«ISSN: 2321-7782 (Online) Volume 2, Issue 2, February 2014 International Journal of Advance Research in Computer Science and Management Studies ...»
ISSN: 2321-7782 (Online)
Volume 2, Issue 2, February 2014
International Journal of Advance Research in
Computer Science and Management Studies
Research Article / Paper / Case Study
Available online at: www.ijarcsms.com
Review Paper – Study on Employee Retention and Commitment
Dr. Mita Mehta1 Aarti Kurbetti2
Symbiosis Institute of Management Studies (SIMS) Symbiosis Institute of Management Studies (SIMS)
Symbiosis International University (SIU), Symbiosis International University (SIU), Range Hills Road, Khadki, Pune – 411 020, Range Hills Road, Khadki, Pune – 411 020, Maharashtra – India Maharashtra – India Ravneeta Dhankhar3 Symbiosis Institute of Management Studies (SIMS) Symbiosis International University (SIU), Range Hills Road, Khadki, Pune – 411 020, Maharashtra – India Abstract: Today employee commitment and retention has become an important strategic aspect for the organisation. It is not only important to have the best and the most talented employees but it is equally necessary to be able to retain them for long term benefits to both the organisation and its people. The purpose of this paper is to review the findings of research papers of various authors to derive the factors that impact employee commitment and retention in a work environment. This study examines the following factors: career development opportunities, effective talent management strategies, recruitment, on boarding and orientation, investment in training and development, compensation and benefits, work life balance, culture of the organisation, leadership, communication, image of the company, autonomy and empowerment, Gallup audits, personal causes, role of HR head and supervisors, work related policies and flexi time, performance appraisals and career growth and development opportunities. There are no one fixed practices which show the importance and significance of the influence of all these above broad points because different organisations lay different emphasis on these pointers depending upon their suitability impacting retention. Based on our understanding of the papers reviewed by us, suggestions are drawn which give a holistic view on the various practices that organizations should adopt to keep the level of employee retention and commitment high.
Keywords: Retention, factors, commitment, motivation, benefits.
In this review paper we study about the various HR practices that help employee retention and foster employee commitment in the organization. Today employee retention is the top priority of organizations due to increasing competition. It is an efficient and productive advance towards the employee management who are considered to be ‘greatest assets' to the company. To manage top talent it requires a constant balance between the human aspirations and the strategic and financial needs of the business. Employee retention is a technique adopted by businesses to maintain an effective workforce and at the same time meet operational requirements. People related issues for example-compensation and benefits, hiring, administration, organisation development, employee motivation, wellness, benefits, safety, communication, performance management, and training are dealt by it. HR practices in an organisation are used for talent acquisition i.e. recruitment, selection, training and development, reward management, performance appraisal etc. Human Resource Management handles people, work place environment and culture in a strategic manner.
Employee commitment is also very important for maintaining a highly talented workforce. With best possible use and application of HR policies in the organisation, employee commitment can be enhanced leading to better performance, improving employee attitude/ morale and reduced employees turnover, which is the aim of the human resource practices.HR
For managers, to have a happy enthusiastic workforce will help him in achieving individual and organizations performance.
But manager’s job is not only to hire best candidates but also retain them. Most certainly one cannot retain all the best employees but can definitely reduce loss. Reducing employee turnover is most important for organizations and to maintain an ideal staff takes a lot of efforts and resources of the organization and if that is lost it hampers organizations success. Therefore, every organization must treat their employees as ends and not means to ends because they add value to the organization.
Objective of this review paper is to identify the best practices and methods adopted by various organizations across industries to help enhance commitment and employee retention.
Best HR practices for employee retention and commitment During the course of our research several HR practices have been found to help employee retention and enhance employee commitment in an organisation which is discussed in the following work.
1 Career development opportunities The recent trend of high employee turnover is due to the various reasons such as employees not being happy with the kind of work they do, lack of investments in training and development, lack of career growth and development opportunities, unfair and misleading performance appraisals, etc. Strategic ways for retaining top talent in the organisation is by helping high potential employees have cross functional job for job and work related satisfaction, involvement in decision making, encouraging their ideas and helping them implement them, help in career development moves, skill building through effective and relevant training (Hay 2001).
The reasons for low turnover which employees have mentioned are work experience, career development, independence, etc. All these motives of employees help organizations to align HR practices accordingly and help them with employee retention (Brigitte Kroon and Charissa Freese 2013). Also employees must be able to see a clear career path in the organization, only then they will stay for long (Gaurav Bagga 2013).
Retention practices give more importance to factors affecting to cause employee turnover (career opportunities and financial rewards) than on those believed to affect employee retention (social atmosphere, job content, work-life balance).
Career opportunities have the strongest impact on employee commitment while the impact of financial rewards is less. Ways recommended for reducing employee attrition are career development, considered to be one of the most important factors.
Providing great career development opportunities makes the employees to stay in the company for long and at the same time enhances their loyalty to the firm. Also creating a positive social work environment and adding content to the jobs and tasks to be done by the employees enhances employee satisfaction and commitment (Meganck, 2007).
2 Effective talent management strategies Employee retention and talent management practices of successful companies are fundamental element to maintain their leadership and development in the marketplace. Employee engagement and retention lead to higher customer satisfaction and
Best practices for employee retention would be by recruiting the right person in the first place (Oracle white paper 2012).
Organization's talent management, recruitment and retention policy and practices can significantly reduce attrition rates (Frankeiss 2008).It is important and difficult to retain talented employees under high unemployment levels. It is important to retain them because of high training and recruitment costs so organizations use rewards to retain employees (Simon North 2011).Ways and methods suggested to improve employee retention and commitment include better recruitment and training & development practices to improve employee satisfaction with work (Deery 2008).A lot of employees in the BPO/ITES sector get new offers within three months of joining which leads to wastage of recruitment and training costs. Hence, it is very important to recruit the right candidate and keep him engaged so that he will not leave the organization (Jyotsna Bhavnagar 2008).
4 On boarding and orientation
It is mentioned that induction plays a major role in employee retention and increases loyalty towards the organization (Gaurav Bagga 2013). Also as mentioned in above point a lot of employees leave withing first three meonths of joining so it is clear that if proper induction of new joinees is not done they will tend to leave the organization. A well planned orientation program must be planned to help retain employees.
5 Investment in Training & Development
On the job training opportunities and better training and development practices improve employee retention and commitment (Deery 2008).HR practices motivate and empower workers which lead to employee’s devotion to the business. But HR practices for recruiting and training do not necessarily increase employee’s loyalty to the organization. Such HR practices which try to bring skills in house or develop current employees actually increase turnover (Patrick M. Wright, Timothy M.
Gardner and Lisa M. Moynihan 2011).
In order to keep attrition low, managers must provide sufficient training to employees to attain the necessary KSA to perform better, so that older employees in the organisation are at the same expertise level as compared to their younger counterparts (Ian M. Taplin, Winston-Salem and Jonathan Winterton 2007). Well trained workers stay loyal to their employees (Sarah Leidner 2013).
Access to training, adjusting training practices as per older employees requirements and an age awareness training program is required for better older employee retention (Marjorie Armstrong-Stassen and Andrew Templer 2004). Lastly, it is important to retain employees otherwise it leads to wastage of training costs.
6 Compensation and Benefits
Various reasons cited for employee attrition are-dissatisfaction with internal job postings, work profile, personal causes and finally dissatisfaction with compensation/ salary (Bhatnagar 2007). So for better retention of talent organizations must improve pay/compensation and benefits and also factors like good working conditions, flexible work timings, cooperative teams, good bosses, culture and values of the organisation (Devi 2009). Other ways to improve employee retention and commitment includeproviding flexible work hours, on the job training opportunities, providing adequate resources for the staff, health and insurance benefits, perks like gyms, health centers, rewarding best employees for not only getting the task done on time but also doing it efficiently (Deery 2008).
© 2014, IJARCSMS All Rights Reserved ISSN: 2321-7782 (Online) 156 | P a g e Dr. Mita et al., International Journal of Advance Research in Computer Science and Management Studies Volume 2, Issue 2, February 2014 pg. 154-164 Factors that help to keep a person loyal and committed to the organization like having job security, interesting and challenging work, opportunity to learn new skills and a flexible working environment with good reputation, culture, values, competitive salary and benefits package that suit the individual. Salary is a significant factor that affects a person’s decision to stay or leave the company. Challenging work of compensation department is salary differentials, both within the organisation and in the industry. A valued employee should be given a salary package at par or more than the existing industry average to get him/her to stay within the organization. But at the same time giving more money can have undesired side effects. Firstly it makes other employees develop a mind-set that the way to get a pay hike is by frightening to leave and secondly when an employee is at the top of his/her salary scale and is offered more money for performing the same duties, it will affect organization-wide differentials (David Pollitt 2007).Therefore, it is important to retain them because of high training and recruitment costs so organizations use rewards to retain employees (Simon North 2011).
Employee retention is essential to have a competitive advantage in today’s date. Providing emotional support and work life balance to employees helps organizations in low turnover (Osman M. Karatepe 2013).
The role of work life balance has a direct relation in employee’s decision to stay or leave the organisation. Job attitudes such as job satisfaction and commitment, personal reasons such as positive and negative feelings, the role of WLB in employee attrition and, finally, the strategies provided to lessen high turnover rates. The recommendations mentioned include the need for norms on working hours, role models at the workplace, flexi work hours and arrangements, effective talent acquisition and training practices. It has been observed that stress and its various components like emotional exhaustion and job burnout are the major causes of high employee turnover. Ways and methods suggested to improve employee retention and commitment in the hospitality sector include better recruitment and training & development practices to improve employee satisfaction with work and also have WLB (Deery 2008).
8 Culture of the organization
Employee engagement and retention lead to higher customer satisfaction and loyalty especially in the services sector.
Reasons that lead to employee engagement which not only comprise of pay/compensation and benefits but also factors like good working conditions, flexible work timings, cooperative teams, good bosses, culture and values of the organisation (Devi 2009).Organizations with excellent name, way of life, values, good salary and benefits package for their employees can also help employee retention (David Pollitt 2007).Various reasons cited regarding employees decision to stay were organisational culture, support from peers and superiors, growth opportunities, issues related to compensation, employee engagement activities, training and development, positive work environment and good working conditions (Satyawadi, Joshi, & Shadman, 2011)