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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
DEPARTMENT OF MANAGEMENT
INSTITUTE OF MANAGEMENT EDUCATION,
SAHIBABAD
CERTIFICATE
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.
ACKNOWLEDGEMENT
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.
Compensation:
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.
somebody to take care of them in bad times. It also shows the employee
that the organization cares about the employee and its family.
experiences
4 Performance Recognition
1 Competitive rewards
2 Opportunity to grow, learn and implement
3 Strong
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
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
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
Company
brand
Growing organization
TCS
1 The group brand equity
2 Strong corporate governance and citizenship
3 Commitment to learning and development
Alternate
work
schedules Vacations
Wellness
1 Work environment: It includes efficient managers, supportive
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
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
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
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
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.
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.
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.
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
only.
due
to
area,
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.
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:
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
Travel insurance
Disability programs
Providing perks: It includes coupons, discounts, rebates,
etc Discounts in cinema halls, museums, restaurants, etc.
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,
Assistance
Programs
Counseling
Gymnasiums
Athletic membership program
Providing training and development and personal growth
opportunities Sabbatical programs
Professional skills development
Individualized career guidance
Part-time schedules
Extended leaves of absence
Develop Support Services
On-site day care facility etc.
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:
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.
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.
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
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.
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:
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.
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
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
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).
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
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
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
It is found out that, 89% of respondents feel that the superiors are
easily
that training and orientation programs are neither good nor bad.
6 From weighted Average analysis it is found that most of the
11
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.
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
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