Professional Documents
Culture Documents
A Project Report Prepared by Dilantha Jude Suranga Perera. 09WE/03/05 Course: Certificate Course in Human Resource Management December 2009.
A WORD OF APPRECIATION!
This study benefited from the contributions, guidance & encouragement of many people. Firstly I would like to extend my gratitude towards the HR team of the Dialog company, for allowing me study the materials related to the study and make them selves available for the interviews. A special thanks goes to Mr. Pabath Liyanage for making himself, available for most important editing process, besides her busy schedule. Finally I would like to thank my parents, my sisters, my brother & ma friend Mario for their encouragement and prayers through out.
Preface
This study is done as a partial fulfillment of the requirement for the Certificate Course in Human Resources Management at IPM. The main purpose of this study is to identify the importance of Retaining Employees. The researcher also wanted to find out the Characteristics of the Target Group, of the Labour Turn Over & The reasons for them to leave the company, some of the recommendations has been proposed to minimize the high labour turn over. The statistical analysis was done in order to analyse, the data is presented in graphs using Microsoft 2000. The research is based on an Telecommunication Company, which is operating in Sri Lanka over 10 years, more information about the company and its human resources practices are summarized in chapter II. The company, according to its privacy policy wishes to remain anonymous. accordingly the researcher has edited the attached exit interview form. The list of the references is attached at the back of the thesis.
Table Of Contents
Chapter I - Introduction
1.1 1.2 1.3 1.4 1.5 1.6 1.7 Introduction Importance of Employee Retention Objectives of the Study Data Collection Data Presentation Limitations of the Study Organization of the Study
Chapter IV Recommendations
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 The Company Structure Remuneration & Benefits Performance Appraisal Promotions & Increments Job Design & Work Teams Job Rotation Recognition and Rewards Training, Professional Development, And Career Planning Recruitment & Orientation
4.10 Works-Life Balance 4.11 Employee Participation & Communication 4.12 Knowledge Transfer Cross Training, Coaching and Mentoring, Phased In Retirement
Appendix References
INTRODUCTION
1. Introduction
This study is based on The Importance of Retaining Best Performers for an organization. In a competitive business environment it is the quality of people that makes a difference and provides competitive advantage to organizations. If any business to succeed it has to attract most talented people and should retain them. Technology, finance and systems are available today more easily than at any time, to anybody and anywhere. In such a condition requiting and retaining talented people seems to have become a bigger challenge. For many employers, employee retention is the piece of the management puzzle that never seems to fall into place. Because of rapid change over the past decade, finding and keeping employees has become more difficult than ever. Retaining top talent was less of an issue in the past; employees were employees for life, aiming to get higher gratuity payment on retirement. They believed that the company would take good care of them if they did a good job. That mindset has changed. Layoffs, disappearance of pension schemes, reductions in workforce, out sourcing, and
terminations have eroded loyalty on the part of workers, even those employees not directly affected. Todays employees especially younger employees think more likely free agents selling their services to the highest bidder. Finding employees is more difficult in certain parts of the county and in high-demand markets, such as high technology. Furthermore, finding employees is just a start. Other employees and recruiters know where to find good employees and are aggressively recruiting them, even if they are already working for your company. Head-hunters are behind the good employees. In many organizations, losing employees has a domino effect. When one employee leaves, others often wonder about opportunities elsewhere. Those other opportunities start to look better as employees pick up the slack for those who have moved on. The new employee retention picture is not necessarily a hard thing, it forces business to treat employees well and find more innovative ways to keep them. However, this scenario is a sea change from what business owners and managers faced in previous decades, and it requires adjustments and new ideas, by getting out in front of the curve, your business can become a hard to leave workplace for years to come.
10
11
LITERATURE REVIEW
12
These multi-national companies are willing to pay highest salary in the market for the qualified people that fulfill their requirement. Due to the dearth for talent the compensation structures for competent people have gone up in some industries as many as a twenty fold in a mutter of a decade. In other words, they have realized that, their organizations are reliant upon their human assets to survive or thrive.
2.3 Introduction To the Company Vision. To be the undisputed leader in the provision of multi-sensory connectivity resulting always, in the empowerment of Sri Lankan lives and enterprises. Mission.
14
To lead the provision of technology-enabled connectivity touching multiple human sensors and faculties, through committed adherence to customerdriven, responsive and flexible business processes, and through the delivery of quality service and leading edge technology unparalleled by any other, spurred by an empowered set of dedicated individuals who are driven by an irrepressible desire to work as one towards a common goal in the truest sense of team spirit.
Introduction.
This study is based on one of the well-established leading telecommunication company in Sri Lanka, which is operating more than 10 years in the market. The total workforce of the company exceeds 3000 (Three thousand) employees, the company have diversified its operations in to branches situated in main cities around the country. The company still running at profit, if review companys financial statements of last 10 years. But during the last six financial years the situation of the telecommunication company began to change. The company is facing two major problems. Firstly the company is loosing its major clients and secondly the company loosing its employees. Finding solutions for both problems are equally important for the company, as there is a major link between both problems. This study is mainly focuses on the second problem and tries to suggest solution for both the problems by finding the reason behind high labour turn over and importance of retaining best performers for an organization.
15
study assistance policy, where the company grant a special loan for employees to carryout their studies related to their work. 2.4.5 Increments and Promotions The increments and promotion are based on both sonority and performance. Assistant Level Employees 75% of the assistant level employees would get a grade up after the year-end appraisal. Higher Level Employees Performance appraisal is done twice a year. Under Bi annually (July) & annually basis (Dec). Promotions are based on performance as well as availability of vacancies at the higher levels. 2.4.6 Financial Incentives The company does pay financial incentives for its regular staff, other than salary. 2.4.7 Bonus The company pays annual bonus of 1.5 months basic salary every December and based on the overall performance of the company. 2.4.8 Technology Use The whole operation of the company is fully computerized. The company has invested thousands of US dollars for the system and it is claimed to be the most efficient and effective system that any telecommunication company of Sri Lanka uses.
17
advertising in newspapers and also to head hunters to find them suitable replacements. The company has exceeded the advertising budget continuously, during the past few years. If the company had to hire a service of a recruiting company the cost would be even higher. It is estimated that the replacement cost of an assistant level employee is more than six months salary of the employee, for executive grade this cost would exceed even more. The lost of productivity and the intellectual capital to the company, is difficult to calculate but studies have shown that well trained qualified employees productivity is up to four times more than an average new employee. At present approximately 20% of the work force of the company have less than Six years of work experience this affects the performance standard of the workforce, and would directly hit the performance of the company. The company has lost some of its long-term customers during last few years. It can not be observed that the customer complains are increasing than ever before. The company carries out independent surveys every quarter of the year to find out the service standards of the company, some of those are lead-time to underwrite a policy, lead-time to realize a clam, etc. and the survey results approve the customer complaints, service standards have declined. The main reason for this is inadequate training of the employees. The total operation process of the company is based on systems. When this systems were implemented, all the staff were given adequate training. But most of the trained employees have left the company and the organization has not been able to retain the expert system knowledge. The studies have proven that the customers like to deal with people they know and trust, this is an important theory applicable for telecommunication industry. This theory has been proven once again as some of the clients that the company lost during past few years have gone to competitor organizations to which the person who has handled the account of the client has joined.
18
High labour turn over has an effect on the organization culture as well, especially when the heroes, the standard bearers of the companys culture walk out of the door. The management team has complained that it is extremely difficult for them to achieve targets as their team members are consistently changed. Most importantly the company is loosing its well trained qualified experienced employees to its competitors, there fore the company is facing another serious problem of secured the confidentiality of its operational activities and its future corporate business plan.
*100
This does not distinguish the cases where people left because they were dissatisfied, from cases where people left because of ill health or where they retired, or where they were made redundant. It is also useful to calculate a separate figure for voluntary labour turn over. This Can Be Calculate As Below
19
Leavers in Year - (No. Retired Staff + Redundant Staff) Average Number of staff in post During the year
*100
Both ratios have been taken in to account when calculating labour turn over rate for Analyzing purposes.
20
DATA ANALYSIS
21
3.1 Analysis
The main objective of this chapter is to find out the reasons behind the increasing labour turnover of past few years, for this purpose the labour turnover rate of last six years has been analyzed. The analysis has been focused mainly into two different areas Section A Analyse the data of labour turn over of last six years to find out the Characteristics of the target group Section B Analyse the data to find out the reason behind the labour turn over.
3.1.1 Section A Analyse the data of labour turn over of last six years to find out the Characteristics of the target group The analysis has been carried out using six different indicators to find out the characteristics of the labour turn over, the six indicators of the characteristics listed below. Analyse Labour Turn Over During The Last Six Years According Voluntarily Resigned/Retired Employees. (VRS) Analyse Labour turn Over Rate according To Gender Distribution. Annals Labour Turn Over Rate According To Level Wise. Analyse Labour Turn Over According To Working Experience With In The Company Analyse Labour Turn Over According To Age. Analyse Labour Turn Over According To Education Qualifications Of Employees.
22
3.1.1 Section A 3.1.1.1 Analyse Labour Turn Over Rates of Last Six Years
Year 2003 2004 2005 2006 2007 2008 Labour Turn Over Rate 4% 5% 6% 6% 8% 10%
23
3.1.1.2 Analyze Labour Turn Over During the Last Six Years According Voluntarily Resigned/Retired Employees
Year 2003 2004 2005 2006 2007 2008 Resigned Employees Percentage 3% 4% 5% 4% 5% 8% Retired Employees Percentage 1% 1% 1% 2% 3% 2%
24
25
26
Degree Partly Qualified 2003 2004 2005 2006 2007 2008 2 3 2 3 5 9 8 7 10 17 19 28 1 4 1 1 Fully Qualified Partly Qualified 1 5 4 4 5 12 2 2 1 1 Fully Qualified 1
Degree
27
28
The analysis has been done according to the gender distribution and the observation is that during the observed period more number of male employees has left the company and it should be noted that according to the company human resources policy the company should have a gender balance of 55% to 45% that is 55% of the workforce should comprise of male employees. It is interesting to analyze the education level of employees who left the organization, as mentioned in the introduction to the company, the companys policy is to attract school levers and gradually build their professional skills, for this purpose the company has designed a well-planned study assistance scheme and also the company organizes different types of workshops to upgrade the skills of employees. But when analyze the education qualifications of the employees who let the company it can be notice that most of the employees who has resigned are partly or fully professionally qualified employees. When analyze labour turn over according to work experience it can be notice that most of the employees who has resigned has worked in the company 2 to 6 years. When analyze the age groups of labour turn over, it can be observed that most of the employees has resigned with in the age groups of 20 to 29 and 30 to 39. 3.1.2 Section B - Analyze the data of exit interview of last six years to find out the reason behind the employee turn over. (Exit interview results of employees, who retired from the service during the last six years not considered)
29
30
employees, 46% of the employees have given the reason for them to leave the company as Remunerations & Benefits. 15% have given the reason for them to leave the company as conflict with the supervisor, 69% of the employees have left the company for career development. 61% of the employees have left the company due to lack of job satisfaction and 76% of the employees who left the company have given the reason for them to leave the company as lack of prospects. 115 employees have left the company in the year 2005. 60% of the employees who left the company have given the reason as Remuneration & Benefits for them to leave the company. 6% of the employees have left the company due to conflict with supervisor. 66% of the employees have left the company for career development, 73% of the employees have left the company due to lack of job satisfaction and 66% of the employees have given the reason as lack of prospects. In the year 2006, 122 employees have resigned from the company, out of these 22 employees, 68% of the employees have given the reason for them to leave the company as Remuneration and 77% of the employees have given the reason as benefits. 86% of the employees have said that they are leaving the company because of lack of job satisfaction, 81% of the employees are given the reason as lack of prospects for them to leave the 24 organizations and it can be observed that all the employees who left the organization during the year have mentioned career development as a reason for them to leave the organization. In the year 2007, 129 employees have left the organization, out of these 29 employees 75% have given the reason for them to leave the company as remuneration, 82% of the employees have left the company due to benefits, 6% have given the reason for them to leave the company as family related issues. 86% have left the company due to lack of job satisfaction and 93% have said that they leave the company as there is lack of prospects and career development.
31
In the year 2008 the company turn over rate was 10%, 139 employees have left the company voluntary during year 2008 and out of 139 employees, 76% have given the reason for them to leave the organization remuneration & benefits, 7% have said that they leave the organization because they have a conflict with supervisor, 5% of the employees have not disclosed the reason for them to leave the company. 87% of the employees have resigned due to lack of job satisfaction and 94% of the employees have left the organization for career development and as they felt there was lack of prospects for them with in the company.
Employees have given the reason for them to leave the company as career development, employees have given the reason for them to leave the company as lack of job satisfaction and employees have given the reason for them to leave the company as lack of prospects. Furthermore it can be notice that most of these employees are below 40 years of age and have partly or fully qualified in professionally, they have gain 2 to 6 years of working experienced with in the company, but most of these employees were in the assistant level.
32
The company has a very tall structure, the assistant level has divided in to 7 sub grades and the promotions are mainly based on the seniority, therefore for an employee to become an officer it takes more than 7 years. The telecommunication industry of Sri Lanka fastly grew during the last six years.
33
RECOMMENDATIONS
34
4. Recommendations
4.1 The company structure
The company has a very tall structure, when there is a tall structure the freedom and responsibility of employees (subordinates) is restricted. Decision-making could be slowed down, as approval may be needed by each of the layers of authority. Communication has to take place through many layers of management. High management costs because managers are generally paid more than subordinates. Each layer will tend to pay its managers more money than the layer below it, the company has 7 sub grades in the assistance level, as a result it takes more than 7 years for a assistant level employee to promote to the executive level, during last six years many employees left the company as they felt there is no career development for them, so it is strongly recommended to reconsider the company structure especially at the assistant level.
35
36
to a workplace culture of respect and appreciation for employees and work well done, and thereby reinforce employee commitment to the firm.
37
or her information about how to cope with the demands of the workplace, and any possible problems that may arise.
Phased in retirement
While employee retention practices seek to retain workers, knowledge transfer practices seek to retain skills, through both formal and informal exercises in information sharing and the building of collective knowledge. Mentoring and coaching, phased-in retirements, and cross training and job rotation, are types of knowledge transfer that overlap with training. Knowledge transfer also includes the use of technology-based tools, databases, and intranets, aimed to support knowledge sharing among individuals, and to permanently document and keep knowledge that is vital to business performance.
39
APPENDIX
40
41
REFEREANCES
REFERANCES
BOOKS
Dessler G., Human Resource Management, 7th Edition, Prentice Hall of India, 2000. Brab Wingfield and Janice Berry Retaining Your Employee Robbins, S.P., Organizational Behavior, 9th Edition, Prentice Hall of India, 2000.
RESERCHES
42
Clarence Lochchead & Alex Stephens Employee Retention, Labour Turnover and Knowledge Transfer April 2004 K Morrell, J Loan Clarke and A Wilkinson Unweaving Leaving: The use of Models in the Management of Employee Turnover
Annual Reports
Annual Reports of the company where the study is based on 2008 2009.
INTERNET
Development Dimensions International Are You Retaining the Best Employees? www.dialog.lk
43