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A Comparative study on Employee Retention

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BBA Semester III

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Delhi School of Professional Studies and Research

(Affiliated to Guru Gobind Singh Indraprastha University, New Delhi)

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A comparative study on employee retention

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A comparative study on employee retention

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Sample of TABLE OF CONTENTS

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A comparative study on employee retention

INTRODUCTION...................................................................................................................................

OBJECTIVE OF THE STUDY...........................................................................................................15

REVIEW OF EXISTING LITERATURE............................................................................................19

LIMITATIONS OF THE STUDY....20

CONCLUSION.....................................................................................................................................64

BIBLIOGRAPHY.................................................................................................................................65

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1 Introduction
EMPLOYEE RETENTION
Effective employee retention is a systematic effort by employers to create and foster an environment that
encourages current employees to remain employed, by having policies and practices in place that address
their diverse needs. A strong retention strategy, therefore, becomes a powerful recruitment tool.
Retention of key employees is critical to the long-term health and success of any organization. It is a
known fact that retaining the best employees ensures customer satisfaction, increased product sales,
satisfied colleagues and reporting staff, effective succession planning, and deeply embedded
organizational knowledge and learning. Employee retention matters as organizational issues such as
training time and investment, lost knowledge, insecure employees, and a costly candidate search are
involved. Hence, failing to retain a key employee is a costly proposition for an organization. Various
estimates suggest that losing a middle manager in most organizations costs up to five times his salary.
Intelligent employers always realize the importance of retaining the best talent. Retaining talent has
never been so important in the Indian scenario; however, things have changed in recent years. In
prominent Indian metros at least, there is no dearth of opportunities for the best in the business, or even
for the second or third best. Retention of key employees and treating attrition troubles has never been so
important to companies.
In an intensely competitive environment where HR managers are poaching from each other,
organizations can either hold on to their employees tight or lose them to competition. For gone are the
days when employees would stick to an employer for years for want of a better choice.
opportunities are abound.
.

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A comparative study on employee retention

The Importance of Retaining Employees

The challenge of keeping employees, its changing face has stumped managers and business owners alike.
How do you manage this challenge? How do you build a workplace that employees want to remain with
and outsiders want to be hired into? Successful managers and business owners ask them these and other
questions because, simply put, employee retention matters.

High turnover often leaves customers and employees in the lurch; departing employees take a
great deal of knowledge with them. This lack of continuity makes it hard for the organizations
to meet their goals and serve customers well.

Replacing employee costs money. The cost of replacing an employee is estimated at up to twice
the individuals annual salary (higher for positions based on their level within the interorganizational hierarchy, such as middle management) and this does not even include the cost of
lost knowledge.

Recruiting employees consumes a great deal of time and effort, much of it futile. There is not
just one organization out there vying for qualified employees, and job searchers make decisions
based on more than the sum of salary and benefits.

Bringing employees up to speed takes even more time and when an organization is short-staffed,
they often need to put in extra time to get the work done.

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The 3 Rs of Employee Retention

To keep employees and keep their satisfaction levels high, any organization needs to implement each of
the three Rs of employee retention: respect, recognition, and rewards.

Respect is esteem, special regard, or particular consideration given to people. As the pyramid
shows, respect is the foundation of keeping your employees. Recognition and rewards will have
little effect if you do not respect employees.

Recognition is defined as special notice or attention and the act of perceiving clearly.
Many problems with retention and morale occur because management is not paying attention to
peoples needs and reactions.

Rewards are the extra perks you offer beyond the basics of respect and recognition that make it
worth peoples while to work hard, to care, to go beyond the call of duty. While rewards
represent the smallest portion of the retention equation, they are still an important one.
You determine the precise methods you choose to implement the three R's, but in general,
respect should be the largest component of your efforts. Without it, recognition and rewards
seem hollow and have little effect or they have negative effects. The magic truly is in the mix
of the three.

When implemented, the 3 R's approach yields reduced turnover and the following benefits:
Increased productivity,
Reduced absenteeism,
A more pleasant work environment (for both employees and management/employer),
Improved profits.
Furthermore, an employer who implements the three R's will create a hard-to-leave workplace, one
known as having more to offer employees than other employers. It becomes a hard-to-leave workplace
one with a waiting list of applicants for any position that becomes available purposefully, one day at a
time.

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Objectives of the Study

To find the factors that influence employee retention

To find the factors which motivates the employee to retain in organization

To make recommendation for future research.

To understand the relationship between the employer and employees.

It is helpful for the organization to understand the employee relationship regarding human
resource practices in the organization.

PRIMARY OBJECTIVE:

To identify the factors influencing participation in employee retention activities.

SECONDARY OBJECTIVE:

To identify the employees expectation from the rewards and recognition system.

To ascertain the motivational drivers that help to create a retain workplace.

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Review of Existing Literature

A literature review is a body of text that aims to review the critical points of current knowledge including
substantive findings as well as theoretical and methodological contributions to a particular topic.
1.

EMPLOYEE RETENTION:

Conventional wisdom says that people dont leave companies, they leave bad bosses. Yet our research
and growing evidence from other leadership studies finds that employees leave both good and bad
bosses at almost comparable rates. In our recently published research article with Sumita Raghuram and
Xiangmin Liu, we set out to figure out why.
We began our study by surveying over 700 employees at a large multinational IT firm. We asked them to
assess their managers leadership quality by indicating how much they agreed with five statements that
are widely used in leadership research, includingI know where I stand with my manager; my manager
understands my job problems and needs; and my manager uses his or her power to help me solve workrelated problems. Responses were then combined to obtain a composite score of leadership quality for
each employees manager.
Source: https://hbr.org/2016/03/employees-leave-good-bosses-nearly-as-often-as-bad-ones

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2. Make IT Delightful, and Other Ways to Enchant Your Employees

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In the business world, marketers use enchantment all the time. Revered brands such as Apple or Disney
understand that enchantment leads to attachment, not just loyalty, with their customers. But even the
most customer-savvy organizations often fail to understand that they should also be working to enchant
their employees.
Source: https://hbr.org/2016/02/make-it-delightful-and-other-ways-to-enchant-your-employees

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Top 10 Employee Complaints

Are you interested in discovering your employees most serious complaints? Knowing what makes
employees unhappy is half the battle when you think about employee work satisfaction, morale, positive
motivation, and retention. Listen to employees and provide opportunities for them to communicate with
company managers. If employees feel safe, they will tell you whats on their minds. Your
work culture must foster trust for successful two-way communication.
HR Solutions, Inc., a Chicago-based management consulting firm specializing in employee engagement
surveys, analyzed recurring themes in employee surveys and compiled the following top ten list. These
are the items employees consistently complain about on surveys and in interviews. How many are true in
your workplace?

Higher salaries: pay is the number one area in which employees seek change. You can foster a
work environment in which employees feel comfortable asking for a raise.

Internal pay equity: employees are concerned particularly with pay compression, the
differential in pay between new and longer term employees. In organizations, with the average annual
pay increase for employees around 4%, employees perceive that newcomers are better paid and, often,
they are.
Source: http://humanresources.about.com/od/retention/a/emplo_complaint.htm

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4. Top 10 Ways to Retain Your Great Employees

Key employee retention is critical to the long term health and success of your business. Managers readily
agree that retaining your best employees ensures customer satisfaction, product sales, satisfied coworkers
and reporting staff, effectivesuccession planning and deeply embedded organizational knowledge and
learning.
If managers can cite these facts so well, why do they behave in ways that so frequently encourage great
employees to quit their jobs?
Employee retention matters. Organizational issues such as training time and investment; lost knowledge;
mourning, insecure coworkers and a costly candidate search aside, failing to retain a key employee is
costly.
Various estimates suggest that losing a middle manager costs an organization up to 100% of his salary.
http://humanresources.about.com/od/retention/a/more_retention.htm

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5. Keep Your Best: Retention Tips

Recruiting the right employees and keeping the right employees matters, especially now.

A recent Society for Human Resource Management (SHRM) press release revealed the answer
to the question of what people plan to do when the job market rebounds. The majority of the
Human Resource (HR) professionals and managers surveyed agreed that turnover will rise
significantly once the job market improves. Both groups felt that the job market will improve
within the next year, according to the latest Job Recovery Survey.

The survey is produced by SHRM and CareerJournal.com, the free, executive career site of The
Wall Street Journal, two of my personal favorite sites. The survey results include responses from
451 HR professionals and 300 managerial or executive employees.

"Were surprised by the percentage of executive employees who say they plan to jump ship once
hiring rebounds," says Tony Lee, editor in chief/general manager of CareerJournal.com.
http://humanresources.about.com/cs/retention/a/turnover.htm

1) Employers have a need to keep employees from leaving and going to work for other companies. This
is true because of the great costs associated with hiring and retraining new employees. The best way to
retain employees is by providing them with job satisfaction and opportunities for advancement in their
careers (Eskildesen 2000, Hammer 2000).
2) Employees that are satisfied and happy in with their jobs are more dedicated in doing a good job and
taking care of customers that sustain the operation. Job satisfaction is something that working people
seek and a key element of employee retention (Marini 2000; Denton 2000).
3) Research has shown that there may be many

environmental features that can be created and

maintained to give employees job satisfaction. Pay and benefits, communication, motivation, justice and
leisure time all seem to play a part as to whether employees are satisfied with their jobs, according to
studies which helps to retain employees. (Brewer 2000; Employee 2000; Money 2000; Wagner 2000).
4) The employees are extremely crucial to the organisation since their value to the organization is
essentially intangible and not easily replicated Meaghan et al. (2002). Therefore, managers must
recognize that employees as major contributors to the efficient achievement of the organizations success
(Abbasi et al. (2000)).

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5) Employee engagement, the organizations capacity to engage, retain, and optimize the value of its
employees hinges on how well jobs are designed, how employees' time is used, and the commitment and
support that is
shown to employees by the management would motivate employees to stay in organizations (Johnson et
al (2000)).
6) Knowledge accessibility, the extent of the organisations collaborativeness and its capacity for making
knowledge and ideas widely available to employees,would make employees to stay in the organisation.
Sharing of information should be made at all levels of management.This accessibility of information
would lead to strong performance from the employees and creating strong corporate culture Meaghan et
al. (2002)

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Limitations of the Study

Inexperience and lack of knowledge also created hurdles while carrying out the project

Mindset of people may vary depending upon their age, gender, income etc.

Getting appointment from the concern person was very difficult.

People mind set about the survey was an obstacle in acquiring complete information & positive
interaction.

Respondents were very busy in their schedule. So it was very time taken in every Questionnaire
response by them.

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3 Conclusion
Retention programs often fail because managers do not know and, therefore, do not act on the most
important areas affecting an employees intention to leave.

Across the organizations, individual

development and career advancement stand out as both frequent and critical key drivers of any
employees intent to leave.
While the general conclusions across organizations may appear similar, at a more micro level, the
composition and ordering of specific retention key drivers is unique to each company. In addition, the
meaning attached to specific drivers (e.g., opportunities for personal growth and development) and,
therefore, the actions to be taken may vary by organization.
Before implementing targeted solutions to improve retention, managers need to determine which factors
drive retention in their organization as well as the meaning of those drivers.

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6. Bibliography
Books:
1. Kothari C. R., Research Methodology methods and techniques, Second edition, Wishwa Prakashan
year 1997
2. Cooper Donald R. ,Pamela S. Schindler. Business Research methods,: Eight editions Tata McGrawHill year 2004
3. Aswathappa K., Organizational Behavior , Fifth editions, Himalaya Publishing House year 1989
4. Rao V.S.P, The Human Resource management text and cases, second editions , Excel Books year 1992

Journals
1. The ICFAIn Journal of management and research,Volume V No:2
Februvary 2007, ICFAI university press, Page no 65: Human resource development climate in IT
companies in India.
2. HRM review, Employers brand, ICFAI university press,June 2006

Websites:

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