A New Look at an Old Problem of Attrition and Retention


By

Dr. Deepali Monga
Ph.D, UGC-NET, MHRD, M.A., DIFT
Asst. Professor
Vidya School of Business
Meerut

Dr. Ruchi Srivastava
Ph.D, MBA, DCM
Associate Professor
KIET
Ghaziabad
 


Abstract

Employee retention has become a major concern for organizations of any nature.  Employee attrition is a costly dilemma for all organizations. In one of the survey it was found that 90% of those firms surveyed said it was more difficult to retain talented individuals than it was several years before. Therefore, it is imperative that organizations and managers recognize that retention must be a continuing HR emphasis and a significant responsibility for all supervisors and managers.

That is the reason which calls for investigation and research in the field. This article explores the challenges of retaining employees, the reasons and prime factors for employee attrition and some retention strategies. As companies usually think that giving a hike in salary to retain employees will solve a problem but this however is no longer helpful in solving the problem.

The main objective of this paper was to find the reasons of employee turnover in the professional institution and another objective of the research was to study the strategies to be employed, which should be adopted by the professional institutions to retain their employees. Through this article we wish to bring out other reasons that makes employee quit an organization and focus on the pragmatic, innovative and effective attrition management strategies in order to retain talent in the organization.

Introduction: The Concept

Retention is a big and a constant challenge for every organization today whether to talk of any corporate sector or any educational institution. It is a Herculean task for most organizations in the modern era of globalization and competitive business. HR professionals all over the world are breaking their heads to formulate Retention Strategies but nothing is working-out in their favour.

The need to increase recruiting and retention effectiveness is a flaming issue worldwide. The business benefits of these approaches are reaching into the developing world—an encouraging sign that the learning's of human capital management can help raise global workforce standards. Some employers have placed such a high priority on employee retention that they have designated an individual as the retention officer for the firm.

Definitions and Meaning

An effective Employee Retention Program is a systematic effort to create and foster an environment that encourages employees to remain employed by having policies and practices in place that address their diverse needs. Retention-rich organization culture is required today that attracts, engages and builds lasting loyalty among today's most skilled and talented employees.

The growth of attrition rate has been a major concern for the last couple of decades. The words 'attrition' and 'retention' are profoundly significant in the context of corporate and professional institutions. Attrition is the separation of employees from an organization, due to resignation, retirement etc. It may be defined as the lose of workforce due to unavoidable circumstances. It is growing everyday and creating havoc.

A study was conducted by William A. Brown, Carlton F. Yoshioka, Department of Recreation Management and Tourism, Center for Nonprofit Leadership and Management, College of Public Programs, Arizona State University on "Mission attachment and satisfaction as factors in employee retention". That article also focuses on retention of employees as major concern.

The Problem/The Challenge Today

Acquiring or recruiting is a big challenge but motivating and retaining potential employees is equally vital function for HR managers. Selecting and retaining top-notch staff is a key for business success and effectiveness. It is very frustrating for an organization to go through the entire process of hiring and training, only to find employees leaving after two months or sometimes even quitting after the training period is over. On the one hand, with increasing work opportunities, organizations which provide challenging and competitive work environments are seeking talent. On the other hand, retaining these key employees has become a vital task for the long-term success of any organization. Employee turnover is increasing day by day, that means lost productivity, lost expertise, lower quality and lost business opportunities, higher recruitment cost for the employer.

According to a study by Ipsos–Reid , 30% of employees plan to change jobs in the next two years. Most leaving employees seek opportunities that allow them to use and develop their skills. Leaving employees want more meaning in their work meaning challenging the challenges. They often indicate that they want to use their qualities and skills in challenging teamwork led by capable leaders.

Employees stay or leave their jobs and organizations for various different reasons. Those terminated leave the organizations because management wants but those who leave organizations voluntarily is the matter of great concern. One survey done by McKinsey & Company, it is a large international consulting firm, emphasized the importance of retention by concluding that employers face "a war for talent." The McKinsey studies done several years apart found that that most critical factors affecting the attraction and retention of managers and executives can be classified into three areas. The areas, key items, and percentage responses are listed below:

Great Company
- Value and Culture (58%)
- Well managed (50%)
- Company has exciting challenges (38%)

Great Job
- Freedom and autonomy (56%)
- Job has exciting challenges (51%)
- Career advancement and growth (39%)

Compensation and Lifestyle
- Differentiated pay package (29%)
- High total compensation (23%)
- Geographic location (19%)
- Respect for lifestyle (12%)

Causes of the Problem

Common Reasons for Quitting the Institutions:

1. Inadequate Compensation Systems
2. Inequitable Salary Distribution
3. Different Rule For Different Employees And Favouratism
4. Discrimination On The Basis Of Gender (Inequality Of Treatment) That Cause Dissatisfaction
5. Ineffective Role Of Leader and Dictatorial control.
6. Lack Of Qwl: Poor Working  Environment 
7. Poor Work Relationship
8. Poor Career  Planning And Development
9. Higher Education
10. Already Recruited In Corporate Sector
11. Work Overload
12. Organisational/Work Stress
13. For Attractive Designation And Posts
14. Lack Of Interest
15. Family Reasons
16. Lack Of Opportunity To Utilize And Display Talent
17. Lack Of Interest
18. By Mistake Falls In That Particular Job, Incompatibility With Job Requirement
19. Excessive paper work and working on holidays
20. Lack of Autonomy

Now let us find in detail some common determinants-

Inadequate Compensation policies and its Systems

* Inadequate Compensation policy
* Salary system and Increments Based on Biasness
* Promises made but not kept in case of Increments/hikes
* No. of Increments are not based on certain criteria
* Long and cumbersome procedure while applying for leaves

3. Lack of QWL: Poor Working  Environment and Work Relationship

* Inadequate Educational Aid & Equipments
* Long and Cumbersome procedure in using Equipments
* Excessive Centralization or Autocratic rule of Authorities
* Lack of Recognition of Achievement and high Performance
* Lack of Encouragement and Motivational Environment
* Lack of Policies in everywhere and not communicated to the faculty members so that one may know what is expected and what not
* System lacks Transparency
* Poor Performance Appraisal and feedback system
* Conflicts and Grievances not tackled or handled  in an effective way

4. Poor Career  Planning and Development System and Growth:

* Stagnation                     
* Discourage Training, Development & Research Programme
* Boredom due to Monotonous  Nature of Work            
* Lack of sponsorship for skill development programmes
* Lack of leaves grant for development programmes
* Biasness while selecting employees for development related programmes, sponsorships and leaves,etc.     

5. Different Rule for different employees and Discrimination on the basis of Gender (Inequality of Treatment) that cause dissatisfaction:

1. Poor Leadership:

* Inefficient Leader
* Leadership style
   - Autocratic
   - Free Rein
   - Weak Leader: "Deaf-Dumb-Blind" category of leader known as "Paralysed Leader"
   - Coward Leadership
* Gender biased Leader
* Takes credit of all good Achievements and defects imposed on employees

Effective Retention Strategies:

Attractive and Equitable Compensation Administration Systems:

Effective and sound remuneration policy must be constructed to attract, maintain and retain talented faculty in the institution.

* Compensation should be according to one's qualification, potential, skills present, in use and potential to use in future, experience, other achievements as research paper presentation, seminars attended and conducting any event, etc.
* Reward on Knowledge acquisition, storing, sharing and utilizing.
* Increments and incentives must be regular and based on performance rather than biasness.
* Consistently reward outstanding performance.
* Do recognize the achievements if made any. Growth should be awarded and encouraged in order to make an organization a LEARNING ORGANISATION.

Proper Career  Planning and Development System growth:

* Do recognize the achievements if made any. Growth and development should be recognized and encouraged in order to make an organization a LEARNING ORGANISATION and making LEARNING on an ON-GOING basis.
* One's qualification, skills present, in use and potential to use in future, experience, other achievements as research paper presentation, seminars attended and conducting any event, etc. should be appreciated and recognized.
* Reward on Knowledge acquisition, storing, sharing and utilizing.
* Faculty development Programme should be organized frequently.
* They should be sent by the instituton to various FDPs, MDPs and Workshops to enhance their skills.
* Research and development cell as well as training cell should be established, comprising of various materials aid in their development.
* Organizing various seminars and conferences on emerging issues on a regular bases.
* Providing ospportunity for higher education.
* Facility for career counseling, to find out what they want from their career and what you can do to provide and fulfill their goals. Utilizing their multidimensional skills.

QWL:  Good Working  Environment and Congenial Work Relationship:

* Conducive work environment should be provided. Provide your faculty "the best place to work". Make faculty responsible from making institution a better place to work.
* Decision-making power should somewhat be decentralized. Autonomy should be given in decision-making.
* Adequate arrangements of various teaching aids like books, articles, journals, LCD, projector, proper classroom.
* Conflict should be taken in a positive way as functional so that grievances or grudges may be expressed.
* There should a private grievance expression session on regular basis so that the head may deal effectively and bring harmony among his/her team.
* Psychological motivation should be given to faculty to boast up, to encourage them to accept challenging task through non financial incentives like status recognition, job security, sense of belongingness, respect, appreciation, praise,etc.

Leaders Effective and Active Role:

* Senior managers must not take their leadership for granted. Many senior managers believe, `once a leader, forever a leader'. They forget that the title is only temporary and that true power does not lie with them but with the employees.
* Here by leader we mean Director, HOD, Prof-incharge of any committee. Leader should be very active and impartial. To get the work done he should be also be strict enough.
* Instead of becoming the leader he should be the team member, equally rendering all the duties with all others.
* He/she should have qualities like- empathy, team spirit, impartial, sense of responsibility and patience, good understanding of human Psychology, ability to create a balance in different things.
* A leader should be strong and bold enough to speak the truth effectively howsoever it is sweet or bitter that is. He should be straight forward in telling his subordinates where they are wrong or to clear the doubts, instead of acting like a coward and wrapping his grudges in a sugary package and irrelevantly uttering.
* Giving lecture is easy but a leader should make sure does he follows the same or not. He should have internal locus of control.
* Boasting of one as impartial and regards for women a lot is not required rather these things should be depicted in one's behavior and act.

Other facilities or Benefits:

* Sufficient leave and holidays like causal leave, medical leave, earned leave, leave for higher education.
* There should be easy procedure to avail leaves. As it is ones right to have leave.
* Adequate transportations facility.
* Flexible work schedule i.e. 5 days a week and flexible working hours.

Equal/same Rule for All and No Discrimination on the basis of Gender (Equality of Treatment):

* Open communication between peer and heads, clearly communicating goals, responsibilities and expectations irrespective of their gender, caste or religion.
* Transparency should be maintained in policy, Share information promptly, openly and clearly and equally.
* There should be no biasness or favouratism.
* There should be same policy for all whether the employee is near and dear to the authorities or not. Rules should not change as per the person or convenience.
* Culture of courtesy towards women should be strictly infused.
* Etiquettes changes from male to female employees (particularly in education/teaching profession) one should be aware of it or made aware of it.
* Dignity and self esteem women should not be hurt at any cost and the HOD or the management should confirm that.
* Avoid giving any menial or petty task to women employees as sticking chits of roll no on the tables or similar when manpower run short rather such task could be given to males at one point but not to females. Do not let them bend.

Other Retention Strategies or Determinants:

* Collect data from the Exit Interviews
* Start a forum for sharing their ideas for system improvement.
* More than two-way flow of information Communication: 
* Employee participation, a voice in decision-making.
* Improve managers' leadership, communication and interpersonal skills through coaching, training and feedback. Rate these key skills in their evaluations, and tie compensation to performance.
* Share the company vision/mission
* Collaborate, communicate and listen. Contented employees achieve HIGHER JOB SATISFACTION. Consistent communication, teamwork and respect for workers' efforts.
* Organization Culture:
* Organizational Commitment
* Challenge the Challenges
* Agile and  assiduous smart HR team
* Ownership Culture
* Effective and unbiased Performance appraisal and Management System on a continuous basis.
* Training  employees to develop their skills, knowledge
* Reward appropriately.
* Generate data for career planning and succession planning.
* Retention Officer
* Attractive Titles

Conclusion:

To select, motivate and particularly retaining talented people and to create an environment in which talented people continue to grow and stay is the requirement for today. The primary elements of any plan is to improve the quality of the employees, including improving the new hires, motivating, identifying and retaining superior or potential employees, and further developing them.

It has been recognized by both employers and employees that some common areas affect employee retention. If certain organizational components are being provided, then other factors may affect retention. Surveys of employees consistently show that career opportunities and rewards are the two very important determinants of retention. Finally, job design/work factors and fair and supportive employee relationships with others inside the organization and other strategies also contribute to retention. In one survey just 31 percent of respondents indicated making more money was their primary reason for job hunting, it's evident that paying proactive competitive salaries is MUST.

Where employees work with the passion of work and feel that as their own the organisation, are self-motivated and feel proud as part of that organization company. HR team ensures employee loyalty, and bridge the gap between employer and employee. If nurtured, this feeling not only optimizes productivity and excellence beyond expectations, but also helps in fighting attrition

A strategy should be designed that helps in long term. There should be value rich environment of honesty, trust, confidence, makes one proud and happy. Above all it should infuse the core value of integrity. This environment should promote Innovation, Team spirit, Risk-Taking, Problem Solving and Creativity, attractive titles, etc to retain employees.

It is not difficult for SMART team of HRD if the team and its members are really serious and sincere; it also need to be qualified, talented, and skilled and experienced. One very crucial thing is that the team itself should also consider as a vital part of an organization. They should be effective to plan, design and execute of implement the strategies.

References:

* Abrams, Michael, (2001, May) "Raise Performance Bar for Manager to Retain Employee," Patient Care Staffing Report.

* Greene, Marnie E., "Beware and Prepare: the Government Workforce of the Future. Public Personnel Management, Volume 29, Issue 4, Winter 2000. Discusses some of the most critical issues facing government workforce planners.

* Withers, Pam, (2001) "Retention Strategies That Respond to Worker Values," Workforce,Volume 80, Issue 7, July 2001

* Michaels, E., Handfield-Jones, H., & Axelrod, B. (2001). The war for talent . Boston: MA: Harvard Business School Press.

* Oakes, K. (2006, April). The emergence of talent management. Training and Development.

* Law, A. (2003). The aging workforce raises new talent management issues for employers. Journal of Organizational Excellence.

* Rothwell, W. (2005). Reinventing the exit interview as a tool for succession planning and management. In V. V. Ramani (Ed.), Succession planning: Insights and experiences (pp. 126-132). Hyderabad, India: ICFAI University Press.

* Douglas A. Ready and Jay A. Conger. "How to Fill the Talent Gap." The Wall Street Journal, September 15, 2007.

* NG, E.S.W. and BURKE, R.J. (2005) Person–organization fit and the war for talent: does diversity management make a difference? International Journal of Human Resource Management Vol 16, No 7.

* Buenger, V. (2006). Talent management systems: best practices in technology solutions for recruitment, retention and workforce planning. Human Resource Management.

* Rappaport, A., Bancroft, E., & Okum, L. (2003). The aging workforce raises new talent management issues for employers. Journal of Organizational Excellence .

* Rothwell, W. (2005). Reinventing the exit interview as a tool for succession planning and management. In V. V. Ramani (Ed.), Succession planning: Insights and experiences . Hyderabad, India: ICFAI University Press.

Books

* Memoria,C.B.,Personnel Management, Himalaya Publication,New Delhi
* Griffeth, Roger W. and Peter W. Hom, Retaining Valued Employees, Sage Publications, Inc.
* Smith, Gregory, Here Today, Here Tomorrow: Transforming Your Workforce
* Rao,VSP,Human Resource Management,Excel Publication.
  Turnover to High Retention, Dearborn Trade Publishing, Chicago, IL, 2001.
  Discusses causes for high turnover and strategies to improve retention.

Internet Links

* www.businessgyan.com
* www.termpaperslab.com
* www.essaytown.com
* www.emeraldinsight.com
* www.indiaattritionstudy.com/
* www.employeeretentionconsulting.com
* www.recognition.org/strategies.asp A list of links to articles and programs promoting employee recognition strategies.
* www.best-in-class.com/research/bestpracticespotlights/talent_retention_27.htm
  "Retaining Top Talent in a Competitive Market."
* www.citehr.com/134171-attrition-important-your-organization.html
* haripassionhr.com/index.php? 4
* http://www.citehr.com/39064-role-employee-retention.html
 


Dr. Deepali Monga
Ph.D, UGC-NET, MHRD, M.A., DIFT
Asst. Professor
Vidya School of Business
Meerut

Dr. Ruchi Srivastava
Ph.D, MBA, DCM
Associate Professor
KIET
Ghaziabad
 

Source: E-mail December 18, 2008

          

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