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 dont 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 dont, 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
1 Need of the study
2 Scope of the study
2. Research methodology
1 Objective of the study
2 Research methodology (Sample size, Instrument used, Methods

of data collection)
3 Scope of the study
4 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. Its 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
1 Basic wage
2 House rent allowance
3 Dearness allowance
4 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 employees 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.
1 Employers And Their Key Drivers To Attract And Retain Talent
2 Employers Key Drives To Attract And Retain Talent

Procter and Gamble India

1 Early responsibilities in career
2 Flexible and transparent organizational culture
3 Global opportunities through a variety of exposure and diverse

experiences
4 Performance Recognition

American Express (India)

Strong global brand
Value-based environment
Pioneer in many people practices
NTPC
Learning and growth opportunities

1 Competitive rewards
2 Opportunity to grow, learn and implement
3 Strong

social security and employee welfare performance-

oriented culture.
Johnson & Johnson
1 Strong values of trust, caring fairness, and respect within the organization
2 Freedom to operate at work
3 Early responsibility in career
4 Training and learning opportunities
5 Visible, transparent and accessible leaders
6 Competitive rewards
7 Innovative HR programs and practices

Glaxo Smith Kline Consumer Healthcare

1 Performance-driven Rewards
2 Its belief in Growing our own timber
3 Comprehensive development and learning programs
4 Flat organization, where performance could lead to very

quick progression
5 Challenging work context
6 Competitive rewards
7 Exhaustive induction and orientation program

Tata Steel
1 Organization philosophy and culture
2 Job stability
3 Freedom to work and innovate

Colgate Palmolive India

1 Company brand
2 Open , transparent, and caring organization
3 Management according to the managing with respect to

guiding principles
4 Training ad development programs
5 Structured career planning process
6 Global career opportunities

Wipro
1 Companys brand as an employer
2 Early opportunities for growth
3 High degree of autonomy
4 Value compatibility
5 Innovative people program

Indian Oil Corporation

Company

brand

image Work ethics

Learning and growth opportunities
Challenging work assignments

Growing organization
TCS
1 The group brand equity
2 Strong corporate governance and citizenship
3 Commitment to learning and development

1 Best in people practices

2 Challenging assignments
3 Opportunity to work with fortune 500 clients
4 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
1 Appreciation for the work done
2 Ample opportunities to grow
3 A friendly and cooperative environment
4 A feeling that the organization is second home to the

employee Organization environment includes

5 Culture
6 Values
7 Company reputation
8 Quality of people in the organization
9 Employee development and career growth
10 Risk taking
11 Leading technologies
12 Trust

Types of environment the

employee needs in an
organization

1 Learning environment: It includes continuous learning and

improvement of the individual, certifications and provision for

higher studies, etc.
2 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
1 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 individuals career. If an employee can not foresee his path of
career development in his current organization, there are chances that
hell leave the organization as soon as he gets an opportunity. The
important factors in employee growth that an employee looks

for himself are:

1 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.
2 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 hes not satisfied
with his growth, hell 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, theyll leave
the organization for better jobs. Organization should not limit the
resources on which organizations 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 employees
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.
1 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.
2 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.
3 Recruit whole heartedly: An employee should be recruited if there is a

proper place and duties for him to perform. Otherwise hell 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 hell show the same for the organization.
An employee based culture may include decision making authority,
availability of resources, open door policy, etc.
1 Individual development: Taking proper care of employees

includes acknowledgement to the employees dreams and personal

goals. Create opportunities for their career growth by providing
mentorship programs, certifications, educational courses, etc.
2 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:
1 By providing feedback
2 By giving recognition and rewards
3 By counseling them
4 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:

1 Dichotomous scale (Yes or No)
2 Likert 5 point scale (Highly satisfied, satisfied, Neither

Satisfied nor dissatisfied, Dissatisfied, Highly dissatisfied)

3 Category scale (Multiple items)
4 Ranking type (R1, R2, R3)

framed in a clear manner such that it

The questionnaire for the research was 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:
Hypothesis (Ho): There is no difference in
attributes
2. Alternate Hypothesis(H1): There is a difference in
attributes
3. Level of significance = 0.05
4. Degrees of freedom = (r-1)(c-1)
5. Expected
frequency: E = R.T
C.T
6. Calculation of :
= (O-E)2
7. The tabulated value of at given level of significance
with (r-1)(c-1)
1. Null

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 r = 2 n1 n2 + 1
n1 + n2

2 n1 n2- n1n1 r = 2
n1n2
(n1+ n2)2 (n1+ n21 ) Lower limit = r +
(2.58) Upper limit
= r + (2.58)
KENDALLS COEFFICIENT OF CONCORDANCE:
Null hypothesis (H0): There is a difference in
attributes Alternate hypothesis (H1): There is no
difference in attributes Rj = (Rj-Rj)2
S= Rj = 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

demography, age condition of economy etc.

due

to

area,

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.
KENDALLS 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.

EMPLOYEES 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
leaders 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 peoples 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 leaders
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:

1 Low,
2 medium and
3 high level.
4 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 messages 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 employees 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
1 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
1 Regular feedbacks on organizations 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.
1 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 organizations 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 todays 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 individuals 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 organizations 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 managers 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:

1 It builds trust and enhances communication between

manager and employee.

2 It gives managers and employees a way to identify and discuss

skills and strengths.

3 Positive feedback leads to employee retention and Retention.

4 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 managers side is necessary as it help employees to
improve their performance and increase productivity.

5 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 dont 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 wont 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 candidates 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 organizations 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. Dont 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.
Dont show them an unrealistic picture Culture fit: Try to judge
individuals capability to adapt to the organizations 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 dont 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 dont 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 employees 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.
1 Rewards should be visible to all members of the organization.
2 Rewards should be based on well-defined, credible standards

that have been developed using observable achievements.

3 Rewards should have meaning and value for the recipient.
4 Rewards can be based on an event (achieving a designated goal) or

based on a time frame (performing well over a specific time period).

5 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.
6 Rewards should be achievable and not out of reach by employees.

1 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
1 Appreciation letter from the CEO and senior management
2 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):
1 Employee of the month awards Years of service awards
2 Bonus pay (above and beyond overtime) for weekend work
3 Invitations for technicians to technical shows and other industry events
4 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 todays
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 firms 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

employees 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 workatmosphere 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
leaders 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 peoples 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
leaders 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.

FINDING
S

1 It is found out that, 40% of respondents are aware of HR Policies

and 60 % of respondents are not aware of HR Policies.

2 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.
3 It is found out that, 82% of respondents are able to meet superiors

expectation and 18% respondents are not able to meet superiors expectation.
4 It is found out that,57% of respondents feels that there pay is on

par with compare to employees handling similar responsibilities, and

39% of respondents feels that there pay is less with compare to
employees handling similar responsibilities.
5 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.
6 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.
7 It is found out that, 78% of respondents skills are recognized by

superiors and 22% of respondents skills are not recognized by superiors.

8 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.
9 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.

10

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.
11

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.
1 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.
2 From weighted Average analysis it is found that most of the

respondents are satisfied with the working hours of the organization

3 From

weighted Average analysis it is found that roles &

responsibilities are clearly defined by the Reporting heads.

4 From weighted Average analysis it is found that employees feel

that their superior's commitment towards job is good.

5 From weighted Average analysis it is found that respondents feel

that training and orientation programs are neither good nor bad.
6 From weighted Average analysis it is found that most of the

respondents are satisfied with job.

7 From chi-square it is found that there is a significant relationship

between Work Culture of the Company and interpersonal relationship

between employees.
8 From chi-square it is found that there is a no significant relationship

between overall satisfaction and Commitment towards Company.

9 From chi-square it is found that there is a significant relationship

between overall satisfaction and aspects of job.

10

From Kendalls 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.
SUGGESTIO
NS

11

1 Employee should be provided with proper training.

2 Employee should be appreciated for good work.
3 Employee should be motivated to welcome the change.
4 If any changes are brought in to software or any module is

added then proper

5 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 Herzbergs, 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 employers 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 multidimensional 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 employees 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
1 Human Resource Management C.B.Memoria
2 Research methodology C.R.Kothari

 Journals, Newspaper and Internet

For more Notes, Presentations, Project Reports visit
1 a2zmba.blogspot.com
2 hrmba.blogspot.com
3 mbafin.blogspot.com