suggests where the employee performance is effective and
where performance has to improve. Managers can provide either positive
feedback or negative feedback to employees. This feedback helps the employee
assess his performance and identify the improvement areas. Positive feedback
communicates managerial satisfaction. Positive recognition for good
performance boosts up morale of employees and results in performance
improvement to a higher productivity level. It is believed that positive feedback
is the only type of feedback that generates performance above the minimum
acceptable level. Negative feedback obviously communicates manager’s
dissatisfaction. However, negative feedback sometimes make employee to put
more efforts to improve his performance. But such times are very rare.
Moreover this improvement is short term. Some managers do not provide any
kind of feedback to their employees. Due to no feedback, employees may
assume that they are performing productively or they may feel that the manager
is satisfied with their performance. Studies reveal the performance tends be
same or even decreases if no feedback is provided. Thus, feedback is necessary
because:
 • It builds trust and enhances communication between manager and
employee.
• It gives managers and employees a way to identify and discuss skills and
strengths.
• Positive feedback leads to employee retention and Retention.

• It helps in identifying performance areas that need improvement and

specific ways to improve them. It acts as an opportunity to enhance
performance by identifying resources for skill development. It is an
opportunity for managers and employees to assess and identify career and
advancement opportunities. It helps employees to understand the
effectiveness of their performance and contributes to their overall
knowledge about the work Managers have tendency to ignore good
performances of their employees. Providing no feedback may demotivate
employees and may lead to employee absenteeism. Input from manager’s
side is necessary as it help employees to improve their performance and
increase productivity.

• Communication Between Employee and Employer

Communication is a process in which a message is conveyed to the receiver by

the sender. The message may be or may not be in a common format or language
that both the sender and receiver understand. So there is a need to encode and
decode the message in the process. Encoding and decoding also helps in the
security of the message. The process of communication is incomplete without
the feedback. Communication is the solution to almost everything in this world.
Same applies to employee retention also.
Straight-from-the-shoulder communication is what the employees need from
their employers. Employees look for organizations where communication and
process are transparent. Nothing is hidden and shared with the employees.
There are 3 categories of employees:

A: Who will leave their current employer in 3 years of their employment

B: Who have a probability of leaving their current employer in next 3 years
C: Who will stay with their current employer in the next 3 years

Category A: These are the employees who lack communication with their
employers.

Category C: These are the employees who have proper, well structured
communication with their employers. Communication is also the way to win the
employees trust in the organization. Employees trust the employers who are
friendly and open to them. This trust leads to employee loyalty and finally
retention.

Employers also feel that the immediate supervisors are the most authenticated
and trusted source of information for them. So the organizations should hire
managers who are active communicators. Communication mediums.

Open door policy: Organizations should support open door policies so that the
employees feel comfortable and are able to express their doubts and feeling to
their employers. Frequent meetings and Social gatherings Emails, Newsletters,
Intranet and many more. So there should be effective communication across the
organization and this communication should be two-way. Communication alone
can lead to unimaginable heights of employee retention.

Importance Of Employee Retention

The process of employee retention will benefit an organization in the following

ways:
1. The Cost of Turnover: The cost of employee turnover adds hundreds of
thousands of money to a company's expenses. While it is difficult to fully
calculate the cost of turnover (including hiring costs, training costs and
productivity loss), industry experts often quote 25% of the average employee
salary as a conservative estimate.

Loss of Company Knowledge: When an employee leaves, he takes with him

valuable knowledge about the company, customers, current projects and past
history (sometimes to competitors). Often much time and money has been spent
on the employee in expectation of a future return. When the employee leaves,
the investment is not realized.

Interruption of Customer Service: Customers and clients do business with a

company in part because of the people. Relationships are developed that
encourage continued sponsorship of the business. When an employee leaves, the
relationships that employee built for the company are severed, which could lead
to potential customer loss.

Turnover leads to more turnovers: When an employee terminates, the effect

is felt throughout the organization. Co-workers are often required to pick up the
slack. The unspoken negativity often intensifies for the remaining staff.
Goodwill of the company: The goodwill of a company is maintained when the
attrition rates are low. Higher retention rates motivate potential employees to
join the organization.

Regaining efficiency: If an employee resigns, then good amount of time is lost

in hiring a new employee and then training him/her and this goes to the loss of
the company directly which many a times goes unnoticed. And even after this
you cannot assure us of the same efficiency from the new employee
What Makes Employee Leave? Employees do not leave an organization without
any significant reason. There are certain circumstances that lead to their leaving
the organization. The most common reasons can be:

Job is not what the employee expected· to be: Sometimes the job
responsibilities don’t come out to be same as expected by the candidates.
Unexpected job responsibilities lead to job dissatisfaction.

Job and person mismatch: A candidate may be fit· to do a certain type of job
which matches his personality. If he is given a job which mismatches his
personality, then he won’t be able to perform it well and will try to find out
reasons to leave the job.

No growth opportunities: No or less learning and growth opportunities in the

current job will make candidate’s job and career stagnant.
Lack of appreciation: If the work is not appreciated by the supervisor, the
employee feels de-motivated and loses interest in job.

Lack of trust and support in co workers, seniors and management: Trust is

the most important factor that is required for an individual to stay in the job.
Non-supportive co workers, seniors and management can make office
environment unfriendly and difficult to work in.

Stress from overwork and work life imbalance: Job stress can lead to work
life imbalance which ultimately many times lead to employee leaving the
organization.

Compensation: Better compensation packages being offered by other

companies may attract employees towards themselves.

New job offer: An attractive job offer which an employee thinks is good for
him with respect to job responsibility, compensation, growth and learning etc.
can lead an employee to leave the organization.

Managing Employee Retention:

The task of managing employees can be understood as a three stage process:

1. Identify cost of employee turnover.
2.Understand why employee leave.
3.Implement retention strategies
The organizations should start with identifying the employee turnover rates
within a particular time period and benchmark it with the competitor
organizations. This will help in assessing the whether the employee retention
rates are healthy in the company. Secondly, the cost of employee turnover can
be calculated. According to a survey, on an average, attrition costs companies
18 months’ salary for each manager or professional who leaves, and 6 months’
pay for each hourly employee who leaves. This amounts to major organizational
and financial stress, considering that one out of every three employees plans to
leave his or her job in the next two years.

Understand why employees leave :

Why employees leave often puzzles top management. Exit interviews are an
ideal way of recording and analyzing the factors that have led employees to
leave the organization. They allow an organization to understand the reasons for
leaving and underlying issues. However employees never provide appropriate
response to the asked questions. So an impartial person should be appointed
with whom the employees feel comfortable in expressing their opinions.

Implement retention strategy :

Once the causes of attrition are found, a strategy is to be implemented so as to
reduce employee turnover. The most effective strategy is to adopt a holistic
approach to dealing with attrition.

An effective retention strategy will seek to ensure:

Attraction and recruitment strategies enable selection of the ‘right’ candidate for
each role/organization New employees’ initial experiences of the organization
are positive Appropriate development opportunities are available to employees,
and that they are kept aware of their likely career path with the organization
The organization’s reward strategy reflects the employee drivers
How To Increase Employee Retention Companies have now realized the
importance of retaining their quality workforce. Retaining quality performers
contributes to productivity of the organization and increases morale among
employees/ Four basic factors that play an important role in increasing
employee retention include salary and remuneration, providing recognition,
benefits and opportunities for individual growth. But are they really positively
contributing to the retention rates of a company? Basic salary, these days,
hardly reduces turnover. Today, employees look beyond the money factor.
Retention Bonus

Higher attrition rates within a particular industry have forced companies to use
some innovative strategies to retain employees. Retention Bonus is one of the
important tools that are being used to retain employees. Retention bonus is an
incentive paid to an employee to retain them through a critical business cycle.
Retention bonuses are becoming more common in the corporate world because
companies are going through more transitions like mergers and acquisitions.
They need to give key people an attractive incentive to stay on through these
transitions to ensure productivity. Retention bonuses have proven to be a useful
tool in persuading employees to stay. A retention bonus plan is not a panacea.
According to a survey, non management employees generally receive about 10
percent of their annual salaries in bonuses, while management and top-level
supervisors earn an additional 50 percent of their annual salaries. While bonuses
based on salary percentages are the generally used, some companies choose to
pay a flat figure. In some companies, bonuses range from 25 percent to 50
percent of annual salary, depending on position, tenure and other factors.
Employees are chosen for retention bonuses based on their contributions to
management and the generation of revenue. Retention bonuses are generally
vary from position to position and are paid in one lump sum at the time of
termination. However, some companies pay in instalments as on when the
business cycle completes. A retention period can run somewhere between six
months to three years. It can also run for a particular project. A project
has its own life span. As long as the project gets completed, the employees who
have worked hard on it are entitled to receive the retention bonus. For example,
the implementation of a system may take 18 months, so a retention bonus will
be offered after 20 months. Although retention bonuses are becoming more
common everywhere, some industries are more likely than others to offer them.
Retail/wholesale companies are the most appropriate to implement stay-pay
bonuses, followed by financial service providers and manufacturing firms.
Companies of all sizes use retention bonus plans to keep knowledge employees
retained in the company. To retain its key senior employees post merger with
EDS Corporation, Mphasis is providing cash component based retention bonus
plan for its employees. This is mainly to retain good employees and provide
them a cash incentive to keep them motivated.

Hire Right Talent

employee retention starts with recruitment. Early departures arise from the
wrong recruitment process. Here are a few ways to ensure how to hire the right
talent for a particular job. Hire appropriate· candidates. Hire candidates who are
actually suitable for the job. For this the employer should understand the job
requirements clearly. Don’t hire under qualified or clearly overqualified
candidates.

Provide realistic job preview at the time of hiring: Mostly employees leave
an organization because they are given the real picture of their job
responsibilities at the time of joining. Attrition rate can be reduced if a right
person is hired for a right job. Realistic preview of the job responsibilities can
be given to the employment seekers by various methods like discussions, trial
periods, internships etc.

Clearly discuss what is expected from the employee: Before joining the
organization, tell the candidate what is expected from him. Setting wrong
expectations or hiding expectations will result in early leaving of employees.

Discuss what the expectations of the employees are: Ask employees what
they expect from the organization. Be realistic. If their requirements can be
fulfilled only then promise them. Or tell them beforehand that their
requirements cannot be fulfilled.

Don’t show them an unrealistic picture Culture fit: Try to judge individual’s
capability to adapt to the organization’s culture. A drastic change in the culture
may give a culture shock to the candidate.

Referrals: According to· the research, referred candidates stay longer with the
organization. There is a fear of hampering the image and reputation of the
person who referred the candidate.

Manager Role in Retention

When asked about why employees leave, low salary comes out to be a common
excuse. However, research has shown that people join companies, but leave
because of what their managers’ do or don’t do. It is seen that managers who
respect and value employees’ competency, pay attention to their aspirations,
assure challenging work, value the quality of work life and provided chances for
learning have loyal and engaged employees. Therefore, managers and team
leaders play an active and vital role in employee retention.
Managers and team leaders can reduce the attrition levels considerably by
creating a motivating team culture and improving the relationships with team
members. This can be done in a following way:

Creating a Motivating Environment: Team leaders who create motivating

environments are likely to keep their team members together for a longer period
of time. Retention does not necessarily have to come through fun events such
as parties, celebrations, team outings etc. They can also come through serious
events. e.g. arranging a talk by the VP of Quality on career opportunities in the
field of quality. Employees who look forward to these events and are likely to
remain more engaged.
Standing up for the Team: Team leaders are closest to their team members.
While they need to ensure smooth functioning of their teams by implementing
management decisions, they also need to educate their managers about the
realities on the ground. When agents see the team leader standing up for them,
they will have one more reason to stay in the team.

Providing coaching: Everyone wants to be successful in his or her current job.

However, not everyone knows how. Therefore, one of the key responsibilities
will be providing coaching that is intended to improve the performance of
employees. Managers often tend to escape this role by just coaching their
employees. However, coaching is followed by monitoring performance and
providing feedback on the same.

Delegation: Many team leaders and managers feel that they are the only people
who can do a particular task or job. Therefore, they do not delegate their jobs as
much as they should. Delegation is a great way to develop competencies.
Extra Responsibility: Giving extra responsibility to employees is another way to
get them engaged with the company. However, just giving the extra
responsibility does not help. The manager must spend good time teaching the
employees of how to manage responsibilities given to them so that they don’t
feel over burdened.

Focus on future career: Employees are always concerned about their future
career. A manager should focus on showing employees his career ladder. If an
employee sees that his current job offers a path towards their future career
aspirations, then they are likely to stay longer in the company. Therefore,
managers should play the role of career counsellors as well.

How to Improve Employee Retention?

People want to enjoy their work so make work fun and enjoyable.
Understand that employees need to balance life and work so offer flexible
starting times and core hours. Provide 360 feedback surveys and other
questionnaires to foster open communication. Consider allowing anonymous
surveys occasionally so employees will be more honest and candid with their
opinions. Provide opportunities within the company for career progression and
cross-training. Offer attractive, competitive benefits .
Organizations should target job applications for employees who have
characteristics that fit well with the organizational culture. Upon conducting an
interview, seek out traits, such as loyalty. Also, ask the potential employee what
motivates them on the job. Having more information about the potential
employee’s expectations can help retain them, should they get hired into the
company.

Rewards and Recognition

Employees want to be recognized for a job well done. Rewards and recognition
respond to this need by validating performance and motivating employees
toward continuous improvement. Rewarding and recognizing people for
performance not only affects the person being recognized, but others in the
organization as well. Through a rewards program, the entire organization can
experience the commitment to excellence. When the reward system is credible,
rewards are meaningful; however, if the reward system is broken, the opposite
effect will occur. Employees may feel that their performance is unrecognized
and not valued, or that others in the organization are rewarded for the wrong
behaviours. Unrecognized and no valued performance can contribute to
turnover. Recognition for a job well done fills the employees' need to receive
positive, honest feedback for their efforts.

Need for Rewards and Recognition

Recognition should be part of the organization's culture because it contributes to

both employee satisfaction and retention. Organizations can avoid employee
turnover by rewarding top performers. Rewards are one of the keys to avoiding
turnover, especially if they are immediate, appropriate, and personal. A Harvard
University study concluded that organizations can avoid the disruption caused
by employee turnover by avoiding hiring mistakes and selecting and retaining
top performers.

One of the keys to avoiding turnover is to make rewards count. Rewards are to
be immediate, appropriate, and personal. Organizations may want to evaluate
whether getting a bonus at the end of the year is more or less rewarding than
getting smaller, more frequent payouts. Additionally, a personal note may mean
more than a generic company award. Employees should be asked for input on
their most desirable form of recognition. Use what employees say when it
comes time to reward for performance.

Designing a Rewards and and Recognition Solution

In designing a rewards and recognition program, the following guidelines

should be considered.
• Rewards should be visible to all members of the organization.
• Rewards should be based on well-defined, credible standards that have
been developed using observable achievements.
• Rewards should have meaning and value for the recipient.
• Rewards can be based on an event (achieving a designated goal) or based
on a time frame (performing well over a specific time period).
• Rewards that are spontaneous (sometimes called on-the-spot awards) are
also highly motivating and should also use a set criteria and standard to
maintain credibility and meaning.
• Rewards should be achievable and not out of reach by employees.
 • Nonmonetary rewards, if used, should be valued by the individual. For
example, an avid camper might be given a 10-day pass to a campsite, or,
if an individual enjoys physical activity, that employee might be given a
spa membership. The nonmonetary rewards are best received when they
are thoughtfully prepared and of highest quality. Professionalism in
presenting the reward is also interpreted as worthwhile recognition.

Rewards should be appropriate to the level of accomplishment received. A cash

award of $50 would be inappropriate for someone who just recommended a
process that saved the organization a million dollars. Determining the amount of
money given is a delicate matter of organizational debate in which
organizational history, financial parameters, and desired results are all factors.
Recognition for a job well done can be just as valued and appreciated as
monetary awards. Formal recognition program can be used with success. First
Data Resources, a data processing services company that employees more than
6,000 individuals in Omaha, Nebraska, uses a formal recognition program
(Adams, Mahaffey, and Rick,2002). Rewards are given on a monthly, quarterly,
and yearly basis, and range from Nebraska football tickets, gift certificates,
pens, plaques, mugs, and other items.

One of the most popular awards at First Data is called the "Fat Cat Award" that
consists of: $500 gift check Professional portrait of the employee
• Appreciation letter from the CEO and senior management
• E-mails, phone calls, and notes from peers
In addition to nonmonetary rewards, employees can be rewarded using money
in numerous ways. Cash is a welcome motivator and reward for improving
performance, whether at formal meetings or on the spot. Variable bonuses
linked to performance are another popular reward strategy. Profit sharing and
pay-for-skills are monetary bonus plans that both motivate individuals and
improve goal achievement. Small acts of recognition are valuable for employee
daily Retention. Sometimes a personal note may mean more than a generic
company award.

In one survey, employees cited the following as meaningful rewards (Moss,

2000):
• Employee of the month awards Years of service awards
• Bonus pay (above and beyond overtime) for weekend work
• Invitations for technicians to technical shows and other industry events
• Meaningful and Retention Rewards

What gives meaning to rewards and recognition? What makes them effective?
First, rewards and recognition should be based on a clear set of standards, with
performance verifiable or observable. The standards for the reward should also
be achievable. If the reward is based on an unachievable result, such as a
production goal that is beyond employees' power, then those employees will not
be motivated. Meaningful rewards and recognition that are achievable have the
greatest impact.
Case Studies

1.Employee Retention Best Practices in Keeping and Motivating

Employees By LisBeth Claus Ask any CEO of an organization, “What
keeps you awake at night?” and you will get a response that relates to
people management issues. a main concern for any organization (whether
small or large; private, public or nonprofit) is its capacity to attract,
engage, and retain the right people. The problem of retention is
compounded by the predicted talent shortage resulting from the upcoming
retirement of the baby boomers, the scarcity of talent with relevant work
skills for today’s jobs, the changing values about work and the high cost
of turnover. Research and human resource practices provide us with a
number of recommendations to increase employee retention.

2.How Auditing Company X Works with Retaining Valuable

Employees : Swedish Case study University essay from Hogskolan i
Jonkoping/IHH, EMM (Entrepreneurskap, Marknadsforing,
Management) Author: Josip Bogic; Elina Armanto; Maja Cassel; [2008]
Abstract: Today, neither employees nor employers seem to take for
granted that a person will stay with the same firm until retirement. Yet,
keeping employees for longer periods is an imp-ortant challenge for
firms. One industry where retention is interesting is the auditing industry
in Sweden, this because certain requirements are needed to become an
auditor. Firstly, the employee needs to have a Swedish university degree,
including specific courses within au-diting/accounting. Furthermore, the
person needs practical experience for a specific period of time. Due to
these statements the challenge of retaining and motivating valuable
employees is crucial for the auditing firms, which is why we have chosen
to do a case study at Auditing Company X to see how they work with
employee retention. We have compared the findings to our chosen theory,
which consist of four categories:
the hiring process, in-ternal labor market and career, motivation and
performance, and finally culture and leader-ship. These four categories are
initially based on Leigh Branham?s book: ?Keeping the people who keep you in
business: 24 ways to hang on to your most valuable talent? (Bran-ham, 2001).

In our conducted case study, at Auditing Company X, we have been able to

conclude that the firm’s retention practices are to a great extend in line with the
theoretical framework. There are some areas that need further attention from the
company, such as an individualized reward system and communication between
managers and employees. Even though there are some parts to work on the most
important aspects of retention, such as having a holistic and long-term
orientation, Auditing Company X seems to have incorporated this into their
practices successfully.

3.Retention: An explanatory study of Swedish employees in the financial sector

regarding leadership style, remuneration and elements towards job satisfaction
University essay from Vaxjo universitet/Ekonomihogskolan Author: Sanna
Paulsson; Linda Lindgren; [2008]

Abstract: Introduction: Companies today are forced to function in a world full

of change and complexity, and it is more important than ever to have the right
employees in order to survive the surrounding competition. It is a fact that a too
high turnover rate affects companies in a negative way and retention strategies
should therefore be high on the agenda. When looking at this problem area we
found that there may be actions and tools that companies could use to come to
terms with this problem. Research told us that leadership, remuneration and
elements like participation, feedback, autonomy, fairness, responsibility,
development and work-atmosphere is important for job satisfaction and
retention.
Object: The main objective is to increase the understanding regarding
employee’s retention in relation to leadership style, remuneration and elements
such as participation, feedback, autonomy, fairness, responsibility, development
and work atmosphere in the Swedish financial

Sector Method: We wanted to investigate how employee of the Swedish

financial sector prefers to be retained, and how they consider and react to the
chosen areas.

The survey has a quantitative approach with a web based questionnaire and
includes 129 respondents from banks, insurance and finance companies. The
theoretical framework includes leadership and leadership style, financial as well
as non-financial remuneration and research done in later years regarding
participation, feedback, autonomy, fairness, responsibility, development and
work-atmosphere connected to retention.

Conclusion: The result shows that regarding leadership the respondents prefer
leadership based on relations were they feel appreciation. Both appreciations
from the closest manager as well as the company management influences
employee job satisfaction in a positive way. More money was the most common
reason for wanting to change jobs, and when asking how the remuneration
system should be designed, base pay with additional bonus and benefits were
preferred. But also non financial factors such as participation, feedback,
autonomy, fairness, responsibility, development and work-atmosphere must be
taken in consideration to satisfy since they seem to increase employees?
Willingness to stay in the company.

4.What leaders can do to keep their key employees - Retention Management

University essay from Goteborgs universitet/Foretagsekonomiska institutionen
Author: Lisa Hedberg; Maria Helnius; [2007-09-03T08:22:31Z]

Abstract: Background: retention management is a highly topical subject and an

important dilemma many organizations might face in the future, if not facing it
already. We believe that the leader plays a key role in employee retention and
retention management. The concept of retention management can both have a
narrow, and a broader significance. Both parts of its significance are generally
included in this thesis. The background of the thesis present a few articles that
discuss issues that makes it important for the organization, and the leaders, to
work hard with retention management. The research is based on the leaders in
the Finnish case company Tradeka.

Following key questions are intended to be answered: What are the

consequences between leaders actions and employees retention? Which is the
leader’s role when it comes to retaining employees? Purpose statement: The
purpose of the thesis is to investigate and analyze how company leaders today
can retain their key employees. How can the provision of key human resources
develop a long-term relationship that makes top employees stay in the
company? The study aims to establish the procedure leaders apply to retain
employees. The purpose is to compare the qualitative study, made at the case
company, with findings from the thesis theoretical framework.

Research method:
The study is a qualitative, as well as a theoretical study where empirical
findings and theories has been compared. The intention of investigating and
using the Finnish company Tradeka Limited as a case company, is to make the
information from the theories more valid, and also the interest in how retention
management works in practice. Eleven qualitative interviews were conducted at
Tradeka? financial department, both with supervisors and employees to get a
broader view at the phenomenon retention management. Result: Leaders and
their skill in creating a culture of retention, has becoming a key in why people
stay and what usually drives them away from a company. The leader has
become the main factor in what motivates people’s decision to stay or
leave. For organizations to keep its key employees their number one priority
should be to look at their management, because people leave managers and not
companies. Characteristics in a leader that are of importance, as the leader plays
a key role in retention management is: trust builder, esteem builder,
communicator, talent developer and coach, and talent finder. The leader’s
relation to the employees plays a central role in retaining employees, because
employees need to feel involvement, and that their presence count. When
retention is a core value, good things happen for customers, employees, and the
company. because employees need to feel involvement, and that their presence
count. When retention is a core value, good things happen for customers,
employees, and the company.

FINDINGS
・ It is found out that, 40% of respondents are aware of HR Policies and 60 %
of respondents are not aware of HR Policies.
・ It is found out that, 76% of respondents are getting right amount of accurate
information at right time and 24% of respondents are not getting right amount
of accurate information at right time.
・ It is found out that, 82% of respondents are able to meet superior’s
expectation and 18% respondents are not able to meet superior’s expectation.
・ It is found out that,57% of respondents feels that there pay is on par with
compare to employee’s handling similar responsibilities, and 39% of
respondents feels that there pay is less with compare to employee’s handling
similar responsibilities.
・ It is found out that, 70% of respondents are satisfied with hygiene and
cleanliness of company infrastructure and 30% of respondents are not satisfied
with hygiene and cleanliness of company infrastructure.
・ It is found out that, 40% of respondents are satisfied with Availability of
system, storage facilities of company and 60% of respondents are not satisfied
with Availability of system, storage facilities of company.
・ It is found out that, 78% of respondents skills are recognized by superiors
and 22% of respondents skills are not recognized by superiors.
・ It is found out that, 74% of respondents feel that superiors are taking efforts
to motivate them and 26% of respondents feel that superiors are not taking
efforts to motivate them.
・ It is found out that, 83% of respondents feel that workload is manageable
and 10% of respondents feel that workload is very hard to manage.
・ It is found out that,55% of respondents feels that the field worker are able to
get updates on internal activities, and 45% of respondents feels that the field
worker are not able to get updates on internal activities.
・ It is found out that, 89% of respondents feel that the superiors are easily
accessible and 11% of respondents feel that the superiors are not easily
accessible.
・ It is found out that, 51% of respondents feel that their complaints are
resolved quickly and 49% of respondents feel that their complaints are not
resolved quickly.
・ From weighted Average analysis it is found that most of the respondents are
satisfied with the working hours of the organization
・ From weighted Average analysis it is found that roles & responsibilities are
clearly defined by the Reporting heads.
・ From weighted Average analysis it is found that employees feel that their
superior's commitment towards job is good.
・ From weighted Average analysis it is found that respondents feel that
training and orientation programs are neither good nor bad.
・ From weighted Average analysis it is found that most of the respondents are
satisfied with job.
・ From chi-square it is found that there is a significant relationship between
Work Culture of the Company and interpersonal relationship between
employees.
・ From chi-square it is found that there is a no significant relationship between
overall satisfaction and Commitment towards Company.
・ From chi-square it is found that there is a significant relationship between
overall satisfaction and aspects of job.
・ From Kendall’s coefficient of concordance it is found that there is a
significant difference in the rank assigned by respondents towards the attributes
that gives them satisfaction in the company.
・ From One Run Test it is found that the samples are taken randomly.

SUGGESTIONS
 • Employee should be provided with proper training.
• Employee should be appreciated for good work.
• Employee should be motivated to welcome the change.
• If any changes are brought in to software or any module is added then
proper
• training should be given.

Conclusion

Retention is an important concept that has been receiving considerable attention

from academicians, researchers and practicing HR managers. In its essence,
Retention comprises important elements such as the need or content, search and
choice of strategies, goal-directed behaviour, social comparison of rewards
reinforcement, and performance-satisfaction. The increasing attention paid
towards Retention is justified because of several reasons. Motivated employees
come out with new ways of doing jobs. They are quality oriented. They are
more productive.

Any technology needs motivated employees to adopt it successfully. Several

approaches to Retention are available. Early theories are too simplistic in their
approach towards Retention. For example, advocates of scientific Management
believe that money is the motivating factor. The Human Relations Movement
posits that social contacts will motivate workers. Mere knowledge about the
theories of Retention will not help manage their subordinates. They need to
have certain techniques that help them change the behavior of employees.One
such technique is reward. Reward, particularly money, is a motivator according
to need-based and process theories of Retention. For the behavioral scientists,
however, money is not important as a motivator. Whatever may be the
arguments, it can be stated that money can influence some people in certain
circumstance. Being an outgrowth of Herzberg’s, two factor theory of
Retention, job enrichment is considered to be a powerful motivator. An
enriched job has added responsibilities. The makes the job interesting and
rewarding. Job enlargement refers to adding a few more task elements
horizontally. Task variety helps motivate job holders. Job rotation involves
shifting an incumbent from one job to another.

Recommendations

1. Develop an attractive employee value proposition.

An employee value proposition means that your company has something
attractive to offer that is perceived as valuable to an employee. as an employer,
you must understand what makes your organization attractive to potential
recruits and current employees. Branding yourself as an employer of choice is
not just a slick set of marketing tactics. The best advocates for an employer’s
brand are its current employees. What messages do they send to others about
their employer? Are they honestly saying and believing that, “This is a great
place to work.”

2. Create a total reward structure that includes more than compensation.

Every company should have all the normal compensation mechanisms common
to their type of employment. yet, total rewards packages go far beyond money.
While money might temporarily retain employees, it does not always equate
with engagement. People want a chance to make a difference and realize
themselves. That self-realization is multi-dimensional and different for each
employee. The total reward structure should include, in addition to
compensation, support for employees to attain their personal objectives aligned
with the goals of their organization.

3. Give feedback on employee performance on a regular basis.

Most managers and employees are not enamored with the performance appraisal
process in their organization. yet, an effective performance management process
serves many purposes. Ongoing performance feedback allows employees to
better know where they stand, gives them a formal means to provide input,
indicates that their managers pay attention to them and that their performance
matters. This feedback contributes to employee engagement and retention.

4. Be flexible in terms of work-life balance. Workers more and more value a

balance between work and life. They want more flexible ways to engage with
their employer. To attract and retain workers with different work and career
expectations, organizations have to be more flexible in structuring work and
its expectations. It calls for a different managerial mindset and practices that
involve letting go of old ways of controlling workers’ time and attendance in
favor of result criteria such as output, productivity and quality.

5. Create a culture of engagement. Employees have become more connected

with others in the organization (and the broader supply-and-customer chain)
through project-based team work and process management activities.
Employees are shifting their loyalty to people, teams and projects and away
from company loyalty. It is organizations that create the culture and climate that
allow people, processes and projects to become fully connected and engaged
with one another. Engaged employees are more likely to stay with their
employer.

6. Train managers to be effective. Exit interviews consistently show that “poor

and bad” management practices greatly contribute to an employee’s decision to
leave a company. It is imperative to provide supervisors and managers with
adequate tools to become effective managers since we cannot assume that these
competencies are innate. Professor Patrick Connor, recently retired after
teaching 25 years at the atkinson Graduate school of Management, is
famous among MBA students and alumni for his ‘Connorisms.’He told them,
“your employees do not work for you, they work for themselves.” When I teach
my students about managing organizations, I have them reflect on what really
matters to employees and what they are constantly asking of their managers and
their organizations. In the end, what employees expect of their managers is
fairly simple: Can I trust you? are you committed to excellence? Do you care
about me? What people constantly ask of their organization is: Do you tell the
truth? Do you keep promises? Do you act fairly? Do you respect me? Managers
and organizations that keep these questions in mind will have a competitive
advantage over others in retaining their employees.

BIBLIOGRAPHY

BOOKS
・ Human Resource Management C.B.Memoria
・ Research methodology C.R.Kothari
・ Journals, Newspaper and Internet

For more Notes, Presentations, Project Reports visit

• a2zmba.blogspot.com
• hrmba.blogspot.com
• mbafin.blogspot.com